Property Market 2018

Cuddlesworth

Augeo wrote: »

I see this mentioned frequently enough.
In 2004 someone on €50k/annum took home about €2900/month after throwing a few quid into the pension etc etc.

If they borrowed €400k their mortgage would have been about €1600/month at the then quite low interest rates.

I really don't think many folk borrowed 8 times their salaries tbh, I know that BOI weren't throwing much more than the 4.2 times my then salary at me, and AIB weren't willing to give me a mortgage at all

Not sure if you know many people during the naughties, but income multiples were only part of the problem. I know people who worked trade jobs at the time who currently owe 2+ million because they were allowed borrow against the value of their property's over and over again. The only thing that has saved them as been the rapidly increasing rents, if the market falls again they would have zero hope of recovering the funding.

Graham

Once upon a time, in a new thread far far away, a bunch of boardsies started discussing the property market 2018.

Posters skipped around rainbows chasing unicorns, occassionally pausing to add their carefully considered prognostications for the future of accommodatory commerce without a care in the world.

Trolls were slayed and everyone lived happily ever after.

The End.

I know, it's a fairy story. The real story is we've strayed a little off topic.

So............

Mod Note
Friendly reminder, the topic is "Property Market 2018".

Bluefoam

Cuddlesworth wrote: »

I know people who worked trade jobs at the time who currently owe 2+ million because they chose to borrow beyond their means

I fixed that for you

matsy1

The population percentage of Dublin in Ireland is similar to population of London in England? Why is it so shocking to compare? Obviously on a much smaller scale? I think every major capital city can be compared somewhat.

engiweirdo

matsy1 wrote: »

The population percentage of Dublin in Ireland is similar to population of London in England? Why is it so shocking to compare? Obviously on a much smaller scale? I think every major capital city can be compared somewhat.

Because for some warped reason a certain cohort of Dubs believe comparisons with a severely broken model like London is somehow a positive thing. "Sure we're just like London we are", sure ya are pet, sure ya are.

matsy1

engiweirdo wrote: »

Because for some warped reason a certain cohort of Dubs believe comparisons with a severely broken model like London is somehow a positive thing. "Sure we're just like London we are", sure ya are pet, sure ya are.

Broken or not, is there not reasonable to look to other capitals to learn from good or bad?

I'm a Dub but more importantly I'm Irish. I don't think many Dubs have the superior mindset that is portrayed by so many people here.
This is not GAA.

RayCun

engiweirdo wrote: »

Because for some warped reason a certain cohort of Dubs believe comparisons with a severely broken model like London is somehow a positive thing. "Sure we're just like London we are", sure ya are pet, sure ya are.

I don't see anyone crowing about Dublin being great because it's like London. That's just in your head.

People are pointing out that industry concentrates in large cities. It's not necessarily a good thing, but it's a thing that happens everywhere.

Baby01032012

Graham wrote: »

Once upon a time, in a new thread far far away, a bunch of boardsies started discussing the property market 2018.

Posters skipped around rainbows chasing unicorns, occassionally pausing to add their carefully considered prognostications for the future of accommodatory commerce without a care in the world.

Trolls were slayed and everyone lived happily ever after.

The End.

I know, it's a fairy story. The real story is we've strayed a little off topic.

So............

Mod Note
Friendly reminder, the topic is "Property Market 2018".

I actually thought I was in Bargain alerts or the Christmas thread

Cuddlesworth

Cuddlesworth wrote: »

Not sure if you know many people during the naughties, but income multiples were only part of the problem. I know people who worked trade jobs at the time who currently owe 2+ million because they were allowed borrow against the value of their property's over and over again. The only thing that has saved them as been the rapidly increasing rents, if the market falls again they would have zero hope of recovering the funding.

I'm not sure if you read the post I was quoting ..... nothing to do with the speel you launched into.
It was about people borrowing 8 times their income & no mention of the borrowing being against "assets"

I knew bucket loads of people during the naughties..... it seems you moved in circles full of folk who had little regard for the concept of risk.

Cuddlesworth

Augeo wrote: »

I'm not sure if you read the post I was quoting ..... nothing to do with the speel you launched into.
It was about people borrowing 8 times their income & no mention of the borrowing being against "assets"

I knew bucket loads of people during the naughties..... it seems you moved in circles full of folk who had little regard for the concept of risk.

People did borrow 8 times their income though. But it was usually on multiple property's.

EG, person earns 60 k a year.

Has a house with mortgage of 400k, equity of 200k. Puts it against a house purchase of 600k. Then puts both houses against another house at 700k. And another at 800k. All of this was granted on the belief that the houses purchased could only appreciate in value.

All of a sudden, they have a income of 60k, assets of circa 200k and a debt of 2.3 million.

Right now, in this property market and for the foreseeable future, that could not possible happen. That type of reckless spending is dead because the central bank forced the mortgage companies to take into account repayment capacity again.

OwlsZat

Cuddlesworth wrote: »

Right now, in this property market and for the foreseeable future, that could not possible happen. That type of reckless spending is dead because the central bank forced the mortgage companies to take into account repayment capacity again.

This time it's different?

Is it so different that a collapse isn't possible or is the mechanism of the last collapse the only one now not possible?

Cuddlesworth

Cuddlesworth wrote: »

People did borrow 8 times their income though. But it was usually on multiple property's.

EG, person earns 60 k a year.

Has a house with mortgage of 400k, equity of 200k............

Again, not part of the post I was quoting.
their income alone was not sufficient to get the loan, the €200k "equity" was key.

https://www.boards.ie/vbulletin/showpost.php?p=108744920&postcount=2850

No mention of any equity, just 8 times your salary.
As I detailed, I don't think it happened to any extent.

Sarn

Speaking from my own personal experience back in 2003 or 2005, I was offered in excess of 8 times my salary. This was based on me “renting” out a second bedroom as proposed by the mortgage broker. Thankfully I didn’t go ahead with it. Several of my colleagues got the same offer.

kippy

Sarn wrote: »

Speaking from my own personal experience back in 2003 or 2005, I was offered in excess of 8 times my salary. This was based on me “renting” out a second bedroom as proposed by the mortgage broker. Thankfully I didn’t go ahead with it. Several of my colleagues got the same offer.

Did anyone go for it, how did it work out?

Moonjet

kippy wrote: »

Did anyone go for it, how did it work out?

Can't speak for the other poster but I worked with people who borrowed 5 - 6 times their salary during Celtic tiger years. They all kept their jobs so just kept paying down the mortgage during recession and are long since out of negative equity. It's been over 10 years since the recession started so people who bought from 2003-2008 (and kept their property) have 10-15 years of mortgage payments made which (even with 4 - 5% interest rates) is still a huge dent off the capital. And there isn't much difference between what they paid and current prices anyway, and they had the added bonus of security of tenure all that time/ not having to deal with the insane rental market.

Sarn

kippy wrote: »

Did anyone go for it, how did it work out?

None that I know of. In the end, several of them bought one bed apartments under the affordable housing scheme. All kept their jobs so it worked out ok for the most part. Getting married and having kids made it a little tricky with the apartments.

the butcher

Thought I would do a round up of the overall Irish Property Market picture in 2018.

We have a scenario where the government distorts the rental market by giving social welfare payments to landlords (4 billion in total payments since 2011), where the government buy private property at current bubble market rates to the detriment of people trying to buy property themselves, where the government allows vulture funds to come in at charity level status and pay little to no tax on their investments.



We've councils paying rents up to 2,800 a month for "affordable" housing.

Councils taking just a third of available offerings from NAMA of almost 7,000 residential properties for social housing purposes.

Our housing crisis has ballooned our homelessness figures ->


What Fine Gael said about homelessness in their 2011 manifesto ->

Fine Gael is committed to ending long term homelessness and the need to sleep rough.
We firmly believe that prevention is better than cure and in Government we will aggressively target the
root causes of homelessness, as in the long term it will be a more effective way to prevent homelessness.
A key part of Fine Gael’s public service reform strategy is to invest now to reduce future demand for
services. [.quote]



Fine Gael told us that the previous property bubble prices in the 2007 era were unsustainable. What are they now so close to the peak?


Fine Gael Manifesto 2011 ->

We will legislate, if necessary, to stop mortgage lenders charging penalty interest rates (or forcing families to give up their low-cost tracker mortgage rates)

We also have the tracker mortgage scandal this year, at least 5000 more could be affected beyond the 33,700 customers so far identified by the Central bank.

Growth in Irish property prices now 4th fastest globally. Government levies now make up 20% of the cost of buying a new house.

Dublin is now more expensive to live in than both Abu Dhabi and Silicon Valley.



We have huge conflicts of interests when it comes to housing in Ireland. It's influenced at every level of government.



We also have local politics at play.


We have a housing minister that believes 320,000 is an affordable home. That is over 92,000 of an joint income required (not including interest rates + stress test) for the mortgage lending rules.

Moonjet

We have a housing minister that believes 320,000 is an affordable home. That is over 92,000 of an joint income required (not including interest rates + stress test) for the mortgage lending rules.

They would need €32,000 deposit (10%) so only need to borrow €288,000 / 3.5 lti = €82,285 / 2 people = €41,142 each which is achievable in a lot of professions these days. It's actually below the average public sector salary and just over the average industrial wage (€38,000~).

Assetbacked

Moonjet wrote: »

They would need €32,000 deposit (10%) so only need to borrow €288,000 / 3.5 lti = €82,285 / 2 people = €41,142 each which is achievable in a lot of professions these days. It's actually below the average public sector salary and just over the average industrial wage (€38,000~).

Just to add that 288k at 4% payable over 25 years is less than 1k per month. Not bad.

aloooof

Assetbacked wrote: »

Just to add that 288k at 4% payable over 25 years is less than 1k per month. Not bad.

Are you sure this is accurate? I haven't looked at the numbers but on first glace, it looks off to me.

Q&A

Assetbacked wrote: »

Just to add that 288k at 4% payable over 25 years is less than 1k per month. Not bad.

You're understating the cost. Monthly repayments would be €1,520 of which interest would be €960 in the first month.

the butcher

Moonjet wrote: »

They would need €32,000 deposit (10%) so only need to borrow €288,000 / 3.5 lti = €82,285 / 2 people = €41,142 each which is achievable in a lot of professions these days. It's actually below the average public sector salary and just over the average industrial wage (€38,000~).

Average industrial wage is useless. A more useful figure than the average would be median earnings – the amount earned by those right in the middle of all earners. The average is skewed upwards because a smaller number earn a great deal more than that earned by the majority of people. The median figures I could find online is 28,500.

aristotle25

Assetbacked wrote: »

Just to add that 288k at 4% payable over 25 years is less than 1k per month. Not bad.

Its €1520 per month, starts off with €900-€960 in interest per month for the first 3 years or so.

Maybe they meant €188k? Thats €992 per month total repayment.

omicron

the butcher wrote: »

Average industrial wage is useless. A more useful figure than the average would be median earnings – the amount earned by those right in the middle of all earners. The average is skewed upwards because a smaller number earn a great deal more than that earned by the majority of people. The median figures I could find online is 28,500.

And the median is skewed because larger numbers of people work part time jobs. The mean is more representative of people likely to be purchasing a home than the median.

Zenify

Just a link to what's going on in London. Stats are showing a steep decline in a lot of places.

https://youtu.be/niH_O4pJQfg

UsBus

Assetbacked wrote: »

Just to add that 288k at 4% payable over 25 years is less than 1k per month. Not bad.

No wonder people can't pay mortgages if this is how they estimate things. 288k over 25 years is from 1500 upwards depending on your rate etc..

EnlightenedApe

"One third of cabinet ministers are landlords" sums it up.

As well as the other two third who no doubt own 500k plus houses in nice areas they are all too happy to see go up and up and push the rif raf out.

Ray Palmer

kippy wrote: »

Did anyone go for it, how did it work out?

Everyone I personally know did fine. Pay cuts were involved but it meant cutting down on luxuries but generally no massive effect. One less holiday and the like. I always think it is strange how it is everybody enjoying the high life then it is nobody is. Doesn't really happen like that people with money spend less but they still have money and it scales down. It is the people who take credit based on the future staying the same that really get hurt.

Soci-economic behaviour causes the cycle more than anything else but certainly companies profit and offer things to allow it. The demand is what needs to change.

Redneck Culchie

Renters are very poorly represented politically. I would be interested to see a study on who renters vote for. PBP/SF/Labour have done nothing to help renters, even though Government neglect is the main issue.

Fol20

Redneck Culchie wrote: »

Renters are very poorly represented politically. I would be interested to see a study on who renters vote for. PBP/SF/Labour have done nothing to help renters, even though Government neglect is the main issue.

Do you think ll fair much better politically. All of the recent legislation has been pro tenant