Affordability of Property and Irish Wages/Salaries

LirW

Samuel T. Cogley wrote: »

A house in Kilbarrack now commands the guts of 325K. Meh workers as you folk are putting it would no doubt be delighted with a meh area.

I'd love a house in Kilbarrack but that's way way out of our price range unfortunately.

For many it's not about giving out because they can't get their area of choice, some couples or families have to decide on the least sh1tty compromise which is either stay renting, buy and have a long commute or buy in a seriously unsafe area closer to town, like Southwest Finglas.

There's a reason why there's still an awful lot of demand in the sub-350k market.

Also I see threads here quite regularly where people on average salaries are clueless on what to do because they couldn't buy anywhere near the M50.

Bob24

Cyrus wrote: »

well where do you mean then because i have listed houses in good parts of dublin that people can buy, what point are you trying to make?

The options you listed are fine (I actually viewed Stilorgan Gate back when it was released and its rather decent, although FYI what you are referencing is a duplex apartment and if my memory serves well the starting price for a house there was around 800k).

But I’d be concerned if we acknowledge they are reserved to what are probably the top 5% of households at the age of having young children. Again, no one has any entitlement but from a long term social balance point of view I’d be a lot more comfortable if something like a Stillorgan Gate 3 beds apartment was more for the top 20 or 25%; and the top 5% were rather looking at a place like Ranelagh (or Stillorgan Gate houses rather that apartments). I might sound obsessed but my recurring line of thoughts is that while I don’t feel sorry for that 30yo 150k income household buying an apartment in Stilorgan Gate, the fact that it is as good as it gets for them has a knock on effect on households in all of the lower income brackets, and eventually this is what is causing the housing crisis and in other countries has been part of the lower/middle class revolt as I was mentioning earlier. And while the current situation is still okish (though not great), if the dominant argument is that it is all grand and there is no problem with those prices it means we are going to accept even higher prices. And each increase pushes higher earners towards what used to be middle class areas and in turns kicks lower earners out of the city (mirroring the electoral maps for things like Brexit whereby those who have been kicked out start revolting from the very remote and poorly connected suburbs).

Cyrus

Bob24 wrote: »

The options you listed are fine (I actually viewed Stilorgan Gate back when it was released and its rather decent, although FYI what you are referencing is a duplex apartment and if my memory serves well the starting price for a house there was around 800k).

But I’d be concerned if we acknowledge they are reserved to what are probably the top 5% of households at the age of having young children. Again, no one has any entitlement but from a long term social balance point of view I’d be a lot more comfortable if something like a Stillorgan Gate 3 beds apartment was more for the top 20 or 25%; and the top 5% were rather looking at a place like Ranelagh (or Stillorgan Gate houses). I might sound obsessed but my recurring line of thoughts is that while I don’t feel sorry for that 30yo 150k income household buying an apartment in Stilorgan Gate, the fact that it is as good as it gets for them has a knock on effect on households in all of the lower income brackets, and eventually this is what is causing the housing crisis and in other countries has been part of the lower/middle class revolt as I was mentioning earlier. And while the current situation is still okish (though not great), if the dominant argument is that it is all grand and there is no problem with those prices it means we are going to accept even higher prices And each increase pushes higher earners towards what used to be middle class areas and in turns kicks lower earners out of the city (mirroring the electoral maps for things like Brexit whereby those who have been kicked out start revolting from the very remote and poorly connected suburbs).

whats your solution?

Bob24

Cyrus wrote: »

whats your solution?

I’m not saying I have a magical solution and it is obviously a very complex issue. But a good start to find solutions would be to start acknowledging there is a problem.

Cyrus

Bob24 wrote: »

I’m not saying I have a magical solution. But a good start to find solutions would be to start acknowledging there is a problem.

do you have any solution, the situation at the moment is driven by market forces, so i presume you must be advocating some sort of intervention by the state (beyond the CB rules)

Samuel T. Cogley

Shedite27 wrote: »

Can't find the link but about a year ago I read that 7% of households earn more than €100k

Could have been that.

Samuel T. Cogley

beaz2018 wrote: »

what does "meh" stand for?

It means run of the mill; average; it'll do but not perfect.

thebsharp

One of the main solutions is to improve transport connectivity across the Greater Dublin Area, making housing across a much greater catchment desirable and making more areas attractive to businesses i.e. both employees and customers can get from place to place more easily.

There's no votes, and has never been, in providing long term solutions to address this. Politicians all weigh in against such plans and as a society we have to acknowledge our role here. I think we spend close to the least amount on transport infrastructure in the OECD per capita.

To be fair I'm a transport engineer so my perspective is definitely biased.

Cuddlesworth

ELM327 wrote: »

That's households though.
Not individual earners.


My household is hovering near that mark. And we're not well off, or even near it!
100k for 2 incomes is not lots.

I took part in a CSO survey about 6 or 7 years ago. Our household income was around 210k because 6 young working adults were house sharing. Its not a metric I really trust.

Samuel T. Cogley

ELM327 wrote: »

That's households though.
Not individual earners.


My household is hovering near that mark. And we're not well off, or even near it!
100k for 2 incomes is not lots.

I think the point I and various others are trying to make (and perhaps you too) is that 60 and 70K+ jobs are not as common as some people think they are.

Cyrus

thebsharp wrote: »

One of the main solutions is to improve transport connectivity across the Greater Dublin Area, making housing across a much greater catchment desirable and making more areas attractive to businesses i.e. both employees and customers can get from place to place more easily.

There's no votes, and has never been, in providing long term solutions to address this. Politicians all weigh in against such plans and as a society we have to acknowledge our role here. I think we spend close to the least amount on transport infrastructure in the OECD per capita.

To be fair I'm a transport engineer so my perspective is definitely biased.

thats a very good point to be fair, i see loads of houses being built in donabate but with no improvement in transport links.

Bob24

Cyrus wrote: »

do you have any solution, the situation at the moment is driven by market forces, so i presume you must be advocating some sort of intervention by the state (beyond the CB rules)

If we’re talking about solutions the good thing is that we’re moving towards acceptance that there is a problem.

Having said that, IMO the reason there is no easy solution is that it is a much wider issue than just tensions in the property market which are a side effect of much wider economical/social changes in western societies.

Of course a short term patch in Dublin would be to accept much denser type of housing which would relieve pressure for a while. And while it has both benefits and drawbacks I’d be overall in favour of it. Another would be to penalise under utilisation of land and housing units in the city, again both drawbacks and benefits but overal I’m in favour.

But the reality is that while fixing all those structural issues specific to Ireland would help, the elephant in the room which is present is most wester countries is that we are walking into an economic model which leaves less and less room for the lower/middle class in economic centres of developed western countries. And that gradual exclusion from property market in capital cities is one of the consequences of this. It’s a very hard question and again no magical answer - we need to ha e hard talks about our social/economic models and say how we make it work without breaking-up our societies.

LirW

Cyrus wrote: »

do you have any solution, the situation at the moment is driven by market forces, so i presume you must be advocating some sort of intervention by the state (beyond the CB rules)

I believe a huge factor would be to deliver large scale developments with medium density, so well laid out apartments with good storage and parking and each building having 5-7 floors. It's an utter waste of space to plaster every piece of land full of even more Semi-Ds with their own garden and at the current rate of population growth this concept is not sustainable.
I'm aware that builders have their problems getting such a concept funded and stick with what's being built.
If you deliver a big number of units the market will eventually balance out because the current problem is a supply problem since living further away means commuting longer in sub-par public transport.
Really, it's 2018 and people have to get over the Ballymun stigma that apartments seem to have here. There are still tons of houses with gardens around for people that are willing to pay for them.

But in this point Ireland is far inferior, the city planning is an utter nightmare and the mindset that is around for generations is a big contributor to why there is a lack in supply. Space isn't used efficiently and of course people fight for the few properties available, if you're priced out, though sh1t, move to the Midlands.

Not saying it would be magically fix everything but it would be a good start to think long-term. The population and therefore the demand for homes aren't going to get smaller.

Cyrus

Bob24 wrote: »

If we’re talking about solutions the good thing is that we’re moving towards acceptance that there is a problem.

Having said that, IMO the reason there is no easy solution is that it is a much wider issue than just tensions in the property market which are a side effect of much wider economical/social changes in western societies.

Of course a short term patch in Dublin would be to accept much denser type of housing which would relieve pressure for a while. And while it has both benefits and drawbacks I’d be overall in favour of it. Another would be to penalise under utilisation of land and housing units in the city, again both drawbacks and benefits but overal I’m in favour.

But the reality is that while fixing all those structural issues specific to Ireland would help, the elephant in the room which is present is most wester countries is that we are walking into an economic model which leaves less and less room for the lower/middle class in economic centres of developed western countries. And that gradual exclusion from property market in capital cities is one of the consequences of this. It’s a very hard question and again no magical answer - we need to ha e hard talks about our social/economic models and say how we make it work without breaking-up our societies.

Michael Moore basically said the same thing in that documentary capitalism a love story.

Cuddlesworth

Bob24 wrote: »

the top 5%

This is being quoted a lot. I don't agree with Cyrus on his interpretation of what even bright young people earn and are capable of affording, but its important to differentiate between the country and the Dublin market in terms of prices and wages. So is it top 5% of the country or top 5% of Dublin.

Cyrus

LirW wrote: »

I believe a huge factor would be to deliver large scale developments with medium density, so well laid out apartments with good storage and parking and each building having 5-7 floors. It's an utter waste of space to plaster every piece of land full of even more Semi-Ds with their own garden and at the current rate of population growth this concept is not sustainable.
I'm aware that builders have their problems getting such a concept funded and stick with what's being built.
If you deliver a big number of units the market will eventually balance out because the current problem is a supply problem since living further away means commuting longer in sub-par public transport.
Really, it's 2018 and people have to get over the Ballymun stigma that apartments seem to have here. There are still tons of houses with gardens around for people that are willing to pay for them.

But in this point Ireland is far inferior, the city planning is an utter nightmare and the mindset that is around for generations is a big contributor to why there is a lack in supply. Space isn't used efficiently and of course people fight for the few properties available, if you're priced out, though sh1t, move to the Midlands.

Not saying it would be magically fix everything but it would be a good start to think long-term. The population and therefore the demand for homes aren't going to get smaller.

i agree but that would require people accepting that apartment living is ok and may be the only option for a certain cohort.

there is a prevailing notion that there are semi ds for all in the suburbs.

keane2097

Interested Observer wrote: »

Some might have been awarded stock that ended up at that value, sure.

I know someone who works for one of those companies, they we given stock worth about a years salary that vests over a number of years. But the share price is set at the start of employment so if the share price goes up a lot over the course of employment you can end up with a lot of money.

I have no idea if that's generous or not as things go, there might be another company that gives you two years salary worth, I have no idea.

I know what an RSU is. The implication earlier seemed to be that plenty of people were clearing €150k a year in RSUs. I'm trying to figure out how much someone would have to be getting in RSUs each year to make that possible.

Someone who gets 50k a year RSUs would be getting 12.5k the first year they vest, 2*12.5k + growth the second, 3*12.5k + growth the third and 4*12.5k + growth the fourth.

Let's say they go up by 50% every year.

We know have:
12.5k year 1
(18.75k) + 12.5k year 2
(~28k) + (18.75k) + 12.5k year 3
(~42k) + 28k + 18.75k + 12.5k year 4

I don't think any of the companies mentioned have had 50% YOY growth for four years but say they had, our hero is now pulling in ~100k a year from his RSUs, miles off 150k. Is my maths totally bananas here or...? I'm simplifying with consistent growth but its overblown growth anyway.

I work for an American tech multinational myself and find it very far fetched that there are many people working in Dublin for Facebook, Google or Microsoft getting the level of RSUs needed to be clearing 150k.

Cyrus

Cuddlesworth wrote: »

This is being quoted a lot. I don't agree with Cyrus on his interpretation of what even bright young people earn and are capable of affording, but its important to differentiate between the country and the Dublin market in terms of prices and wages. So is it top 5% of the country or top 5% of Dublin.

i'm not sure what you don't agree with though? i understand my experiences aren't everyones but i trained in big 4 accounting firm and thus know what all of my peers earned at the time (and i know what a lot of them earn now), i worked in a tech firm in the FP&A side so again know what comp plans are like for various levels of sales roles in those co's and i hire a lot of newly qualified accountants and more experienced accountants so i know what they cost.

I'm not guessing at these things.

i think people underestimate how many people earn what are considered large salaries, and the proof is in the pudding because thats a large element of what drives the house prices.

ELM327

keane2097 wrote: »

I know what an RSU is. The implication earlier seemed to be that plenty of people were clearing €150k a year in RSUs. I'm trying to figure out how much someone would have to be getting in RSUs each year to make that possible.

Someone who gets 50k a year RSUs would be getting 12.5k the first year they vest, 2*12.5k + growth the second, 3*12.5k + growth the third and 4*12.5k + growth the fourth.

Let's say they go up by 50% every year.

We know have:
12.5k year 1
(18.75k) + 12.5k year 2
(~28k) + (18.75k) + 12.5k year 3
(~42k) + 28k + 18.75k + 12.5k year 4

I don't think any of the companies mentioned have had 50% YOY growth for four years but say they had, our hero is now pulling in ~100k a year from his RSUs, miles off 150k. Is my maths totally bananas here or...? I'm simplifying with consistent growth but its overblown growth anyway.

I work for an American tech multinational myself and find it very far fetched that there are many people working in Dublin for Facebook, Google or Microsoft getting the level of RSUs needed to be clearing 150k.

You are also taxed at source for RSUs. Like BIK.
So you have 100k but you pay 52% in taxes, USC, PRSI

ELM327

Samuel T. Cogley wrote: »

I think the point I and various others are trying to make (and perhaps you too) is that 60 and 70K+ jobs are not as common as some people think they are.

Yes, and on the converse I and a lot of my social circle would be at or close to that level of income.
I think the average income of a household of 2 professionals is unlikely to be less than 75-80k, so it makes sense that 100k isnt a stretch for two people of which at least one is a middle manager or higher.

Say I was on 65k (not my actual salary but not too far off it, not saying which direction) and my partner was on 40k (again not her actual salary but not too far off it, not saying which direction) that's 105k combined.

Bob24

Cuddlesworth wrote: »

This is being quoted a lot. I don't agree with Cyrus on his interpretation of what even bright young people earn and are capable of affording, but its important to differentiate between the country and the Dublin market in terms of prices and wages. So is it top 5% of the country or top 5% of Dublin.

In my mind this for Dublin (keeping in mind we are talking top 5% (or maybe 10) of 30yo couples - not top 5% of all households).

Having said that if anyone has hard figures on income distribution for Dublin couples in that age range I’d be interested as it’s just my guesstimate.

Cyrus

keane2097 wrote: »

I know what an RSU is. The implication earlier seemed to be that plenty of people were clearing €150k a year in RSUs. I'm trying to figure out how much someone would have to be getting in RSUs each year to make that possible.

Someone who gets 50k a year RSUs would be getting 12.5k the first year they vest, 2*12.5k + growth the second, 3*12.5k + growth the third and 4*12.5k + growth the fourth.

Let's say they go up by 50% every year.

We know have:
12.5k year 1
(18.75k) + 12.5k year 2
(~28k) + (18.75k) + 12.5k year 3
(~42k) + 28k + 18.75k + 12.5k year 4

I don't think any of the companies mentioned have had 50% YOY growth for four years but say they had, our hero is now pulling in ~100k a year from his RSUs, miles off 150k. Is my maths totally bananas here or...? I'm simplifying with consistent growth but its overblown growth anyway.

I work for an American tech multinational myself and find it very far fetched that there are many people working in Dublin for Facebook, Google or Microsoft getting the level of RSUs needed to be clearing 150k.

RSUs are granted as number of units rather than a $ value (obviously the $ value comes into it when they decide how man to grant you.

But if you join FB or Linkedin early and get a few 1000 RSUs and 4 years later the share price is over $100, your RSUs are now worth hundreds of thousands. Generally the people who joined early got promoted very quickly also (often beyond their ability but thats a digression) and got additional RSUs along the way.

LirW

Cyrus wrote: »

i agree but that would require people accepting that apartment living is ok and may be the only option for a certain cohort.

there is a prevailing notion that there are semi ds for all in the suburbs.

I believe that once people see how apartment living can be done with space, storage and communal areas with a high finishing standard it would certainly be easier.
Also a good chunk of city population is not Irish and it's perfectly normal for them to live in apartments and raise family there. If apartments are done well and they're affordable, there are definitely people who'd jump at it as a long-term solution.

Problem is it hasn't been done well enough until now.

keane2097

ELM327 wrote: »

You are also taxed at source for RSUs. Like BIK.
So you have 100k but you pay 52% in taxes, USC, PRSI

I was presuming we must be talking gross.

Cyrus wrote: »

RSUs are granted as number of units rather than a $ value (obviously the $ value comes into it when they decide how man to grant you.

But if you join FB or Linkedin early and get a few 1000 RSUs and 4 years later the share price is over $100, your RSUs are now worth hundreds of thousands. Generally the people who joined early got promoted very quickly also (often beyond their ability but thats a digression) and got additional RSUs along the way.

You get units but if you get say 100 shares in year 1 amounting to 50k you will get 50k worth + your yearly increase in year two. You're not going to get 100 shares in year 1 when they are 500 a share and 100 again in year two when they are 750 a share.

We are still talking about a tiny number of people valuable enough to have been given a ton of shares several years ago who were lucky enough that the shares have seen huge growth in that exact time frame.

Someone who got 50k worth of RSUs in Alphabet this time last year is going to get about 13.5k before tax if his shares vest today. Someone in Facebook is only going to get 11k.

How many in those offices get 50k+ worth of RSUs a year? How many of that small crew get so much more again that they confidently clear 150k every year in stock options?

Graduates and the vast, overwhelming majority of 20-somethings are not being given 1000s of RSUs in any of these companies.

ELM327

keane2097 wrote: »

I was presuming we must be talking gross.



You get units but if you get say 100 shares in year 1 amounting to 50k you will get 50k worth + your yearly increase in year two. You're not going to get 100 shares in year 1 when they are 500 a share and 100 again in year two when they are 750 a share.

We are still talking about a tiny number of people valuable enough to have been given a ton of shares several years ago who were lucky enough that the shares have seen huge growth in that exact time frame.

Someone who got 50k worth of RSUs in Alphabet this time last year is going to get about 13.5k before tax if his shares vest today. Someone in Facebook is only going to get 11k.

How many in those offices get 50k+ worth of RSUs a year? How many of that small crew get so much more again that they confidently clear 150k every year in stock options?

That's not how it works - where I am (large tech MNC but not facebook).
You get an RSU award that is 1 year, 2 years, 5 years or whatever.
For example I recently got a 15k one. It's spread across 4 years based on current values. So I know I'm getting X shares in year 1 -4 , regardless of if the share price is 50 or 500.

keane2097

ELM327 wrote: »

That's not how it works - where I am (large tech MNC but not facebook).
You get an RSU award that is 1 year, 2 years, 5 years or whatever.
For example I recently got a 15k one. It's spread across 4 years based on current values. So I know I'm getting X shares in year 1 -4 , regardless of if the share price is 50 or 500.

Oh god I know how RSUs work.

Your year 1 grant is 15k, split in four. It can grow while you are waiting for it to vest.

Your year two grant is going to be a new 15k-ish worth, maybe plus a bit more if you are getting a raise.

Your year 1 grant is still worth whatever it grows to.

If your 15k in year 1 was 100 shares, they are not going to give you another 100 shares in year 2 if the price is gone up by 50%. That would be giving you a new set of shares worth 22.5k. They are going to give you a new 15k worth of shares as your new bonus (plus a little bump probably). Your new 75 shares or whatever will go on their own 4 year vesting period.

Maybe I'm not being clear. If I get 100 RSUs this year worth ~5k, and all goes well so next year so they want to give me a new batch of RSUs. If the stock price has doubled this year my new batch will be 50 shares, because they want to reward me with around a 5k bonus. If the stock price halves they might give me 200 shares. The number of units you are given each year is the size of the bonus they want you to have divided by the share price.

The value of each tranche as it vests is separate.

ELM327

keane2097 wrote: »

Oh god I know how RSUs work.

Your year 1 grant is 15k, split in four. It can grow while you are waiting for it to vest.

Your year two grant is going to be a new 15k-ish worth, maybe plus a bit more if you are getting a raise.

Your year 1 grant is still worth whatever it grows to.

If your 15k in year 1 was 100 shares, they are not going to give you another 100 shares in year 2 if the price is gone up by 50%. That would be giving you a new set of shares worth 22.5k. They are going to give you a new 15k worth of shares as your new bonus (plus a little bump probably). Your new 75 shares or whatever will go on their own 4 year vesting period.

Maybe I'm not being clear. If I get 100 RSUs this year worth ~5k, and all goes well so next year so they want to give me a new batch of RSUs. If the stock price has doubled this year my new batch will be 50 shares, because they want to reward me with around a 5k bonus. If the stock price halves they might give me 200 shares. The number of units you are given each year is the size of the bonus they want you to have divided by the share price.

The value of each tranche as it vests is separate.

Oh god I know how RSUs work too.
How you describe is not how it works in the MNC where I work.
Have had my initial RSUs and some subsequent ones for promotions/awards etc. The awards are defined in advance based on the share price when the award is made, as opposed to when they vest. A subsequent award (if any) is separate to the initial RSU award you get for starting at one of these MNC. I've worked at/for a couple at this stage.

keane2097

ELM327 wrote: »

Oh god I know how RSUs work too.
How you describe is not how it works in the MNC where I work.
Have had my initial RSUs and some subsequent ones for promotions/awards etc. The awards are defined in advance based on the share price when the award is made, as opposed to when they vest. A subsequent award (if any) is separate to the initial RSU award you get for starting at one of these MNC. I've worked at/for a couple at this stage.

I must be typing with fat fingers or something as this is just another way to say what I was intending to say.

Samuel T. Cogley

Oh God I don't.

I don't know what a tracker mortgage is... :pac:

keane2097

The upshot anyway is lads and ladies in their 20s are in their hole clearing 150k in RSUs a year.