Off Topic Thread 5.0

MaybeMaybe

https://www.boards.ie/discussion/comment/119757973#Comment_119757973

It is the only direct route choice, unfortunately.

Is there any semblance of logic in the approach by the Central Bank in changing the mortgage lending rules?

At a time when the ECB is actively tightening monetary policy, the Irish Central Bank are loosening it, and stuffing more debt into Joe Public.

hold my beer

It's aimed at 1st time buyers (plus a few edge cases of others), to make buying property more of a possibility. As long as it's not extended to everyone it's a good idea.

https://www.boards.ie/discussion/comment/119764670#Comment_119764670

How though? There's no scenario where it doesn't have an inflationary impact on house prices?

The FTBs who are trying to purchase a house are competing from those houses against (i) other FTBs who have just had their borrowing threshold increased by 0.5x of their income, (ii) Non First Time Buyers - who no longer need a 20% cash deposit (cut down to 10%), increasing the likelihood of that cohort attempting to buy.

If you're getting outbid at 3.5x your income, that isn't going to change, because house prices are going to increase.

The only factor that will dampen them considerably in the medium term is an increase in supply.

stephen_n

https://www.boards.ie/discussion/comment/119764722#Comment_119764722

It would appear for the most part they are competing with Funds, not FTB’s or even second time buyers. Inflation in the housing market is predominantly being driven by lack of supply and investment funds buying up what is available. It would seem to me that this decision will have little material affect on house prices or the ability of FTB’s to buy them.

I was in Kuala Lumpor yesterday. I would say they probably produce more housing units in a month, than Ireland does in a year. Economies of scale and not something we can replicate but it sure as hell makes a difference to the housing market.

hold my beer

Anything that makes it easier for 1st time buyers to buy should be welcomed imo. The changes also bring our limits more in line with other EU countries from reports today. It's a long way from the madness that was going on in the noughties.

https://www.boards.ie/discussion/comment/119765541#Comment_119765541

Yeah, but my point was, which you just seem to have ignored, is that it doesn't make it easier for first time buyers to buy.

For those who could manage to buy before, they'll likely end up paying more for the property.

If you couldn't afford it before the changes, this won't change anything because it isn't captive to first time buyers. The people who were outbidding you before will still be able to outbid you this time because they've also seen their borrowing capacity likely increase.

The only thing that will make it easier for FTB is an increase in supply.

awec

https://www.boards.ie/discussion/comment/119765379#Comment_119765379

Funds aren't much of a factor in buying houses, they're mostly in the apartment sector. There would not be a huge overlap between funds and FTBs as the majority of FTBs aren't buying apartments.

hold my beer

https://www.boards.ie/discussion/comment/119765570#Comment_119765570

Likely? I'd say it's just as likely that prices will now start to come down.

stephen_n

https://www.boards.ie/discussion/comment/119765784#Comment_119765784

Surely that is exactly where FTB’s are more likely to be buying? What’s the average price for a 3 bed in Dublin now. About €433k. That is not the price range for a lot of FTB’s.

sydthebeat

https://www.boards.ie/discussion/comment/119765784#Comment_119765784

There is a signifcant problem in the housing market of large developments being bought up by social housing bodies straight from the developer. im involved in a few different projects where i am redesigning developments which have been granted planning permission, but the units are too large for social housing bodies to pay for, so redesignand new planning is required.

whilst not specifically a "fund" problem, it is resulting in less housing being available to the open market. but conversely, shouldn't result in rising house price due to the mortgage ratio change announced today.

awec

https://www.boards.ie/discussion/comment/119765880#Comment_119765880

Yea, the State is a big player in the housing market. A bigger player than the funds for sure.

https://www.boards.ie/discussion/comment/119765843#Comment_119765843

Can you explain your thinking behind that?

I'm not having a go, just genuinely curious.

hold my beer

The economy is slowing down and all the talk is of a coming recession. I think people's willingness to take on huge debt might be diminishing, which will slow down prices. Just my own opinion.

https://www.boards.ie/discussion/comment/119766173#Comment_119766173

People who need to buy houses, like first time buyers, still need to buy houses. Most don't have the luxury of just waiting it out.

There isn't much evidence to support that people will self-regulate their own behaviour in this regard. When it comes to essentials, people will get as much credit as they can and worry about it down the road.

I completely agree that absent this intervention, house prices were showing evidence of at least slowing growth and potentially some declines, but I think this will add more juice.

The deposit shift for existing home buyers to 10% from 20% is really material as well. I know plenty of people who previously viewed this as a major stumbling block.

ersatz

https://www.boards.ie/discussion/comment/119766173#Comment_119766173

A cynic might say the intervention of the central bank here is to prevent prices from falling by inviting ftbs and others to simply take on more debt, rather than allow higher interest rates to depress prices (which in a 'normal' market is what would/should happen). Rates for ftbs could rise by 2 or 3% over the next 18 months, pushing to between 5 and 6.5%. People will stretch etc, but that should definitely have a depressing effect on house prices. I suspect that policy is squarely intended to prevent that happening.

Dave_The_Sheep

I miss Jaco's eloquent rants and fully blame the mods that we don't get them during this time of strength and stability across the water.

Podge_irl

https://www.boards.ie/discussion/comment/119766547#Comment_119766547

Rising interest rates lead to price falls in the housing market as, to put it simply, people can't afford as much of a mortgage. There are competing influences obviously, but there is an expectation for house prices to fall across Ireland and the UK (and Europe more generally).

Nothing will "solve" the housing problem other than massive building however, but that is just never going to happen for a multitude of reasons.

https://www.boards.ie/discussion/comment/119803681#Comment_119803681

Yeah, obviously I understand the first piece. My point to this was that despite the lack of supply, the interest rate rises were starting to have that effect and lead to slowing growth or in some cases a decline in house prices. That momentum was stalled by this intervention by the CBI, which will likely have the effect of propping up house prices here in the short to medium term.

This point was acknowledged expressly by the CBI Governor Gabriel Maklouf in his press conference announcing the measures:

'There will be a modest effect on house prices,' he says, but says there are multitude of factors that go into house prices.

My new favourite thing to do on boards when I don't want to continue an inane discussion, is to thank their stupid incendiary reply and forget about it all

swiwi_

https://www.boards.ie/discussion/comment/119804138#Comment_119804138

If I give you a thanks how will you interpret it…?

I was really hoping everyone would thank it and say nothing

Podge_irl

https://www.boards.ie/discussion/comment/119803713#Comment_119803713

I don't think it will wash out the interest rate influence, its just going to be too large.

It's all tinkering around the edges until society as a whole cops on and stops blocking any kind of reasonable building though.

Dubinusa

Stripe and twitter laying off staff. I hope Ireland is not affected. What an awful year for the average person. It's likely going to be worse.

Interested Observer

https://www.boards.ie/discussion/comment/119832507#Comment_119832507

Irish Times saying Twitter staff in Dublin are affected. I'm no employment lawyer but the way they're going about it seems like it's going to get them sued.

swiwi_

I’ve never been a Twitter user and only see the odd witty tweet but it strikes that Twitter risks obscurity. If it just becomes a cesspool of vitriol, people will leave and advertisers will shun. It’s really an American thing to hire and fire at will. There, it’s seen as radiating power as far as I can tell.

Dubinusa

I don't have Twitter either. No social media except whatsapp. With the world's economy crapping the bed.... what's next?

pickarooney

War, generally. There's loads of money in that.

Interested Observer

https://www.boards.ie/discussion/comment/119832507#Comment_119832507

Meta appear to be joining the party.

This is all fairly miserable.

Interested Observer

Meta laying off 11k people worldwide. This had been floated but that is a truly massive cut in headcount.