Irish Property Market 2020 Part 2

JimmyVik

Pelezico wrote: »

Brendan did not allow any discussion about house prices on his forum.

He must have had a shed load of property.

Im fond of an aul guess at property prices myself, but to be fair its all guessing - by everyone. If you were to look at how heated it gets on boards, where people dont seem to realize its just their opinion and nothong more, not some expert analasys, i think you could see why someone who wanted to run a serious finance focused website wouldnt want that rubbish taking up 90% of the posts on it.

JimmyVik

Bass Reeves wrote: »

It would be especially attractive to older staff who came in under the old Bank clerk recruitment from school. I think the retirement age for these was 60. Another factor is if you have worked that long with an employer the redundancy tax free allowance is very generous. If the taxable part was paid in 2021 an employee's on 70k+ could walk away with 150k+.

If I got what they are getting from my job today, I would retire for sure.

yosser hughes

Bass Reeves wrote: »

It would be especially attractive to older staff who came in under the old Bank clerk recruitment from school. I think the retirement age for these was 60. Another factor is if you have worked that long with an employer the redundancy tax free allowance is very generous. If the taxable part was paid in 2021 an employee's on 70k+ could walk away with 150k+.

There are a lot of bank staff who got burned with property investments and also bank shares, a double whammy. Many are just not in a good position at all as a result.
The ones who were in a good position have already availed of previous VR offers after 2008

Cyrus

awec wrote: »

It's a fairly important distinction to make. Contract workers are only ever supposed to be temporary (that's the whole point) and will always be the first out the door when costs need cut.

They get paid more because they carry the risk of having no contract and therefore no income. Higher risk, higher reward.

you dont need to pay contractors to make them redundant either.

Cyrus

Pelezico wrote: »

Brendan did not allow any discussion about house prices on his forum.

He must have had a shed load of property.

brendan burgess has done more for people impacted by the last recession in terms of mortgages and properties than anyone else in fairness to him.

JimmyVik

yosser hughes wrote: »

There are a lot of bank staff who got burned with property investments and also bank shares, a double whammy. Many are just not in a good position at all as a result.
The ones who were in a good position have already availed of previous VR offers after 2008

The ones who were 40 or 50 years old back then probably would have stayed. Pretty sure they will think hard at going for that offer now at the age the are today.

beauf

Pelezico wrote: »

Brendan did not allow any discussion about house prices on his forum.

He must have had a shed load of property.

It used to end up in so many arguments, they didn't have the resources to moderate it. So they said.

That said, most forums have an agenda. So not that much different. No forum is free speech. So when you see only one side of an argument getting shut down, its pretty obvious. Boards is the same.

Its bit like posters here being selective in their posting of stats and figures.

Ohmeha

awec wrote: »

Do you think they'll get the 1400?

The fact they're going with a voluntary stage suggests that they believe there's enough staff ready and willing to jump.

BOI specified that it was 'headcount' would be reduced. There is a strong suspicion in both BOI and AIB that alot of these jobs in the Irish banks will still be there and will be outsourced/offshored and staff affected could be forced to take redundancy as they won't be able to relocate to Dublin or wherever, this happened in the last couple of years to some of BOIs regional offices

beauf

I thought banks had largely already culled staff and reduced staff in branches and reduced branches before all this anyway.

Assetbacked

https://www.rte.ie/news/business/2020/0306/1120539-aib-annual-results/#:~:text=AIB%20has%20said%20it%20plans,announced%20by%20the%20bank%20today.

That was at the beginning of March in respect of AIB, some of the targets and cost-cutting potentially need to be reviewed after today's story of AIB sliding into a net loss of €700 million for the first 6 months of the year. Net new lending across the group fell 27 per cent to €4.4 billion, while other income plunged 31 per cent to €220 million as fees and commissions took a hit as a result of lower economic activity. 64,000 mortgage payment breaks. The bit in bold below is an understatement!

Plans for initial job reductions this year have been paused, even as rival Bank of Ireland announced on Tuesday that it has opened up a voluntary severance programme under its aim to cut more than 1,400 jobs over the coming years.

“While our strategic priorities and medium-term financial targets remain unchanged, the challenge to achieve these is greater as a direct result of the COVID-19 health crisis,” AIB said on Thursday.

“We are considering the future shape of our business in order to adjust to the financial impact of COVID-19 and equally to examine the opportunities presented by the crisis, namely, the acceleration of themes such as digitisation, flexible working and sustainability, so that AIB maintains a strong and resilient balance sheet, generates sustainable profits and returns capital to shareholders.”

https://www.irishtimes.com/business/financial-services/aib-seeks-to-frontload-covid-19-hit-with-1-2bn-loans-charge-1.4323587

Claw Hammer

beauf wrote: »

I thought banks had largely already culled staff and reduced staff in branches and reduced branches before all this anyway.

The days of bank branches are numbered. The overhead of maintaining bricks and mortar branches is too high. The days when the banks needed a branch on the high street to attract the business from the adjacent retailers are over. The move away from cash means there is no need for cash drop facilities. The cost of holding cash as opposed to making money from it means chasing cash deposits is no longer attractive. Virtual banks are cherry-picking away at the profitable business leaving the tradition banks carrying high overheads and limited means of generating profitable business to enable them to carry such business.
I would not be in any hurry to buy shares in any of the traditional banks.

Bass Reeves

yosser hughes wrote: »

There are a lot of bank staff who got burned with property investments and also bank shares, a double whammy. Many are just not in a good position at all as a result.
The ones who were in a good position have already availed of previous VR offers after 2008

And if they did it was 10 years ago. VR deal in companies attractiveness is all related to your age. If you still have kids to go to college it's not attractive. Most of these older staff would never get jobs on the same pay and conditions and definately not in smaller and mid sized towns branches. Therefore these deals are often only attractive to staff that are at or near pension age.

No point leaving a 70k /year job at 50years if age to go working for 40k or less in wages. over 15 years that is 450k before tax. These older staff need to be in the right age bracket to look at these deals. Fir traditional banks the fear us these staff will stay beyond 65 when they usually retired before. Since the RTE case last year more and more companies in this situation are looking to incentive these staff to leave

Iceman29

JimmyVik wrote: »

Same people saying prices are going to go down dont buy now, were saying the same thing then.

Same people saying buy because prices are going to go up, were saying the same thing then too.

You should read them. They are excellent. And just go to show you the reasons that we all think things are going to happen, dont actually turn out to be the reasons, even if they do happen. Make you realize that myself and everyone else who give a prediction, is only guessing at the end of the day. But you would think some are economists, psychic even, the way they are so cock sure that they are right with their predictions.
If they are that good, none of them will be posting here in 5 years. They will be using that skill and sipping Martinis in Barbados with their riches from such skill

So just to be totally clear......these people were actually correct in 08/09?

fliball123

Iceman29 wrote: »

So just to be totally clear......these people were actually correct in 08/09?

yeah but if you look back the majority of them for saying there is going to be a recession for more than 5 years at some point they were going to be right

Hubertj

Iceman29 wrote: »

So just to be totally clear......these people were actually correct in 08/09?

It seems like some people always say don’t buy now as the market will crash. They remind me of Liverpool fans saying this is the year they will win the title... for the last 30 years. Eventually they were correct.

Common sense would indicate prices will fall over the next 12-24 months. That doesn’t mean people won’t purchase.

Marius34

JimmyVik wrote: »

Same people saying prices are going to go down dont buy now, were saying the same thing then.

Same people saying buy because prices are going to go up, were saying the same thing then too.

You should read them. They are excellent. And just go to show you the reasons that we all think things are going to happen, dont actually turn out to be the reasons, even if they do happen. Make you realize that myself and everyone else who give a prediction, is only guessing at the end of the day. But you would think some are economists, psychic even, the way they are so cock sure that they are right with their predictions.
If they are that good, none of them will be posting here in 5 years. They will be using that skill and sipping Martinis in Barbados with their riches from such skill

I don't think you would find any of those people in this thread.

Springy Turf

The thing is, the decision to buy is not as simple as whether or not it will be cheaper. People need to consider:

- Will they have access to a mortgage this time next year to be able to take advantage of a price drop
- What is the financial cost of waiting (Rent vs drop in house value)
- Will they have to stay in their current job so that they are eligible for a mortgage when they want to buy
- Do they have children that they want to start in a local school where they want to buy
- Is the price likely to drop significantly at their price point (i.e. there might be a 20% drop on million euro houses, and a 5% drop on 300,000 euro houses).
- How difficult is their current living situation
- Is it possible they will lose enough equity in their current house to leave them without enough for a deposit on their next house.
- How much will your cash be worth this time next year?

It's seems pretty much certain there will be a drop in price. When that happens and by how much is the question. And waiting for the price drop is not free.

Even if you agree with those who say the whole house of cards will fall apart - it seems very hard to predict when that might happen. Despite the economic turmoil, the stock market is in rude health. I have been amazed to see stocks just steadily climb for years, and now continue during this pandemic.

brisan

awec wrote: »

How many 4th year apprentices do you think can buy 3 bed semi's today?

I know a couple who have ??

How many couples are prepared to put one full paycheck into savings every week
How many couples are prepared to live off the other paycheck, paying housekeeping to both sets of parents,bus fares,clothes ,going out only one night a week sometimes just to the cinema
How many couples will forego holidays for two years and just have one weekend away.
How many couples will do without a car
How many couples will go without takeaways,never dream of getting a taxi
How many couples will buy a house that needs work and do it up room by room,with second hand furniture to start.
Different times in the early 80s and different values

Pelezico

Springy Turf wrote: »

The thing is, the decision to buy is not as simple as whether or not it will be cheaper. People need to consider:

- Will they have access to a mortgage this time next year to be able to take advantage of a price drop
- What is the financial cost of waiting (Rent vs drop in house value)
- Will they have to stay in their current job so that they are eligible for a mortgage when they want to buy
- Do they have children that they want to start in a local school where they want to buy
- Is the price likely to drop significantly at their price point (i.e. there might be a 20% drop on million euro houses, and a 5% drop on 300,000 euro houses).
- How difficult is their current living situation
- Is it possible they will lose enough equity in their current house to leave them without enough for a deposit on their next house.

It's seems pretty much certain there will be a drop in price. When that happens and by how much is the question. And waiting for the price drop is not free.

Why is it not free or nearly free? There are a lot of costs to owning a property including maintenance, insurance, and interest costs.

If someone can live with their parents fir a year or two they would be unwise to buy now.

My son was gazumped in February on a small two bed in Dublin. How lucky he was not to be successful. Now he is staying at home and with the girlfriend, hopefully for a year.. maybe two.

He can save and watch his preferred property fall at the same time. It is a double whammy of saving.

I feel like sending the buyer of that property a small gift as appreciation for the get out of jail card.

0gac3yjefb5sv7

Pelezico wrote: »

Why is it not free or nearly free? There are a lot of costs to owning a property including maintenance, insurance, and interest costs.

If someone can live with their parents fir a year or two they would be unwise to buy now.

My son was gazumped in February on a small two bed in Dublin. How lucky he was not to be successful. Now he is staying at home and with the girlfriend, hopefully for a year.. maybe two.

He can save and watch his preferred property fall at the same time. It is a double whammy of saving.

I feel like sending the buyer of that property a small gift as appreciation for the get out of jail card.

Good for you. He may not have a job in a year or two and more than likely, there will be no properties for sale in the area he wants.

fliball123

Pelezico wrote: »

Why is it not free or nearly free? There are a lot of costs to owning a property including maintenance, insurance, and interest costs.

If someone can live with their parents fir a year or two they would be unwise to buy now.

My son was gazumped in February on a small two bed in Dublin. How lucky he was not to be successful. Now he is staying at home and with the girlfriend, hopefully for a year.. maybe two.

He can save and watch his preferred property fall at the same time. It is a double whammy of saving.

I feel like sending the buyer of that property a small gift as appreciation for the get out of jail card.

The problem here is he might not get a property where he wants supply is being seriously squeezed in this country mark my words there will not be much of a drop due to competition for lefties and this will increase as people cant afford a home due to no work and righties and this will increase as REITS and vultures can still come in here buy a whack load of properties give it the government and get them to mange it for them and giving it to the lefties to have them housed. The deck is stacked

brisan

Akesh wrote: »

Some people really don't understand inflation... Imagine writing that post you quoted thinking you were making a valid point :eek:

As a 4th year apprentice I earned about 5k a year.
4th year apprentice now earns about 40k
Thats inflation as is house prices
We needed a lot more than 10% deposit and paid more of our weekly income in repayments
We paid a little more than half my monthly salary on mortgage ie 295 a month (Thats qualified wages )
Thats the equivalent of a 4th year apprentice paying about 1500 a month now
That will get you a 400k mortgage ,so that plus your deposit will buy a decent house anywhere in the country

Springy Turf

Pelezico wrote: »

Why is it not free or nearly free? There are a lot of costs to owning a property including maintenance, insurance, and interest costs.

If someone can live with their parents fir a year or two they would be unwise to buy now.

My son was gazumped in February on a small two bed in Dublin. How lucky he was not to be successful. Now he is staying at home and with the girlfriend, hopefully for a year.. maybe two.

He can save and watch his preferred property fall at the same time. It is a double whammy of saving.

I feel like sending the buyer of that property a small gift as appreciation for the get out of jail card.

Sure, you might have people in their 20s, happy to live with their parents for 1-2 years while the dust hopefully settles. That's assuming the current uncertainty is over in a year or two, and you can get the credit you need to beat cash purchasers / value investors to the punch. But that is just one set of circumstances - what about the others I mentioned?

AlmightyCushion

brisan wrote: »

As a 4th year apprentice I earned about 5k a year.
4th year apprentice now earns about 40k
Thats inflation as is house prices
We needed a lot more than 10% deposit and paid more of our weekly income in repayments
We paid a little more than half my monthly salary on mortgage ie 295 a month (Thats qualified wages )
Thats the equivalent of a 4th year apprentice paying about 1500 a month now
That will get you a 400k mortgage ,so that plus your deposit will buy a decent house anywhere in the country

You can only borrow 140k on a 40k income.

brisan

MacronvFrugals wrote: »

Must have been tough competing with IRES back then lol

No not really ,but it was tough competing with thousands of other couples who were prepared to make the same sacrifices you did to buy a house.
Our 4th year apprentice takes home over 500 a week
If him and his partner did what we did he would save 25k this year
Last year he would have saved 20k aprox
Thats 45k deposit saved
Granted both him and his partner would have had 2 tough years ,but then a house at the end of it at 22 years of age

brisan

AlmightyCushion wrote: »

You can only borrow 140k on a 40k income.

I did say together so he has a partner and in normal times an exemption

Pelezico

Springy Turf wrote: »

Sure, you might have people in their 20s, happy to live with their parents for 1-2 years while the dust hopefully settles. That's assuming the current uncertainty is over in a year or two, and you can get the credit you need to beat cash purchasers / value investors to the punch. But that is just one set of circumstances - what about the others I mentioned?

My boy has the run of the house. He is over the moon about not having bought in February.

And everyday the reductions keep coming in. I think we may see another huge tranche by close of play today.

Right now, he reckons he is in the money, courtesy of a stranger with deeper pockets.

What is not to like?

brisan

fliball123 wrote: »

Well I did it, anyone I know in my extended family and friends who has a house now did it, my parents before me did it. Now weather it is right or wrong I couldn't answer that but on the flip side why should it just be handed to the current generation? All I know is that someone selling wont just go ahh look at this poor 20/30 something we have to help out this poor buyer out as they partied for a few years and had a lot of holidays and unfortunately now they have very little savings so lets drop our price to suit them. That is just not a reality we live in. If you want something you have to sacrifice and its not just in property but its pretty much how it works in all facets of life

But surely you are entitled to go travelling the world for a year and come back ad buy a house.

Springy Turf

Pelezico wrote: »

My boy has the run if the house. He is over the moon about not having bought.

And everyday the reductions keep coming in. I think we may see another huge tranche by close of play today.

Right now, he reckons he is in the money, courtesy of a stranger with deeper pockets.

What is not to like?

I am trying to explain that not everyone is in your son's position, and your response is how great your son's position is...

fliball123

brisan wrote: »

But surely you are entitled to go travelling the world for a year and come back ad buy a house.

You sure are but dont be expecting a house to be waiting for you