Irish Property Market 2020 Part 2

MacronvFrugals

Sarn wrote: »

Based on a 10% deposit, say 20k, would allow you to borrow for a 200k house. An extra 10k would allow you to borrow for a 300k house. This is assuming you haven’t maxed out your salary multiple.

That assumption is bigger than the children's hospital final bill

fliball123

PropQueries wrote: »

I don’t think the vulture funds etc. will be a big player this time around. Last time, they were able to buy in bulk and at significant discounts from NAMA, the Irish banks and the UK banks leaving Ireland. This time, would they really be interested in outbidding Joe Bloggs for a 1990’s three bed semi-detached in Lucan?

Also, I don’t think the Government has the cash to continue outbidding Joe Bloggs as we already have one of the highest debt levels in the world in per capita if not GDP terms.

Well where else will they get a guaranteed 6-8% ROI backed by the government. I think its a no brainier to have a rock solid return ongoing with other risk strategies as well as our government looking after the maintenance, can you show me somewhere else giving back the same return (state guaranteed)

fliball123

MrMusician18 wrote: »

You'll have to clarify your numbers there. I don't see how an extra 10k deposit could have a 10x multiplier.

Broadly, you need your 20% deposit and you can borrow 3.5x your salary. Any extra savings can be used to reduce the mortgage size or increase the value of the purchase by the same amount. The capacity to borrow isn't changed.

FTB only need 10% deposit unless this has changed?

Mr Hindley

fliball123 wrote: »

FTB only need 10% deposit unless this has changed?

But the salary multiple is also a key part of assessing how much you can borrow. Having a larger deposit removes one limit, but the limit imposed by your salary remains unchanged.

fliball123

Mr Hindley wrote: »

But the salary multiple is also a key part of assessing how much you can borrow. Having a larger deposit removes one limit, but the limit imposed by your salary remains unchanged.

Which is why I included that fact in my original post we were taking about deposits I simply stated that if someone had an extra 10k of a deposit then they could borrow another 100k if they can keep within the 3.5x salary limit

Pelezico

Mr Hindley wrote: »

But the salary multiple is also a key part of assessing how much you can borrow. Having a larger deposit removes one limit, but the limit imposed by your salary remains unchanged.

The salary requirement represents the ceiling for most borrowers.

Any statement to the contrary is disingenuous.

PropQueries

fliball123 wrote: »

Well where else will they get a guaranteed 6-8% ROI backed by the government. I think its a no brainier to have a rock solid return ongoing with other risk strategies as well as our government looking after the maintenance, can you show me somewhere else giving back the same return (state guaranteed)

Excellent point. But, I think the government is going to quickly start looking at the rents they're currently paying, especially through HAP, as it won't take them long to realise they're the only player in town and that's when they may start reducing (significantly) the amounts they're paying. Vulture funds are interested in returns, but only if it's easy. They're not that interested in micro-management, which probably explains Ires Reit's decision to sell 150 apartments recently.

fliball123

PropQueries wrote: »

Excellent point. But, I think the government is going to quickly start looking at the rents they're currently paying, especially through HAP, as it won't take them long to realise they're the only player in town and that's when they may start reducing (significantly) the amounts they're paying. Vulture funds are interested in returns, but only if it's easy. They're not that interested in micro-management, which probably explains Ires Reit's decision to sell 150 apartments recently.

Remember the government are not in for a profit they are looking to house people and according to all the lefties there currently is not enough houses either for sale or rent so I cant see them dropping anything any time soon as long as the lefties keep up the emotional blackmail

Pelezico

Cyrus wrote: »

i dont think we are, you do understand the definition right?

Of course. A recession is when my neighbour loses his job.


A depression is when I lose my job.

MacronvFrugals

fliball123 wrote: »

Which is why I included that fact in my original post we were taking about deposits I simply stated that if someone had an extra 10k of a deposit then they could borrow another 100k if they can keep within the 3.5x salary limit

I know a lad looking to buy a second hand home in Tallaght costing 205k, he earns 30k a year and has a 70k deposit - with the bank its just not enough even with that substantial deposit.

Hes now trying the Rebuilding Ireland scheme which should get him over the line hopefully.

fliball123

MacronvFrugals wrote: »

I know a lads looking to buy a second hand home in Tallaght costing 205k, he earns 30k a year and has a 70k deposit - with the bank its just not enough even with that substantial deposit.

Hes now trying the Rebuilding Ireland scheme which should get him over the line hopefully.

Now imagine he has a partner as possible 85 to 95% of people applying for a mortgage will be in a couple when going for a mortgage and say there partner also earns 30k (both of which are about 8k under the average wage for this country) they would get the loan. It will always be harder for a single applicant no matter what the circumstances - recession or no recession, pandemic or no pandemic.

MacronvFrugals

fliball123 wrote: »

Now imagine he has a partner as possible 85 to 95% of people applying for a mortgage will be in a couple when going for a mortgage and say there partner also earns 30k (both of which are about 8k under the average wage for this country) they would get the loan. It will always be harder for a single applicant no matter what the circumstances - recession or no recession, pandemic or no pandemic.

Thats true, but i think it highlights the deposit is pretty much meaningless unless your within the 3.5x multiplier.

PropQueries

fliball123 wrote: »

Remember the government are not in for a profit they are looking to house people and according to all the lefties there currently is not enough houses either for sale or rent so I cant see them dropping anything any time soon as long as the lefties keep up the emotional blackmail

I think the Government are 100% in it for the profit. They get 50% of whatever a landlord receives. But, I think it will come down to money. Everything is paid with borrowed money. We're highly indebted, the eastern european members of the Euro aren't. It's not going to take them long to ask why are they lending us money to pay a state pension of €200 a week to Irish pensioners when their own pensioners only receive €50 a week. That's when the money will dry up I reckon.

fliball123

MacronvFrugals wrote: »

Thats true, but i think it highlights the deposit is pretty much meaningless unless your within the 3.5x multiplier.

Well its not really but there is a fall off at the higher end but it is significant if the property in question is not at the higher end..in an average scenario and playing it out if a couple were earning the average wage (roughly) 68k and had 10k saved they could only borrow 100k, if they had 20k saved they could borrow 200k if tthey had 30k they could borrow 238k, so it just means they have more properties to choose from.

fliball123

PropQueries wrote: »

I think the Government are 100% in it for the profit. They get 50% of whatever a landlord receives. But, I think it will come down to money. Everything is paid with borrowed money. We're highly indebted, the eastern european members of the Euro aren't. It's not going to take them long to ask why are they lending us money to pay a state pension of €200 a week to Irish pensioners when their own pensioners only receive €50 a week. That's when the money will dry up I reckon.

Emm the scenario I am talking about are companies/people being able to give a property to the government and they give it out to supposedly homeless and less fortunate. The government has to pay the landlord 85% of the going rent rate (so yes they get 50% back from the landlord in tax) but they still have to pay the other 50% and pay for the upkeep so the country/government/tax payer is making a big loss.

We have been over 200 billion in debt since 2010/11 and no one has stopped lending us money we are now getting it at a much lower rate and when money dries up then the lads just print more which is currently happening

fliball123

Just noticing something on myhome today is the first time that increases have matched deceases, today has 22 price changes 11 up and 11 down , I have not seen that since before Covid.

MrMusician18

Sarn wrote: »

Based on a 10% deposit, say 20k, would allow you to borrow for a 200k house. An extra 10k would allow you to borrow for a 300k house. This is assuming you haven’t maxed out your salary multiple.

At that level though it just means the person will reach their savings goal that bit sooner. If you're in the salary level that puts you maxing out at 300k it's unlikely you'll have 10k of annual purely luxury discretionary spending to put to savings.

We can argue about these edge cases all day but it's salary and salary multipliers not deposit that drives prices.
Because multipliers don't generally apply to deposits.

fliball123

MrMusician18 wrote: »

At that level though it just means the person will reach their savings goal that bit sooner. If you're in the salary level that puts you maxing out at 300k it's unlikely you'll have 10k of annual purely luxury discretionary spending to put to savings.

We can argue about these edge cases all day but it's salary and salary multipliers not deposit that drives prices.
Because multipliers don't generally apply to deposits.

I would hardly call his/her example an edge case its probably the most likely scenario a lot of people will try and secure the max amount for a mortgage so they have more options for buying and if something comes in that does not max it then win win you have a bit of cash for furniture or savings.

PropQueries

fliball123 wrote: »

Emm the scenario I am talking about are companies/people being able to give a property to the government and they give it out to supposedly homeless and less fortunate. The government has to pay the landlord 85% of the going rent rate (so yes they get 50% back from the landlord in tax) but they still have to pay the other 50% and pay for the upkeep so the country/government/tax payer is making a big loss.

We have been over 200 billion in debt since 2010/11 and no one has stopped lending us money we are now getting it at a much lower rate and when money dries up then the lads just print more which is currently happening

Great point. But I don't think the magic money tree will last for much longer. Last time we got lucky on three fronts: 1. The vulture funds came in to buy the distressed properties in bulk and at ridiculously low prices; 2. interest rates dropped to zero (ECB buying our debt) and; 3. the likes of Google etc. coming here for whatever tax loopholes we were offering.

This time around, I don't believe there will be much interest from vulture funds as there's nothing really left to buy in bulk, interest rates can't go down much further (well, maybe they can lol) and the likes of getting anymore Googles is probably limited due to both the changes in the international tax regime coming very quickly down the line and how many more Googles can there possibly be in the world.

fliball123

PropQueries wrote: »

Great point. But I don't think the magic money tree will last for much longer. Last time we got lucky on three fronts: 1. The vulture funds came in to buy the distressed properties in bulk and at ridiculously low prices; 2. interest rates dropped to zero (ECB buying our debt) and; 3. the likes of Google etc. coming here for whatever tax loopholes we were offering.

This time around, I don't believe there will be much interest from vulture funds as there's nothing really left to buy in bulk, interest rates can't go down much further (well, maybe they can lol) and the likes of getting anymore Googles is probably limited due to both the changes in the international tax regime coming very quickly down the line and how many more Googles can there possibly be in the world.

Its not a money tree its a printing press and these boyos can keep on printing.
Just on the many more Google comment we have comapnies like ticktok coming into the country and building large data centers , there will always be the next new shinny app and this country has the tax incentives, staff, and the only English speaking nation in the EU which makes it very attractive to companies looking for a base in the EU.

Like I said REITS, Vullture funds and other global investors will look at the ROI of 6 - 8% on Irish property as being a great way to make a profit without any risk as its backed by a nation why would you put your money into the black hole that are stocks and shares when the world is in meltdown?

MacronvFrugals

fliball123 wrote: »

Its not a money tree its a printing press and these boyos can keep on printing.
Just on the many more Google comment we have comapnies like ticktok coming into the country and building large data centers , there will always be the next new shinny app and this country has the tax incentives, staff, and the only English speaking nation in the EU which makes it very attractive to companies looking for a base in the EU.

Like I said REITS, Vullture funds and other global investors will look at the ROI of 6 - 8% on Irish property as being a great way to make a profit without any risk as its backed by a nation why would you put your money into the black hole that are stocks and shares when the world is in meltdown?

Data Centres are more of a hog than anything else making climate targets impossible for not all that many jobs.

PropQueries

fliball123 wrote: »

Its not a money tree its a printing press and these boyos can keep on printing.
Just on the many more Google comment we have comapnies like ticktok coming into the country and building large data centers , there will always be the next new shinny app and this country has the tax incentives, staff, and the only English speaking nation in the EU which makes it very attractive to companies looking for a base in the EU.

Like I said REITS, Vullture funds and other global investors will look at the ROI of 6 - 8% on Irish property as being a great way to make a profit without any risk as its backed by a nation why would you put your money into the black hole that are stocks and shares when the world is in meltdown?

All good points but if the ECB keeps printing money and giving it to inefficient western european countries to keep up a standard of living that most eastern european counties envy, wouldn't they eventually say stop and say, either we all get it or nobody gets it. If everybody gets it, money becomes worthless and the EU will fall even further behind real countries like the United States etc., as there would be zero incentive to innovate etc.

fliball123

MacronvFrugals wrote: »

Data Centres are more of a hog than anything else making climate targets impossible for not all that many jobs.

I think I seen 150+ jobs not to be sniffed at in the current climate

fliball123

PropQueries wrote: »

All good points but if the ECB keeps printing money and giving it to inefficient western european countries to keep up a standard of living that most eastern european counties envy, wouldn't they eventually say stop and say, either we all get it or nobody gets it. If everybody gets it, money becomes worthless and the EU will fall even further behind real countries like the United States etc., as there would be zero incentive to innovate etc.

The thing is the US are also printing everywhere is printing if you look at gold and sliver their prices are rocketing but I take the point about the standard of living

MacronvFrugals

fliball123 wrote: »

I think I seen 150+ jobs not to be sniffed at in the current climate

These are always overblown, take cleaners and security out of that and you maybe have a few dozen network admins, technicians ISP guys etc.

Now the downside the gigantic amount of power the things use, Apples one in Athenry was scheduled to use as much power as the whole of Limerick, is that worth 70 or 80 decent jobs i'm not so sure.

fliball123

MacronvFrugals wrote: »

These are always overblown, take cleaners and security out of that and you maybe have a few dozen network admins, technicians ISP guys etc.

Now the downside the gigantic amount of power the things use, Apples one in Athenry was scheduled to use as much power as the whole of Limerick, is that worth 70 or 80 decent jobs i'm not so sure.

Do these guys not have to pay for electricity?

PropQueries

fliball123 wrote: »

The thing is the US are also printing everywhere is printing if you look at gold and sliver their prices are rocketing but I take the point about the standard of living

That's true, but the United States has one big advantage that Ireland doesn't have. They can literally print a $20 Trillion dollar bill in the morning and pay off their debt. We're completely reliant on what the ECB decides (the money we borrow in Euro is basically a foreign currency) and I could be wrong, but as I've said, if I was a citizen of an eastern European country, I'd be asking my government why is Ireland getting all this free money, when will it paid back and why aren't we getting it. I reckon the ECB money printing will stop in the next 18 month and then we will be told to cut back considerably as there's no more free money coming our way.

fliball123

PropQueries wrote: »

That's true, but the United States has one big advantage that Ireland doesn't have. They can literally print a $20 Trillion dollar bill in the morning and pay off their debt. We're completely reliant on what the ECB decides (the money we borrow in Euro is basically a foreign currency) and I could be wrong, but as I've said, if I was a citizen of an eastern European country, I'd be asking my government why is Ireland getting all this free money, when will it paid back and why aren't we getting it. I reckon the ECB money printing will stop in the next 18 month and then we will be told to cut back considerably as there's no more free money coming our way.

I was under the impression that the virus is everywhere and that all countries in the EU are getting money from the ECB so they can hardly complain if they are getting it themselves.

I think your timeline on the money printing will all depend on the virus if we get a cure in the next 6 months it might be sooner but as long as a large cohort of people cannot work within the current confines then the money printing will continue.

MacronvFrugals

fliball123 wrote: »

Do these guys not have to pay for electricity?

They will pay of course but that electricity isnt free when the EU start breathing down our neck with fines -

https://www.irishtimes.com/business/technology/why-ireland-s-data-centre-boom-is-complicating-climate-efforts-1.4131768

PropQueries

fliball123 wrote: »

I was under the impression that the virus is everywhere and that all countries in the EU are getting money from the ECB so they can hardly complain if they are getting it themselves.

I think your timeline on the money printing will all depend on the virus if we get a cure in the next 6 months it might be sooner but as long as a large cohort of people cannot work within the current confines then the money printing will continue.

True as well. But it depends on if their citizens (who are highly educated by the way, as they basically went nuts (not really reported here) over the money given to Greece a few years ago as they were saying how come the Greeks get these massive pensions and we don't), continue to agree to lend us money to pay our pensioners 4 to 5 times what their pensioners get. I think (and I could be wrong) this time will be different as they've matured and they are no longer the new kids in the block.