Is it fair to blame the Banks & Government if you cant get mortgage approval?

Peter Flynt

Government policy has been to award tax breaks to vulture funds who are buying up entire estates and thus forcing Irish people out of the market as a result.

So, yes, government (i.e. FF/FG/GP) are entirely responsible.

This is a criminal betrayal of the Irish people.

titan18

Jinglejangle69 wrote: »

House prices are at the price they are as people are buying them at that price.

The only way they come down is if people can't afford them.

When you've investment funds and councils with tax money buying the houses, that argument doesn't really apply.

Jinglejangle69

titan18 wrote: »

When you've investment funds and councils with tax money buying the houses, that argument doesn't really apply.

Yeah agree somewhat.

Councils renting houses at high rents to give to people who pay 50 euro a week isn't sustainable.

Starting to hit home now I think.

Donald Trump

SnuggyBear wrote: »

I agree with this to be honest. People not willing to put in the work saving for a house or trying to buy a house in an area they can't afford. You can't have it all.

Depends on how fast the target is moving. House prices increased by 20k over the last year according to daft. https://www.irishtimes.com/business/economy/house-prices-jump-by-20-000-amid-covid-supply-shock-1.4524301

Sleeper12

Padre_Pio wrote:

It's in the best interest of the government to keep prices high, as every homeowner (90% of voters probably) is seeing their nest egg increase in value. This is nothing new. House prices have been crazy swings for 20 years at this stage.

Of course the government are responsible for high prices though still lower than the late 0s. They ignored warnings of home shortages & homelessness from 2012. When they were eventually acted several years later they panicked & brought in the flawed fast track planning that is actually taking longer than regular planning. A large number of fast tracked planning has been overturned in the courts. Only last week the development beside St Anne's was not just overturned in the court but the judgment raised serious concerns about rezoning the land & decided that it hasn't been rezoned for homes at all, let alone over 600 homes. The same government set the scene that encourages foreign pension funds to buy entire appartment complex off the plans and keep them for rental only. This has been going on for a number of years but recently the same has happened to new housing estates. Rental only.

Padre_Pio

Sleeper12 wrote: »

This has been going on for a number of years but recently the same has happened to new housing estates. Rental only.

True. The govt at the time stimulated the market in 2012 to get people out of neg equity. It worked, only it was never reviewed and now it's a major problem.

Anyone see today's FAH sketch?

https://www.youtube.com/watch?v=8-xEOvfNTRc

Sleeper12

Cilldara_2000 wrote:

79.3% of heads of households were homeowners in 1991. Every census since it has fallen, in 2016 it was 67.6%.

1991 we were starting our Celtic Tiger believe it or not. Not a fair comparison. Compare years from the 80s and you will see different results especially when you factor in the Irish that had to leave the country

Donald Trump

Sleeper12 wrote: »

1991 we were starting our Celtic Tiger believe it or not. Not a fair comparison. Compare years from the 80s and you will see different results especially when you factor in the Irish that had to leave the country

For the people who got the jobs in the 80's, it was like shooting fish in a barrel though. Having decent income when most others didn't made things much easier.

Donald Trump

Cilldara_2000 wrote: »

Luxury!

Cilldara_2000

Sleeper12 wrote: »

1991 we were starting our Celtic Tiger believe it or not. Not a fair comparison. Compare years from the 80s and you will see different results especially when you factor in the Irish that had to leave the country

1971 was 70.8% and 1981 was 74.4%. You have to go back to 1961 for a lower figure than we had in 2016.

https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/tr/

Bear in mind this was a response to your post:

There were people in the 50s, 60s, 70s, 80s, 90, 0s etc that couldn't afford a run down dog box. It's not a new thing. Some people never get to buy their own home. Is a sad fact of life but it isn't a new thing for this generation.

The upshot is that for most of these decades, proportionately more people own their own home than do now. And the trend has being going the wrong way for the last 30 years. This is unacceptable IMO in what is supposed to be one of the richest countries in the world, as is the general principle of having people paying over a king's ransom to some foreign pension fund instead of being able to save/invest for their own retirement. What are these people supposed to do at age 65 (or 68 or 70 or 75 as it might by the time they get there) after 40+ years of paying ~€20k a year to some vulture fund?

almostover

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

1. Traveling the world
2. Spending 3-6 years in college
3. Living in Australia for a couple of years
4. Buying new cars
5. Buying the latest smartphones
6. poor family planning
7. Going on expensive holidays every summer
8. Boozing every weekend
9. Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"



Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.


For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".


Cant blame the banks and government for everything, personal responsibility has to play a part, no?

I'll bite as a 30 year old in the process of buying a new house with my partner. Both of us degree educated with good jobs and paying rent in Cork. We can barely, and I mean barely afford to buy a house approx. 25 mins from the city. I consider us to be very lucky.

1. Travel the world? Neither of us have travelled or backpacked. We have gone on foreign holidays in the past.
2. Both of us spent 4 years in college. Idea being to get a good career in a well paid job. Without this part we'd be applying for social housing.
3. Neither of us have lived in Oz or every have graced the place with our presence.
4. I drive a 8 year old car, my partner has a 17 year old car.
5. We both have 2-3 year old smartphones.
6. We have no children.
7. We would have gone on a foreign holiday for 10days each summer but we would have been very budget conscious. Mostly self catering stays in Europe. In most cases the equivalent in Ireland would have cost the same.
8. We would have gone out 1-2 nights per month pre-covid with the exception of December.
9. I moved oit of home at 18 to go to college. Haven't been back since. No work in my field near my home place.

Neither of my parents had a third level education, smoked and drank every weekend and bought their house easier than I will mine. My father was unemployed briefly at the time when when he drew down the mortgage in 1985. These sort of things are unheard of today. The 80s were very bad from a jobs and economic perspective but if you had a job you could afford to buy a house. The issue is simply the price of houses and rent relative to the median income. It's not us millennials being spoilt brats who waste all their money on lip fillers and avocado toast.

SnuggyBear

almostover wrote: »

I'll bite as a 30 year old in the process of buying a new house with my partner. Both of us degree educated with good jobs and paying rent in Cork. We can barely, and I mean barely afford to buy a house approx. 25 mins from the city. I consider us to be very lucky.

1. Travel the world? Neither of us have travelled or backpacked. We have gone on foreign holidays in the past.
2. Both of us spent 4 years in college. Idea being to get a good career in a well paid job. Without this part we'd be applying for social housing.
3. Neither of us have lived in Oz or every have graced the place with our presence.
4. I drive a 8 year old car, my partner has a 17 year old car.
5. We both have 2-3 year old smartphones.
6. We have no children.
7. We would have gone on a foreign holiday for 10days each summer but we would have been very budget conscious. Mostly self catering stays in Europe. In most cases the equivalent in Ireland would have cost the same.
8. We would have gone out 1-2 nights per month pre-covid with the exception of December.
9. I moved oit of home at 18 to go to college. Haven't been back since. No work in my field near my home place.

Neither of my parents had a third level education, smoked and drank every weekend and bought their house easier than I will mine. My father was unemployed briefly at the time when when he drew down the mortgage in 1985. These sort of things are unheard of today. The 80s were very bad from a jobs and economic perspective but if you had a job you could afford to buy a house. The issue is simply the price of houses and rent relative to the median income. It's not us millennials being spoilt brats who waste all their money on lip fillers and avocado toast.

Isn't that his point? You didn't do those things and you bought a house. I didn't do those things and I bought a house too.

From reading recently a couple of articles from banks and brokers, mortgage approvals in Q4 2020 and Q1 2021 were at almost record highs. The problem isn’t getting approval..

2/3 bed terraced houses in Crumlin, Finglas, Ringsend have been selling for 340-475k just as some examples. None of them hugely amazing either. I know Dublin isn’t the entire country, but unless you’re hitting 100k salary on your own or as a couple, even traditionally low cost areas are way out of reach of young professionals.

Cal4567

In answer to the question. Yes. The blame is completely at the feet of government. A run through housing policy over the last 40 years has shown there has never been a long term strategy put in place by politicians, beyond what it takes them to get elected next time around.

The affordability crisis has been developing since the crash. 2008. That's 13 years ago now. I am reminded of the politicians and their fan boy economists back then trying to persuade us the Celtic Tiger had more roaring still to do. The next generation of politicos and their ever faithful civil servants seem to be as inept.

jay0109

Oymyakon wrote: »

Mortgage approval isn't the issue - It's the cost and lack of availability of housing. If mortgage lending rules loosened, house prices would soar even higher if we don't tackle the root issue - supply.

There are 2 root issues in play. You've named one- supply.
The other is demand which none of the commentators/media every seem to mention but it's the elephant in the room.

If we are going to continue to increase our population by at least 30,000 a year through immigration, then we are not going to resolve the housing issue in the next 20 years and maybe never.

The rest of Europe are talking about immigration....why is it such a taboo subject here?

Atlantic Dawn

The whole situation is a bloody joke, people who work can't afford a house so can't have a family, there will not be enough workers coming up to support the older population. One of the major parties in power supports the builders, the other supports landlords and investment funds, anyone voting for either and complaining about housing is a class 1 fookwit.

irelandpride

i earn 40K in a county well outside of Dublin and the average price of houses in my location is 225k.

With the 3.5 rule all I can get is 140K and need 70K for a deposit.

I have two options:

One is to move back in with parents and live off 100 euro a week for three years solid to come up with the deposit.

Second option is to get a job in Dublin to get 55K and commute 100 minutes to work and 100 minutes back from work to get 55k * 3.5 to get 192,500 from the bank and hopefully my old company takes me back.

Its a **** situation but going to have to do it.

Montage of Feck

What is so wrong with negative equity anway? Its a home not an investment, buying and selling at the market rate would ensure that it doesn't effect moving or upgrading home; well in a fair market anyway, the current one is a bit skewed.

Diemos

Does it have to be an either or situation?
Couldn't both be true?

There is no doubt that the price of houses vs the median wage has tilted very badly in the past 30 years but that's been a global phenomenon.
Gov meddling in the housing market does nothing but inflate the thing.
Everyone is complaining about vulture funds now that they are making profits but no on was complaining about them in 2012 or 2013.
We had a sh!te rental set up 10 years ago but it worked, basically both sides had fcuk all rights.
Now the gov has given a lot of power to tenants but no uptick in landlord rights.
People here hold up the mainland Europe rental model but gloss over the fact that you can be evicted in a heartbeat if you are not playing ball.
So small landlords have bailed or are bailing out of the market and this drives rental prices up.
The rent caps have failed, now property investment groups are finding ways to refund tenants to keep the head line figure of the rental amount artificially high. But you need some very big time players to have the weight to play that game.
Our bank charge us almost double the EU mortgage rates.

Yes the OP's point about personal responsibility hold some weight but they are not all even, having an expensive car that you think you can afford is a larger financial anchor than the rest combined.
People talk about affordability in the 80's, but it's not a like for like comparison, I'm a child of the 80's and where I grew up only every 2nd house had a family car, no house had 2 cars.
The didn't have PCP, they didn't have credit cards.

I think we did about half the things on OP's list and were able to buy in Dublin in our 30's:

Spending 3-6 years in college
Buying the latest smartphones
Going on expensive holidays every summer
Moving out with friends to live the life

But we had zero debt, the car was bought in cash.

Here is the thing though, there is a large silent group of folk in their 20's and 30's who are buying at these prices, are able to afford these prices.
They won't post about it on facebook, they probably don't post anything on facebook, but they exist.

The 3.5x multiplier that people keep bitching about is the only thing stopping this market from exploding. Hearing folk complain about it is like turkeys voting for Christmas.

Diemos

irelandpride wrote: »

i earn 40K in a county well outside of Dublin and the average price of houses in my location is 225k.

With the 3.5 rule all I can get is 140K and need 70K for a deposit.

I have two options:

One is to move back in with parents and live off 100 euro a week for three years solid to come up with the deposit.

Second option is to get a job in Dublin to get 55K and commute 100 minutes to work and 100 minutes back from work to get 55k * 3.5 to get 192,500 from the bank and hopefully my old company takes me back.

Its a **** situation but going to have to do it.

Or you could buy below average........

jimmycrackcorm

L1011 wrote: »

My parents bought a new 4 bed semi D on a commuter rail line from Dublin for a tad over 3x the median single salary in 1986.

The equivalent now - a new, smaller albeit better insulated house on a smaller site in the same town would be closer to 10x a median single salary.

Sure, interest rates were higher but that doesn't even vaguely cancel out the affordability difference. And your average 1980s buyers probably drank like fish and smoked like chimneys based on average consumption of each in Ireland back then; which have both fallen significantly - that's why there was no money for holidays and the like.

This particular problem seems to be centred around Dublin and the commuter belt though. If you want to buy a home down the country then the affordability index is vastly much different and most urban towns do have homes and apartments close to the 3x / 4x median single salary now.

But when you're looking at Dublin then you have to consider the economic activity that is driving up demand and matching prices. A disproportionate number of high paying jobs in IT and Finance have such an effect. With this in mind then it's worth considering comparisons with other cities worldwide such as San Francisco "Scraping by on six figures? Tech workers feel poor in Silicon Valley's wealth bubble".

irelandpride

Diemos wrote: »

The 3.5x multiplier that people keep bitching about is the only thing stopping this market from exploding. Hearing folk complain about it is like turkeys voting for Christmas.

Oh dear God, People understand why the 3.5 rule is there :rolleyes::rolleyes::rolleyes:

People are giving out about high rents and the lack of supply.

Diemos wrote: »

Or you could buy below average........

Unless i want to live in a scumbag estate, No thanks.

The DayDream

What a load of absolute shíte.

Everyone in their 20s, 30s and 40s now was told to go to college to have a decent life. how is that on your list? Moronic.
Not to mention being simultaneously told to follow your dreams, travel, yada yada.

If you don't go to college and don't travel and don't buy a car, where does that leave you in Ireland? Living in a rural town of 1500 people, mostly retired, with no education, no transport and no way to even get to anywhere jobs are?

Like are you for real?

Jim2007

JizzBeans wrote: »

Cant blame the banks and government for everything, personal responsibility has to play a part, no?

No, but the voters on the other hand.... Do people seriously think that a housing policy based on people taking on huge amounts of debt or relying on social services is a smart idea? This is not the first housing crisis nor the second, it has not worked here, the UK, the US..... I can’t think of a single country where it does work!

Most countries in Europe have strong tenant/landlord protecting because they have seen “get on the property ladder”, BS for what it is. Buying a home is not an investment as it fails to meet any of the criteria for a good investment. And why is rent dead money, but a holiday is not, you get utility out of both.

Sadly I don’t see much change of realistic solutions coming forth until it gets so bad that voters start to question the entire premise of the housing policy. In the meantime except more tweaks and stop gap efforts.

MadYaker

My parents were able to get a mortgage in the 80s and buy a house when one of them was working part time and the other was basically on minimum wage and that was without help from their parents who had nothing. Good luck trying that today. Also the house they bought increased in value about 150% over the 30 years that they owned it. Good luck with that as well. Some things are easier for my generation and other things are harder, one of the things that is harder is owning a home.

GSBellew

fvp4 wrote: »

Also. Houses were cheaper back then relative to income and people could purchase them younger.

How far back is back then?

We bought about 17 years ago, my gross wage then was €350, my now wife's was approx €410, both of us full time 39 hours a week, we paid pretty much the same if not more than you would for the same house today.

We couldn't afford a TV for the first few years, never mind anything else, it wasn't easy, but it was worth it.

Two people on minimum wage today would gross more than we did, so that'd suggest a more static income to house price in our example, or indeed the opposite as minimum wage was a fair bit lower.

Kermit.de.frog

The banks want to give out as many mortgages as they can.

They only care about one thing, and one thing only, - can you pay it back?

If you can't you won't get a mortgage, simple as that.

GSBellew

GSBellew wrote: »

How far back is back then?

We bought about 17 years ago, my gross wage then was €350, my now wife's was approx €410, both of us full time 39 hours a week, we paid pretty much the same if not more than you would for the same house today.

We couldn't afford a TV for the first few years, never mind anything else, it wasn't easy, but it was worth it.

Two people on minimum wage today would gross more than we did, so that'd suggest a more static income to house price in our example, or indeed the opposite as minimum wage was a fair bit lower.

There’s no way that that income would get a house in Dublin today and Im dubious about the recent past although there was a time when banks were throwing money at anybody. That seems to be when you bought. Anyway it’s really Dublin and the cities where the big problem is.

The op, by the way, has pretty much poured out his information across boards. He’s single, a teacher, and lives down the country. He couldn’t buy in Dublin.

JizzBeans

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

1. Traveling the world
2. Spending 3-6 years in college
3. Living in Australia for a couple of years
4. Buying new cars
5. Buying the latest smartphones
6. poor family planning
7. Going on expensive holidays every summer
8. Boozing every weekend
9. Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"



Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.


For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".


Cant blame the banks and government for everything, personal responsibility has to play a part, no?

I’ve done a few things on this list alright. But when I was in college, for 5 years, I worked 2 jobs to pay for it and my nights out. Also, 100% mortgages were still flying around, albeit wrapping up. If I’d have known I’d need as big a deposit as I do, I’d probably have nixed a few things alright, but I didn’t live in Oz for a couple years or buy any new cars.
However, the problem now isn’t the deposit, it’s the size of the deposit. Instead of putting down 10%, to buy a new build in my area I need 80K and that’s with the HTB, to make up the shortfall. I don’t mind the deposit, I mind the price of the house, but as a single person it’s just not possible. By the time I save my 80K, prices will be well up and I’ll probably need 100k.
Nothing is being done to tackle the astronomical costs of housing, the problem is not the central bank rules. Could anyone imagine what the prices would be like if they weren’t there? Christ it makes my stomach turn.
Housing costs need to come back down to reality but people are so desperate they’re paying almost half a mil for 3 bed semis. Maybe David McWilliams was right, we should go on a buyers strike.
I don’t think 100% mortgages are a bad thing tbh. If you can pay 2k per month in rent and can’t afford a deposit then maybe it’s the answer. I’d also be a proponent of 30/35 year fixed rates but I can’t for the life of me figure out why we don’t have them. As long as we stuck to the 3.5 times income limit and 35% NDI limit, prices should stay in check.
Either way, we need houses in major numbers to be built, whatever type they are but nobody is handing out the money to do it and the ones that have the money get their plans voted down or planning is refused. We can’t have high density living if we don’t build any of it!

GSBellew

fvp4 wrote: »

There’s no way that that income would get a house in Dublin today and Im dubious about the recent past although there was a time when banks were throwing money at anybody. That seems to be when you bought. Anyway it’s really Dublin and the cities where the big problem is.

The op, by the way, has pretty much poured out his information across boards. He’s single, a teacher, and lives down the country. He couldn’t buy in Dublin.

Not in Dublin, but only 40 minutes drive from the airport.

You've to buy where you can afford, same applies everywhere in the world, big cities tend to be more expensive, ironically I didn't want to be in the urban area, but I couldn't afford to buy in my local rural area, so I went with what I could afford at the time.