Irish Property Market chat II - *read mod note post #1 before posting*

Villa05

https://www.boards.ie/discussion/comment/120191476#Comment_120191476

It's not a sky is falling in post.

Last year I posted that Europe would surprise and the bloated dollar could see value in Europe when the sky was falling in. As it panned out Europe outperformed US

This is an accommodation thread, our youth can't get accomodation. The post is just to advise them of places where accommodation is available. It's not just cabin crew that are being recruited in Dubai

Timing belt

https://www.boards.ie/discussion/comment/120191715#Comment_120191715

the BOE have a limit of 4.5 LTI on mortgages issued but allow something like 10% of new mortgages be written at higher levels often 6/7 LTI.

if you look at the stats something like 50% of mortgages to FTB’s are at levels above 4.5% with most refinanced mortgages applying the 4.5%

herbalplants

Dubai has a range of attractive roles especially in accountancy. Couple this with free tax and no shortage of accommodation reasonably priced compared to salaries, I am not sure what is holding some young people here to be honest.

AdamD

https://www.boards.ie/discussion/comment/120191987#Comment_120191987

Accountants don't really go to Dubai, they're looked after pretty well here. Teachers on the other hand..

herbalplants

https://www.boards.ie/discussion/comment/120192001#Comment_120192001

Well I am not looking to contradict you, but the ones I know are accountants and yes they get better pay Tax Free!

AdamD

https://www.boards.ie/discussion/comment/120192020#Comment_120192020

I don't doubt there are benefits, but you also have to live in Dubai. I know a handful of accountants over there but still way less popular than Australia, the accounting market in Dublin is very strong though and most return.

The gap in pay/conditions for teachers and nurses is huge though

flexcon

https://www.rte.ie/news/business/2023/0202/1353189-ecb-expected-to-hike-interest-rates-by-further-0-5/

That's it I am done. 4% rates by end of summer, most likely looking at 5% for a new mortgage there after. WTF? 5% on a 500K house means average payments are now 650 a month MORE than in July last year on the same type of house.

Nah I am done. Unforgivable I find myself in this situation.

quokula

https://www.boards.ie/discussion/comment/120191987#Comment_120191987

Sure why would anyone live in any democracy when you can just go live in Dubai and enjoy free accommodation and taxes on the back of slave labourers and the whims of autocrats. The entire population of Europe and North America will drain into the middle east any day now.

fliball123

https://www.boards.ie/discussion/comment/120192207#Comment_120192207

Keep the faith this will stymy demand. The simple fact is it will take a decade of pay rises in order to keep up with the levels of inflation seen in the last 2 years and that is not even taking the hike in interest rates into account. 2023 is going to rough watch the the price of everything flatline for the first 2/3 quarters this year and then head downward at around Q4 of 2023 when rates are at their highest. The price pain in this country for everything is unaffordable for the vast majority. One thing for sure is 2023 will be the year gougers are told where to go if you can wait it out end of 2023/2024 will see prices come down

MacronvFrugals

https://www.boards.ie/discussion/comment/120192332#Comment_120192332

Lagarde has also just said "WE WILL NOT BE AT OUR PEAK IN MARCH.", from my anecodotal viewing of the market prices are at best stagnating and dropping in some places, the idea of rises from here is dillusionary.

Thats without another 1% ish ECB rises.

RichardAnd

https://www.boards.ie/discussion/comment/120192207#Comment_120192207

Well, when the state was burning out the funny-money printing press during the big lockdown, a few people did indeed warn of the severe consequences of such a horrifically irresponsible policy. Sadly, they dragged through the mud by the bought and sold media and a sizable chunk of the population. Who could have imagined that dumping billions(trillions if one considers the rest of Europe) in fiat money into an economy would have consequences.

MacronvFrugals

Didnt take long, AIB raising mortgage rates effective from tomorrow.

lordleitrim

https://www.boards.ie/discussion/comment/120192207#Comment_120192207

I'm sorry that you are in this situation but this is a textbook consequence of how this series of interest rate rises will dampen house price growth Whole cohorts of house hunters who could previously manage the monthly payments on a 500k home are now priced out of such properties as the banks will no longer lend the amounts required to purchase same as the stress tests are further stressed.

This in turn means less interest and bids (and certainly over bids) for such available properties resulting in vendors(especially those who are owner occupiers who need to sell in a hurry as they are moving elsewhere out of necessity) dropping prices to generate interest and closing of sales.

This cascades down to each price bracket (the 400k buyers/300k buyers etc etc) as each cohort has to trade down to what their revised mortgage amount allows.

Will be interesting to see the market in the Autumn after the final tranche of ECB rises has been completed.

My tracker is 200 pm more now compared to last summer also but I'm more than halfway through my 35 year term so I did enjoy almost 15 years of exceptionally low rates so swings and roundabouts....

fliball123

https://www.boards.ie/discussion/comment/120192809#Comment_120192809

Why didnt you fix? I mean the rate rises were highlighted well ahead of time you could of got a near 2% for 5/10 years last year before the first rise?

lordleitrim

https://www.boards.ie/discussion/comment/120192831#Comment_120192831

I thought about it. But with the cost of legal fees and the uncertainty of what rates would be available after the fixed term ended were off-putting to me. I'm also hoping to pay off early a few chunks of the principal over the next few years as well (I never considered this while rated were at 0% but at tracker rate of 0.75 above ECB I'm now at 3.75 and will be 4.25 next month!!). I couldn't pay off early without a breakage fee if I locked myself into a fixed term.

Browney7

https://www.boards.ie/discussion/comment/120192425#Comment_120192425

Looking at the market implied rates (swap curves) the terminal rate looks to be expected at the 3.5% range. The "we will not be at our peak in March" let's things open to a rise in the may meeting or even June. The market looks to be pricing in a .25% rise in March with certainty and a very likely .25% rise after that. Given the ECB have said they will with certainty raise in March, I think 0.25% is a fair guess. The complication to all this is whether core inflation proves sticky for longer which may force the ECB to go higher.

Interestingly the 5 year swap rate dropped by 20bps after today's announcement which would imply the market forecasts rate cuts sooner after the ECB reaches its terminal rate. For the likes of Avant money and Finance Ireland and other non bank lenders I wouldn't envisage any further rate hikes in the next while.

rob316

https://www.boards.ie/discussion/comment/120192919#Comment_120192919

at a margin of .75% you've had basically free money for 15 years, I wouldn't give that up lightly at all. If you could take the pain up to 5% I'd hang in there.

Browney7

https://www.boards.ie/discussion/comment/120192940#Comment_120192940

Is it automatic that once you fix on a tracker that's your tracker gone? Were there not contracts where you could opt to fix for a period and then revert to the tracker margin rate at the end of the fix? It's worth people asking their bank to provide in writing what fixed rates are available and what applies after the fix ends.

fliball123

https://www.boards.ie/discussion/comment/120192929#Comment_120192929

I could be wrong but most of the analysts seem to be predicting a similar .5% in March as well and then it dropping for .25% for the next 2/3 (maybe even 4) increases.

J_1980

5y EUR swap rates are collapsing to 2.72 (from 2.90%) yday.

2y back at 3.14%

dont believe a word Lagarde is saying. Rates will never go up big time. Most of the Eurozone would be bankrupt then.

don't ever sell property or any other hard assets as long as this scam (fiat currency) is around.

ittakestwo

The slowdown/fall has already happened as far as i can see. I went sale agreed in November 2021. There was hardly anything on the market then. I was the third highest bidder but got it as buying for cash. I dont think i would get what I paid for it now despite the CSO saying prices have risen since then.

Much more similar property out there now with no offers and the confidence has gone from market due to the rate rises. The fall has already started.

Browney7

https://www.boards.ie/discussion/comment/120192982#Comment_120192982

Sorry you're correct on the 0.5% - the market does look to have priced in a possibility of this being lower albeit still being the most likely outcome based on Madame Lagarde's comments today. 3.75% looks to be the terminal rate and not 3.5% but I expect there are plenty who believe 4% or 4.25% will be the peak lending rate. Time will tell

fliball123

https://www.boards.ie/discussion/comment/120193045#Comment_120193045

Well you only have to look left and right the UK and US interest rates are both higher I think we may get as far as 4.5% as core inflation will prove sticky in Q1 and Q2 this year.

rob316

https://www.boards.ie/discussion/comment/120192952#Comment_120192952

Gone forever is my understanding

Villa05

https://www.boards.ie/discussion/comment/120192919#Comment_120192919

Your own bank would have given you a deal to get off that tracker. That's very favourable to the borrower not the lender

rob316

Cash buyers will have a field out there soon enough that held out till now.

mcsean2163

https://www.boards.ie/discussion/comment/120192919#Comment_120192919

I fixed for a year....

combat14

https://www.boards.ie/discussion/comment/120193012#Comment_120193012

the slowdown in property is happening right across europe we just havent seen it fully yet as banks have been to slow to pass on the rate rises .. they are now starting to pass on the rises straight away as evidenced with AiB today

legarde today also asked governments to pull the plug on energy supports for families as this was feeding also into inflation .. more interest rates on the way march, may and june the pain for many is only starting with many small businesses starting to close all over the country and many would be house buyers like a previous poster giving up thoughts of buying a typical 500k dublin house at 5% rates the housing market could have cooled a few percent by the autumn we shall see

ApeEvolved

https://www.boards.ie/discussion/comment/120191606#Comment_120191606

Love the last part of this post.

"Nobody can predict the future, but now I will safely predict the future." LOL

Villa05

https://www.boards.ie/discussion/comment/120193375#Comment_120193375

Not to mention that if prices did rise when the Western world is throwing the kitchen sink at dampening demand, that would be alot closer to the sky falling in

Some people just don't get it