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

propertyseeker

It seems odd to me that Irish media try pressure people to buy property when at record high!

Properties that cmae on our radar all seem to be going for all time high prices when checking data. If prices drop media seem to not encourage people to buy but right now they push for purchase and long term debt.

THis does not happen in other countries i lived in.

cnocbui

propertyseeker wrote: »

It seems odd to me that Irish media try pressure people to buy property when at record high!

Properties that cmae on our radar all seem to be going for all time high prices when checking data. If prices drop media seem to not encourage people to buy but right now they push for purchase and long term debt.

THis does not happen in other countries i lived in.

When is the right time to buy property in Ireland?

Australia has been on a more or less constant property price escalator for the past 60 years, with only some minor dips and no crashes, so in pretty much any given year, prices have been at an all time high. Those who put off buying because of the frequent imminent crash predictons - which have never happened - were the mugs.

I personally don't think Irish property prices are out of kilter, compared globally, so I am not at all sure we are seeing a peak. Much as a lot of people don't like the idea, I think further rises are likely for years to come.

growleaves

cnocbui wrote: »

When is the right time to buy property in Ireland?

Well the right time is when you need somewhere to live.

As an investor, the asset firesale of 2011-13 was the best time to buy if you had the means and the patience.

A taxi driver told me there were price drops in the late 80s but I haven't seen any statistics on that.

growleaves

I personally don't think Irish property prices are out of kilter, compared globally, so I am not at all sure we are seeing a peak. Much as a lot of people don't like the idea, I think further rises are likely for years to come.

I agree. The prices seem to be detached from income. MarketWatch recently wrote that "owning a home will become a luxury [in the global economy]".

propertyseeker

growleaves wrote: »

I agree. The prices seem to be detached from income. MarketWatch recently wrote that "owning a home will become a luxury [in the global economy]".

We may see world wide protests and chaos if that happens.
I disagree, prices should stall when interest rates rise.

Bass Reeves

AlmightyCushion wrote: »

No bank will give you a mortgage to do that though.

I do not think you are correct there. The bank may look for an larger deposit, (they tend to do that with apartnents anyway). They may also require that you have enough savings to cover your own rent while the notice period is in place.

L1011

Bass Reeves wrote: »

I do not think you are correct there. The bank may look for an larger deposit, (they tend to do that with apartnents anyway). They may also require that you have enough savings to cover your own rent while the notice period is in place.

You'll only get it on a BTL mortgage, there is no 'buy a BTL and kick out the tenant' product on the market. That comes with all the BTL requirements.

You will be able to either change or refinance that to a normal product afterwards.

Marius34

propertyseeker wrote: »

We may see world wide protests and chaos if that happens.
I disagree, prices should stall when interest rates rise.

Don't think interest rates on it's own would negatively effect property price, at least in nominal value. Interest rates may be increased due to the inflation, and during inflation, property price (nominal) typically goes up.

John1648

Bass Reeves wrote: »

That good investment. ROI is slightly above 8%. If you borrowed 150k the repayments would be sub 850/month. Even assuming drop in rent your should not have to subsidize rental income to cover mortgage. Two year of a tenant in situ is a good option.

People on here complaining about no property available in Dublin. With WFH that apartment was readily available to a single person or young couple buying. It cannot be far from the LUAS.

Thank you Bass Reeves!

I am a cash buyer in fact. The 8 % ROI also sounds appealing to me.

It is just I do not Balbriggan so well.

How does that town seem to you for a longer term investment.

The apartment is in a very good condition, 70 sq.m, a bit of sea view, parking space. Seems better of an option than buy to let in Ballymun or Citywest. The apartment may be appealing for families to rent. The current tenants will be there in any case, but just wondering in the longer run.

It is quite close to airport with all the jobs there etc.

John1648

I have read the latest news on US and EU to agree on uniform increase of corporate taxes globally.

Corroborate that with recent scandalous "news" of Microsoft Dublin branch paying ZERO tax of 400 billion profits in EU.

Can EU force Ireland give up on the current tax rates?

Could that drive US multinationals out of Ireland?

That would lower prices and rents dramatically in Dublin.... a bad news for a small investor....

drogon.

propertyseeker wrote: »

It seems odd to me that Irish media try pressure people to buy property when at record high!

Properties that cmae on our radar all seem to be going for all time high prices when checking data. If prices drop media seem to not encourage people to buy but right now they push for purchase and long term debt.

THis does not happen in other countries i lived in.

I really don't think anyone is pressuring anyone to buy property, simply rents are too high and if the bank will lend you money go for it; as paying a mortgage is certainly going to be cheaper than renting especially in big cities at this point in time.

There will get a point when people can't afford rent and can't afford to buy a house, that is when it will get interesting to see what happens.

Bass Reeves

L1011 wrote: »

You'll only get it on a BTL mortgage, there is no 'buy a BTL and kick out the tenant' product on the market. That comes with all the BTL requirements.

You will be able to either change or refinance that to a normal product afterwards.

So far we have gone through two hoops

That property was not available to anyone other than an investor. It has tenants in situ.

That was incorrect

No bank will give you a mortgage to do that though.

That was incorrect.

And you are incorrect as well. Yes you have to give tenant required notice period. And as I said the mortgage lenders require higher deposits for apartments. In general they still require no higher than normal deposits from investors. The only difference in a BTL is a slightly higher interest rate. 40 years ago when buying a house as the legal process was protracted you had to go on bridging.

That apartment was buyable by single person on a decent income or a couple on below average incomes. Yes it was not straight forward but lenders would be flexible as I have always found. In large urban area there is psychological barriers to moving.

Traditionally people from larger urban area's were shielded from emigration and did not have to move to find work like people from the west f Ireland. I think this creates an issue with urban dwellers. there is no inalienable right to live and work where you grew up or next to your parents

A mortgage company will not give a mortgage on a property with sitting tenants if it is for an owner occupier.

Bass Reeves

bubblypop wrote: »

A mortgage company will not give a mortgage on a property with sitting tenants if it is for an owner occupier.

Yes they will and if they do not all you have to do is ring Joe Duffy with you sob story how these rules are preventing you from buying . That the rules are loading the dice in favour of big bad investors and watch the uproar

Bass Reeves

Bass Reeves wrote: »

Yes they will and if they do not all you have to do is ring Joe Duffy with you sob story how these rules are preventing you from buying . That the rules are loading the dice in favour of big bad investors and watch the uproar

No they will not!
A mortgage company will not give me a mortgage to buy a property unless I'm taking vacant possession.

Ardillaun

Here’s David McWilliams arguing yet again for a site value tax in the IT on Saturday:

..Ireland is the least populated country in western Europe, yet we have among the highest land prices. It’s a stitch-up. It is really that simple. To be sure, there are issues with housing delivery, planning and finance, but the critical issue is not only the cost of land but the perception of that land as an asset. If you treat land as sacrosanct, elevating it above the interests of people, you will get a system that hoards land and exploits people, forcing employees and entrepreneurs to pay over the odds for homes, funnelling more and more money into the pockets of landowners.

...We could fix this with a site value tax, which penalises land that is left unused and encourages development on land. It was first suggested by Henry George in one of the bestselling books ever.

...George suggested a new tax, called a site value tax (SVT). The concept is quite simple. The value of any given site is derived from two components – the land on which it lies and what you decide to build on it. A SVT is a charge on the unimproved value of land – that is, the total value less the value of whatever capital has been built on it.

https://www.irishtimes.com/opinion/david-mcwilliams-tax-unused-land-and-the-housing-market-will-be-sorted-1.4584239?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fopinion%2Fdavid-mcwilliams-tax-unused-land-and-the-housing-market-will-be-sorted-1.4584239

Cyrus

Apple have set their stall out on wfh and its quite firm on the requirement for a more office based than wfh approach.

https://www.irishtimes.com/business/technology/apple-staff-to-return-to-office-three-days-per-week-from-september-1.4583501

drogon.

Cyrus wrote: »

Apple have set their stall out on wfh and its quite firm on the requirement for a more office based than wfh approach.

https://www.irishtimes.com/business/technology/apple-staff-to-return-to-office-three-days-per-week-from-september-1.4583501

There has already been a push back from employees on that, but as with everything it all depends on your role. If you work in customer support or as a coder you can easily work from home; on the other hand R&D folks will certainly have to be in the office to actually get most of their work done.

https://www.theverge.com/2021/6/4/22491629/apple-employees-push-back-return-office-internal-letter-tim-cook

Jmc25

cnocbui wrote: »

I personally don't think Irish property prices are out of kilter, compared globally, so I am not at all sure we are seeing a peak. Much as a lot of people don't like the idea, I think further rises are likely for years to come.

Agree they're in line with what's going on internationally but not so sure about rises for years to come.

The rises since 2013 were never due to a crisis, but due to policy. The policy has been that price increases are good and to be encouraged and hopefully eventually houses will be so expensive that developers might actually build enough of them, and first time buyers can be subsidised to buy them.

I think that mindset is changing within the establishment. The ESRI is encouraging the government to borrow to build houses and also pointing out that millennials are worse of than their parents. "Respectable" columnists and commentators are saying the same thing.

I think the mindset and policies of the establishment on housing are changing. Maybe that's all part of the bigger state coming back into fashion internationally, maybe it's fear of a Sinn Fein Government, maybe it's both. Either way I think genuine action will be taken on housing soon, not the usual tweak here and there that we've seen over the last few years.

Cyrus

drogon. wrote: »

There has already been a push back from employees on that, but as with everything it all depends on your role. If you work in customer support or as a coder you can easily work from home; on the other hand R&D folks will certainly have to be in the office to actually get most of their work done.

https://www.theverge.com/2021/6/4/22491629/apple-employees-push-back-return-office-internal-letter-tim-cook

Let's see how they get on but it gives a decent idea of what employers think makes sense for their business rather than what employees think is good for them.

Cal4567

https://www.businesspost.ie/Planning/councils-collected-less-than-1-of-vacant-site-levies-bb3bacc9

Councils collected less than 1% of vacant site levies
Of more than €21.5 million owed to local authorities across the country, a mere €21,000 was paid last year.

It's getting more and more difficult to even justify the existence of these entities anymore. A dysfunctional housing system but an evermore dysfunctional local government structure.

drogon.

Cyrus wrote: »

Let's see how they get on but it gives a decent idea of what employers think makes sense for their business rather than what employees think is good for them.

Apple is in an odd position too, since it was only few years ago that they finished building their new campus; which cost them $5 billion.

cnocbui

drogon. wrote: »

Apple is in an odd position too, since it was only few years ago that they finished building their new campus; which cost them $5 billion.

...and isn't nearly big enough.

Villa05

Marius34 wrote:

Don't think interest rates on it's own would negatively effect property price, at least in nominal value. Interest rates may be increased due to the inflation, and during inflation, property price (nominal) typically goes up.

If wages kept pace with inflation which would be questionable, workers would be significantly worse off due to the high marginal tax rate on wages

Interest rates would cool the jets of the investment funds also and they dictate price in high demand areas

Villa05

growleaves wrote:

I agree. The prices seem to be detached from income. MarketWatch recently wrote that "owning a home will become a luxury [in the global economy]".

That kind of commentary has 06 written all over it

If owning us the luxury option, how come renting is the far more expensive option

Sustainability!

cnocbui wrote:

I personally don't think Irish property prices are out of kilter, compared globally, so I am not at all sure we are seeing a peak. Much as a lot of people don't like the idea, I think further rises are likely for years to come.

If it's a global issue the crash when it comes will be crashier to borrow a phrase from 08

drogon. wrote:

I really don't think anyone is pressuring anyone to buy property, simply rents are too high

The very definition of pressure

combat14

John1648 wrote: »

I have read the latest news on US and EU to agree on uniform increase of corporate taxes globally.

Corroborate that with recent scandalous "news" of Microsoft Dublin branch paying ZERO tax of 400 billion profits in EU.

Can EU force Ireland give up on the current tax rates?

Could that drive US multinationals out of Ireland?

That would lower prices and rents dramatically in Dublin.... a bad news for a small investor....

ireland can have a 15% tax rate ..
doesnt mean we have to collect it

Villa05

combat14 wrote:

ireland can have a 15% tax rate .. doesnt mean we have to collect it

Good point, but is it an effective minimum rate that is being pushed

combat14

IPAV look for CB to raise mortgage lending limits to 4.5 times salary citing their concern for soaring rents and pension pressures as people wont be able to retire with current high rent/low home ownership model as reasons to massively expand lending for houses .. of course this will only cause house prices to explode here

Earlier this year the Central Bank’s deputy governor Sharon Donnery said an analysis of the mortgage measures showed “house price levels could have been approximately 25pc higher” over the previous 12 months if the rules were not in place.

IPAV's take on massively increasing lending limits:

Under the existing mortgage rules, someone on an average wage of €45,000 can borrow a maximum of €157,500 assuming they already saved 10pc (€17,500) towards a deposit. They can buy a property up to a value of €175,000 — but there are few properties available at this level,” Mr Davitt wrote.

“If the Central Bank enabled those earning up to €28,000+ to borrow four-and-a-half times income, as opposed to the current three-and-a-half times gross salary, a person earning €45,000 could borrow €202,500 and with a salary of €50,000 one could borrow €225,000.”


so lovely .. now the person potentially ends up borrowing an extra 50k to buy the house as prices adjust upwards with new credit in the system... and where does it end they will be back 2 years later looking for 5.5 times salary limits!!

time to fix the real problem .. build more houses, limit immigration or encourage emigration....


https://m.independent.ie/business/personal-finance/property-mortgages/buyers-need-mortgage-rules-tochangeso-they-can-afford-a-homecentral-bank-is-warned-40506651.html

cnocbui

combat14 wrote: »

ireland can have a 15% tax rate ..
doesnt mean we have to collect it

That's fine, just so long as Revenue don't mind my holding back an equivalent percentage of the tax they usually expect me to pay.

theboringfox

combat14 wrote: »

IPAV look for CB to raise mortgage lending limits to 4.5 times salary citing their concern for soaring rents and pension pressures as people wont be able to retire with current high rent/low home ownership model as reasons to massively expand lending for houses .. of course this will only cause house prices to explode here

Earlier this year the Central Bank’s deputy governor Sharon Donnery said an analysis of the mortgage measures showed “house price levels could have been approximately 25pc higher” over the previous 12 months if the rules were not in place.

IPAV's take on massively increasing lending limits:

Under the existing mortgage rules, someone on an average wage of €45,000 can borrow a maximum of €157,500 assuming they already saved 10pc (€17,500) towards a deposit. They can buy a property up to a value of €175,000 — but there are few properties available at this level,” Mr Davitt wrote.

“If the Central Bank enabled those earning up to €28,000+ to borrow four-and-a-half times income, as opposed to the current three-and-a-half times gross salary, a person earning €45,000 could borrow €202,500 and with a salary of €50,000 one could borrow €225,000.”


so lovely .. now the person potentially ends up borrowing an extra 50k to buy the house as prices adjust upwards with new credit in the system... and where does it end they will be back 2 years later looking for 5.5 times salary limits!!

time to fix the real problem .. build more houses, limit immigration or encourage emigration....


https://m.independent.ie/business/personal-finance/property-mortgages/buyers-need-mortgage-rules-tochangeso-they-can-afford-a-homecentral-bank-is-warned-40506651.html

Disgusting behaviour from IPAV. They know full well this would just drive demand and prices higher. Shameless bunch.