Can you afford a home?

TP_CM

Another thing which has changed is people's expectations of what they need to get sorted in their 20s. Previously people were settling down, or houses were on their mind aged 22 or 23 because their 'home home' was either too religious or restrictive or was full to the brim of other kids and the idea of living abroad was too obsurd. Whereas now there's a "I could be anywhere in the next few years" mindset. Even going to Europe on hols back then was fairly exotic, whereas now a lot of 20-something year olds are paying thousands going to South America, Asia, America/Canada. Then in their 30s they're suddenly realising that they want a home and they've no money despite the fact they've been of working age for over a decade.

If a person leaves college now, they're made to believe they've wasted their 20s if they save any money towards a deposit instead of going out to see the world. There's benefits to both, I definitely get the idea of going fruit picking down in Oz for a year or whatever the lads were doing. You keep those memories and that experience with you forever. My own approach was to gamble and do some version of all that travel in my 50s. So I saved for a house from age 21. They've loads of amazing memories from around the world, I have nothing really but late nights in a back office in Dublin. But they're back, living at home, and I've the mortgage half paid off. They'd love what I have now, but they wouldn't trade any of their memories for it.

Tony EH

Jim2007 wrote: »

The need to own ones home is an anglosphere thing. There are millions of people all over Europe how don’t own their own home, will never own their own home and don’t even have such an objective.

While owning one's home is very much a Thatcherite ideal and wasn't as widespread before the 80's, you aren't comparing like with like with regards to renting.

Renting in Ireland is a disastrous enterprise and only done when there's no choice, which for far too many of our people is the case. Nobody in their right mind would actually want to rent long term in this country as it's just not viable. Land lords are charging Manhattan style prices for mickey mouse properties and tenants subjected to 12 month leases that only exist to allow a land lord to up the rent every year. You're never sure where you are going to be living from one year to the next when you rent privately in Ireland. And that's no use at all when you reach a certain age and settling down becomes part of your life. Dicking about here and there in your 20's is fine. In your mid 30's and up, you start thinking seriously about where you are going to live, work, send the kids to school and whole lot of other stuff that requires a stable home.

It's a bloody joke.

In Europe (Spain, France, Germany) I know people from families that never owned their own house/apartment, but have still lived in their HOME for generations. It used to be like that here too for a lot of people. But that was 30 years ago. These days the Irish tenant is at the mercy of a land lord class that's probably the worst of its type in Europe and stuck in the worst type of renting arrangement too.

That's why in Ireland the desire to own one's home is an "objective" that isn't a necessity on the Continent. It's because the alternative is shit.

Creamy Goodness

AlmightyCushion wrote: »

Another person who does a quick search and thinks every thing is grand without actually looking at the data. Properties are going way over asking. If you have 240k to buy, you really need to be looking at places around 210k max to allow for bidding to push the price up.

If you look at 210k and under, you are talking about 100 places in all of Dublin. Of that 100, about 6 are sites that would need a significant amount of money to build something on. A few more are student apartments which you can't actually live in and are only for investment so they are out. A couple more are auctions where the AMV is typically advertised very low so usually go over so they are likely out as well. So, that leaves about 90. Of that 90, a lot of the actual places are not great. One is only a 27m squared studio. A lot would either be in pretty bad areas, are small 1 beds (Some, if not all, banks require a 30% deposit for 1 beds) or ages away from the city centre on public transport.

Yup the asking prices are an absolute sham, PPR is the only real answer.

Adding a data point here; house in my estate is being sold already, original owners bought for €x amount in 2018 (PPR confirmed), it went on daft asking for €x + 105k, it sold for €x + 175k (PPR confirmed). It was sold within 7 days (according to sold sign outside the house) to a cash buyer (confirmed with the seller). Basing anything of asking prices especially in high demand areas is totally missing the real issue.

vixdname

Yes, I can afford my own house, but luck has been good to me over the years.

I originally bought a 3 bed semi with my wife in a small town 10 mins outside Waterford city in 2004.

A year later I sold it with a 70k profit.

I moved further away from Waterford, 25 mins, and bough a 2000 sq ft house on circa .9 of an acre for 33k more then I had sold my little 3 bed semi.

We weathered the storm of the financial crash of 2008 onwards and never went into negative equity.

Now in 2021, my home has just sold leaving me a clear profit of 157k, Im investing in an old house (50s built) in a very nice part of the city suburbs but literally 10 mins by car to the city centre with, as lots of old properties have, a huge garden (.15 acre) with lots of room for an extension.

It needs doing up but I'll hold off until raw materials prices lessen from their current highs and will throw about 100k into modernizing it.

So revamped house, smaller mortgage, house with great excellent growth potential and cash left over.

Try to do any of the above on our salaries in Dublin.....not a chance

Skyrimaddict

Padre_Pio wrote: »

There's your issue then.

Why does a 2 acre site cost 500k?
2 acres of agricultural land costs maybe 25k in Dublin county.

Because the seller knows that if you build 8 houses on it you can make X amount of money.
So the seller prices your potential profit into his sales price.

You take on the risk, the seller profits immediately.

Oh, I agree fully, the price goes up because the seller has something they know is wanted, the land, and the price shoots up. I mean, when I was young we had 2.1 acres of land at the home house, for one house, and while big it wasn't massive.
You're actually dead right, 8 three beds were built on the land, cost of around 300K per unit at the time, nice houses and a few mins out from town, but tight on space. Overall profit on the job was around 280K.

I know myself also, from when the help to buy scheme was ( or is ) running, estate agents and builders very literally just added the extra costs on to the sale price, knowing full well the new homeowner would pay, thinking they got a deal at 5% of the deposit needed.

No one gets into house building for the fun of it, but the price of houses is fueled by ALL OUR greed and then driven by even more greed.
Let's be honest, I bought my house for 180K years back. I have put around 50k into it to make it bigger and nicer. Im in the hole for 230K.
My house value now is around 380K give or take, and if I sell I will want that. That is me looking to maximise my profit, and we all do it the same. But that means for what I got for 230 overall will make me another 150K.

Id love to be noble enough to think I will sell to a nice family and take the basic price, but we wont, we all want to be rewarded for the house we built and loved.
that then means that a new family who my house would be ideal for, now cant afford it !

Yellow_Fern

Padre_Pio wrote: »

There's your issue then.

Why does a 2 acre site cost 500k?
2 acres of agricultural land costs maybe 25k in Dublin county.

Because the seller knows that if you build 8 houses on it you can make X amount of money.
So the seller prices your potential profit into his sales price.

You take on the risk, the seller profits immediately.

The 2 acres are intrinsically more useful than farmland. I am pretty sure the seller is taking on the risk, if the markets turns he wont be able to sell the houses. Now there is a model where the seller would buy the site in an estate and then develop it and its popular in one part of the Netherlands but it is quite unusual.

Mimon

Just about could. Bought 5 years ago just before they started rising sharply.

Even then couldn't afford to buy near work so have to commute 45km.

steddyeddy

jimmycrackcorm wrote: »

Originally we had single-income-wife-at-home purchasers of houses. Then things progressed so for a long time, it was dual-income couples who bought houses. Where did the idea come from, that it should revert to single-income buyers being able to?

I suppose some people would think it doesn't have to be an either or situation. Couples don't deserve it more than singles and vice versa.

Padre_Pio

Skyrimaddict wrote: »

Id love to be noble enough to think I will sell to a nice family and take the basic price, but we wont, we all want to be rewarded for the house we built and loved.
that then means that a new family who my house would be ideal for, now cant afford it !

Thank you for the refreshingly honest response.

This is the core of the issue.

People have been told for 50 years that if you buy a house, it will appreciate and you can retire or pass on the money to your kids.

But we're at a point where buyer can barely afford housing without 3+ years of living at home and saving, and mortgaged to the hilt.

So 80% of properties are for sale in the 200-600k region.

200k because that's around the max your average first time buyer couple can afford.

600k because that's the max that most people in Ireland(even those trading up) can afford.

So 80% of properties, regardless of size, location, age, maintenance etc are in that bracket. It has little to do with the cost of materials or labour. It has everything to do with how much money can be squeezed out of buyers.

It's the same with the example of 2 acres in Drumcondra. Agricultural land is 15k an acre in Dublin. The same land rezoned for residential is worth 250k an acre.

It's like a farmer selling wheat for the same price as a loaf of bread.

jester77

Bought 8 years ago, and only really bought because we were starting a family, so having some extra space and a garden were the major influences. I had been working around 15 years at that stage so had a decent 6 figure deposit available. I thought the house prices were mad at that time, but now the prices are just stupid. Nothing under 700k where I live, and yet people are paying that. Their kids will have to inherit their mortgages.

Yellow_Fern

Tony EH wrote: »

While owning one's home is very much a Thatcherite ideal and wasn't as widespread before the 80's, you aren't comparing like with like with regards to renting.

Renting in Ireland is a disastrous enterprise and only done when there's no choice, which for far too many of our people is the case. Nobody in their right mind would actually want to rent long term in this country as it's just not viable. Land lords are charging Manhattan style prices for mickey mouse properties and tenants subjected to 12 month leases that only exist to allow a land lord to up the rent every year. You're never sure where you are going to be living from one year to the next when you rent privately in Ireland. And that's no use at all when you reach a certain age and settling down becomes part of your life. Dicking about here and there in your 20's is fine. In your mid 30's and up, you start thinking seriously about where you are going to live, work, send the kids to school and whole lot of other stuff that requires a stable home.

It's a bloody joke.

In Europe (Spain, France, Germany) I know people from families that never owned their own house/apartment, but have still lived in their HOME for generations. It used to be like that here too for a lot of people. But that was 30 years ago. These days the Irish tenant is at the mercy of a land lord class that's probably the worst of its type in Europe and stuck in the worst type of renting arrangement too.

That's why in Ireland the desire to own one's home is an "objective" that isn't a necessity on the Continent. It's because the alternative is shit.

Thatcher was right about owning a home. Selling off council housing was always done but is increased a lot in in the 1990s and it gave a great leg up to a lot of working class people. It wasnt a mistake.


I don't agree with your assessment. In any rural area in France or Germany homeownership is a common goal. Its just not reasonable in very expensive cities. It is true that Irish prices have jumped like crazy but that is partially due to our crazy population growth rate

https://data.worldbank.org/indicator/SP.POP.GROW?end=2020&locations=IE-FR-DE&start=1989

fret_wimp2

pgj2015 wrote: »

I have to agree. most landlords are greedy misers who wont even fix your shower if it breaks but still expect you to pay your rent and suck it up.

I must be very lucky. Have lived in 5 rented properties, one was with a live in landlord.

Every one of them was very fair, quick to fix issues and the last one even kept the rent artificially low by quite a bit as she said it was better having good tenants than higher rent but being constantly worried about the place or rent being paid.

No doubt there are some negligent landlords, but my experience says they are in the minority. Perhaps I'm a statistical anomaly.


To the OP, yes i can afford a home in a decent place. Its not my first choice of location or house, but that was out of the price range so i adjusted expectations accordingly.

divillybit

As another poster mentioned, I think people in their early 20's need to very conscious of starting to save for a property as soon as they start their working career... for most it's the age when they have the most disposable income. I had this mindset from my early 20's, as I saw my siblings houses went into negative equity. A book by Derek Braun called Irelands House Party was the best book I ever bought as it got me into the mindset for buying a house and learning about interest rates, negative equity, etc. When I started working in 2008 as the crash was accelerating I wasn't on great money but I did all the overtime I could, and had a good night out every week or two to keep me sane. I bought a new build house in a nice easte in the Midlands in late 2015, by that time I had 80% of the price of the house in savings. Getting a good chunk of money saved in my 20's enabled me to buy my house and I had it paid off by the time I was 33.. Had I gone travelling in my 20's it probably would have set me back buying a place by several years. Alot of my mates went travelling and pricking about, they enjoyed themselves for sure but it set them back alot in terms of their work experience and what they could have saved, and being able to buy a place when property prices were more reasonable. But each to their own.

Burt Renaults

AlmightyCushion wrote: »

Another person who does a quick search and thinks every thing is grand without actually looking at the data. Properties are going way over asking. If you have 240k to buy, you really need to be looking at places around 210k max to allow for bidding to push the price up.

I didn't say everything is grand, just that it's not as bleak as it's sometimes painted. Also, thanks to improved transport and communication, buying outside of Dublin isn't as big a deal as it once was. And this is far from a new phenomenon. Forty years ago, my parents (both Dubs, on decent salaries) were "forced out of Dublin" by house prices.

Physeter

The Mighty Quinn wrote: »

Terrible, awful idea. You'd have people building fire hazard death traps, or people building freezing crap buildings to rent to desperate people.

This wouldn't really be a problem though.

A landlord is smart enough not to invest in some log cabin build that is under minimum square footage as a credible addition to their portfolio. A cabin or bespoke build under minimum square footage can be perfectly safe to live in?

kippy

Jim2007 wrote: »

The need to own ones home is an anglosphere thing. There are millions of people all over Europe how don’t own their own home, will never own their own home and don’t even have such an objective.

How exactly is a housing policy based on requiring people to take on huge debt or rely on social services to put a roof over one’s head a smart idea?

Convincing people that renting is dead money, it brings no utility or satisfaction was brilliant marketing on the side of the building industry. Of course if you really believed in the concept of dead money, there is a lot more pressing expenditure that the concept should apply to.

Actually if people did apply the concept of dead money to all their expenditure, they might be in a better position to own a house.

We live in a country where renting longterm is not an ideal scenario for any number of reasons (unlike some of the countries you may be thinking of) Until that changes its preferable for most to buy.
It's not necessarily dead money, you are paying for a service after all, but that service is not necessarily suitable for everyone at every life stage.
The building 'industry' don't really care of the end owner of the property they are building plans to live in it long term or rent it out long term. It literally makes no odds to them(particularly in the current market) - everyone needs a roof over their head.
The 'rent is dead money' folks are mostly an older generation who had things MUCH tougher than almost anyone of my own generation that I know of and who have a point depending on your standpoint

em_cat

This thread irks me somewhat, I can afford my home and it is mine, not the banks as I’m not mortgaged. I also own outright a small 2 up 2 down that has a small family in it, since 2008, they rented it unfurnished, it truly looks & feels like their home and I don’t charge extortionate rent nor do they want to move so it’s a win win for both of us.

I’ve an an incredibly difficult time finding sympathy for people who are complaining that they are priced out of the Dublin market, it’s like they don’t get the whole supply vs demand and live within your means.

Burt Renaults

em_cat wrote: »

I’ve an an incredibly difficult time finding sympathy for people who are complaining that they are priced out of the Dublin market

I've removed the superfluous part of your post.

We probably need two streams of discussion, one for the Dublin/ Greater Dublin Area, and one for the rest of the country. There are parts of the country where you could get a mortage approval on a single, average-industrial salary. That's as it should be.

I have/had (selling) a home in Dublin based on a swap with a relative who'd retired and wanted to relocate to her homeplace. If it wasn't for that, I couldn't have afforded a house in Dublin in a month of Sundays. Couldn't even afford something on the edge of the city.

Even so, the mortgage repayments at fair value would be cheaper than the rent I was paying on a small flat in the same location.

It's a bit of a sickener. The only people under 40 whom I know, who are living in 3-bed semis are doing so because of similar switches, usually with their own parents. That's no way to organise a community.

The present situation rewards inheritance instead of hard work, which is a recipe for disaster, politically and socially.

In Dublin Bay South, for example, Fine Gael had 2 TDs in the previous Dail term. After the next by-election, there's a real chance of two SF TDs, or at least no FG representatives. That's a reflection of how pissed-off people are becoming, especially those with growing families.

Jim2007

Tony EH wrote: »

That's why in Ireland the desire to own one's home is an "objective" that isn't a necessity on the Continent. It's because the alternative is shit.

And it will remain so, so long as the voter believes that improving and repeating the same failed housing policy is the solution. I have no idea how bad things have to get before people start demanding alternative solutions, but I have a it going to be some time.

em_cat

Burt Renaults wrote: »

I've removed the superfluous part of your post.

IDC, however maybe I should reword it a bit, I have a difficult time finding sympathy for people complaining that they are forced out of the housing market because they can’t afford to buy where they want.

Tony EH

em_cat wrote: »

IDC, however maybe I should reword it a bit, I have a difficult time finding sympathy for people complaining that they are forced out of the housing market because they can’t afford to buy where they want.

It still smacks of "eVeRytHinG wOrKed oUt grAnD foR Me, wHy cAn'T It WoRk ouT for eVerYbOdy elSe"

Jim2007

A Tyrant Named Miltiades! wrote: »

In Dublin Bay South, for example, Fine Gael had 2 TDs in the previous Dail term. After the next by-election, there's a real chance of two SF TDs, or at least no FG representatives. That's a reflection of how pissed-off people are becoming, especially those with growing families.

People are not POed nearly enough. The housing problem in Dublin can’t be solved until the congestion problem is solved. Until people are angry enough to demand stuff is pushed out of Dublin in the country towns there is not going to be any chance of a real solution.

Burt Renaults

em_cat wrote: »

IDC, however maybe I should reword it a bit, I have a difficult time finding sympathy for people complaining that they are forced out of the housing market because they can’t afford to buy where they want.

Maybe you should read the room. Not everybody is in your privileged situation. Especially younger people, starting out, trying to find somewhere to live.

Jim2007

Jim2007 wrote: »

People are not POed nearly enough. The housing problem in Dublin can’t be solved until the congestion problem is solved. Until people are angry enough to demand stuff is pushed out of Dublin in the country towns there is not going to be any chance of a real solution.

No prizes for guessing why the Government is so keen on the proposed right to WFH.

I'm not criticising them for it, they're dead right. Hopefully it might rebalance the housing demand, and take some pressure off Dublin.

em_cat

I know a good few people under 40, they are sensible people, almost all own, most bought on the affordable housing scheme back in 2006/ 2007 almost all own their properties outright as they paid off the mortgages, by living within their means and not spending all their monthly income. Sure some benefited from small inheritance due to a parent passing. I’ve a good friend that was in a council flat, then with Cliud, then went back to council and just recently she bought her own 2 bed apartment in D8. Not to mention she’s a single mum too.

I also know a lot of people that came from wealthy families, got places bought for them so they didn’t have to pay rent during college, most of them never learned how to handle money or the value of a pound and are in debt up to their eyeballs. So back to my original statement, hard to have sympathy for people when they fail to understand very basic economics.

Tony EH

Jim2007 wrote: »

And it will remain so, so long as the voter believes that improving and repeating the same failed housing policy is the solution. I have no idea how bad things have to get before people start demanding alternative solutions, but I have a it going to be some time.

We need more state housing (truly "affordable housing") and tighter controls on our banking sector with regards to unrealistic loans that hock 30 year olds into debt until they're OAPs. Nobody can realistically plan for that nonsense.

Plus, I've heard that banks are looking into multi-generational lending and interested in 100% mortgages again. If that happens we truly are buggered.

As for a voting alternative, who are they? The Shinners? They talk the talk, but can they walk the walk?

em_cat

Tony EH wrote: »

It still smacks of "eVeRytHinG wOrKed oUt grAnD foR Me, wHy cAn'T It WoRk ouT for eVerYbOdy elSe"

Sure I’ll take that & throw in I’ve worked pretty damn hard for what I’ve got, suffered though a recession along with everyone else in the country. Not to mention pay my tax and also give to charity, both in time & money & to boot, never worked in the public sector. So yeah, I’m pretty smug alright.

ExoPolitic

A crash is coming, get set for cheaper property, with nowhere to get a mortgage...

Creamy Goodness

Right so an office cleaner/waiter/bus driver etc. that get minimum wage or just above need to live within their means therefore should buy/rent in Roscommon and commute to Dublin where their job is?

:rolleyes:

Dublin needs housing for all people whether they’re a tech worker or a shop assistant. Even if they don’t grasp “basic economics”