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Softening house market?



  • Registered Users Posts: 19,505 ✭✭✭✭Donald Trump

    It's not relevant for the thread so I don't want to get into it. But just to let you know that your misunderstanding of a merit bar is well off. You can google it. If you want to know more start a thread over on the teaching/lecturing forum and I can explain it to you there if I see it.

  • Registered Users Posts: 18,540 ✭✭✭✭Bass Reeves

    Its not an extreme question. It the only question. The answer is we cannot. If we physically cannot get to that number or within an asses roar of of it then the next most important thing is to get as much build as possible.

    But there is a theory by some here that a massive reset will solve the problem. The reality is it will only make things worse. The most important thing is to keep building houses.

    There is already an indication that there is a potential slowdown in house building. That will be a disaster. The biggest problem is we are building BMW's when people want Toyota's and VW's and some would be happy with a Fiat.

    Carbon tax is adding to building costs every year and will continue to not just directly in price of concrete but also on the fuel tradespeople get to work in, or in the building supplies that have to be delivered.

    Dublin has a peculiar problem it's similar to every major capital city, a shortage of building workers. They will only go to work there as long as they get a premium over working nearer home. If you can solve that problem you are an economic genius.

    But thinking that removing HTB will reduce new houses by 30k it give FTB is deluded or that 4X loans are the issue. If the council's build houses rather than buying them there will be less supply not more. HAP has not materially changed since 2016 there is just more people availing of it.

    There is no silver bullet, there is Lone Ranger riding to the rescue. Government can do very little except try to keep houses being build.

    Slava Ukrainii

  • Registered Users Posts: 1,786 ✭✭✭DownByTheGarden

    Ive an apartment ready to sell. All advice I have got is to put it on the market in March. We were worried about some new legislation appearing to stop us selling it, but we have decided to wait til the end of Feb to put it one the market as most buyers take a break from looking for Nov, Dec and Jan and Feb. I know we did too when we were looking to buy. Its just not a good time to be trying to find somewhere to live. Supply is down, its dark when you get off work to go looking, everything just looks depressing anyway etc. Its just a miserable time to be traipsing around looking at houses.

  • Registered Users Posts: 1,786 ✭✭✭DownByTheGarden

    I think at this point the attitude of the government is. Lets just pretend we are doing something here. No point in improving the situation only for SF to come in ion a couple of years and benefit form any progress that we do make. So lets make things as bad as possible for them when they do get in.

  • Registered Users Posts: 7,450 ✭✭✭fliball123

    That is not entirely true. The gov are both buying and renting properties so actively competing with anyone working and doing things the right way forcing prices up and also giving HAP along with the supports for FTBs this puts a floor under the market. This does not even bring into the equation the lending rules it was blatant this year at a time of higher interest rates and every other cost of living factor going up higher that they upped this to 4 times the salary. The question you should be asking is why now? The obvious answer is its to allow FTBs more debt to buy which is the wrong approach. If we withdrew all supports it would be political suicide but, both rent and property prices would drop.

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  • Registered Users Posts: 7,450 ✭✭✭fliball123

    I wonder if someone clever there is also factoring in the increase in blocks for new builds which will cause the construction costs to go up and will probably increase property prices with the levy coming in shortly after March (I think). I would be wary of taking any ones advice to be honest. Prices for housing like most other aspects of life is just too expensive now and a lot of people that were on the demand side will be leaving for pastures new. The amount of people who I work with and would yap to on a constant basis point to their holiers in Spain where they can get cheaper food and beer and accommodation and when they are back in Ireland the lot is unaffordable. Good luck with what ever you do. If it was my place I would have it up ASAP.

  • Registered Users Posts: 18,540 ✭✭✭✭Bass Reeves

    The 4X lending rules is on the lower side of mortgage lending rules across Europe. 3.5X was the lowest in Europe and I think it for only used elsewhere for certain borrower's ( expats). The UK is 4.5.

    I will repeat again because people seem to not understand, HAP has NOT INCREASED since 2016 except for minor tweaks. If HAP is withdrawn we would see mass evictions so no political party will do that

    Pulling supports such as HTB is more likely to cause builders to reduce output than it is to reduce prices. If you think that risk is acceptable then so be it. However I would be reluctant to.

    It took us until 2016 to restart building, it to 6 years to get from 6-7k units a year to 25k. If supply cranks down will it crank up again.

    Slava Ukrainii

  • Registered Users Posts: 7,450 ✭✭✭fliball123

    The lending rules are on the lower side, yet the question still has to be asked why this decision was made when it was made. They could of done it 4/5 years ago and to do it at a time of such high inflation and such a limited supply of housing is IMO very tactically from the powers that be.. Even if HAP has not increased its still a large wedge of cash that someone has to put towards rent if that was taken away tomorrow then rent prices would have to readjust but I agree no political party would do it as pointed out it would be political suicide. With regards to pulling the HTB we really need these modular homes coming on stream and quickly to quell demand and anyone who is on HAP and looking for social housing should be housed in one of these and then the reliance on builders building is gone.

  • Registered Users Posts: 19,505 ✭✭✭✭Donald Trump

    As regards lending limits, one would not expect that the same multiplier would be appropriate for every country. There will be different taxes and living expenses and laws in each jurisdiction. Other countries might not, as happened here, change or relax rules in order to protect non-paying mortgage holders and prevent firesales from bottoming out the market in a more disorderly manner.

    It is likely that in other countries you won't be seeing current cases in the courts about people being allowed to keep their houses that they stopped paying for 12 or 15 years ago.

  • Registered Users Posts: 1,527 ✭✭✭kaymin

    You're scaremongering. You wouldn't see mass evictions as evictions are banned and such a ban could be extended. Given 40% of tenants receive some form of HAP support most would either have to accept the reduction or have their property lie empty

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  • Registered Users Posts: 18,540 ✭✭✭✭Bass Reeves

    No I am not if government stopped or reduced HAP by 20-50% a lot of HAP tenants would be unable to pay there rent.

    Non payment of rent is a reason for eviction during this eviction ban. As people would be evicted with present climate and LL's wanting to exit the business then evictions would be whole sale

    Slava Ukrainii

  • Registered Users Posts: 1,786 ✭✭✭DownByTheGarden

    To be honest all ive ever seen in the housing market is that supply goes down after october and increases in March. So im just going to play the game and see what happens. The more people looking, the more interest. But then i guess there will probably be more properties on the market at that time too. It could backfire, but sure it couldnt backfire anymore than it has already after i rented it out.

  • Registered Users Posts: 2,213 ✭✭✭combat14

    meanwhile the ECB do their bit to cool inflation, economy and housing markets - rising interest rates during recession

    just timely reminder not to over borrow

    ECB might raise interest rates at current pace for a while - de Guindos

    "Increases of 50 basis points may become the new norm in the near term," he said.

    "If we do nothing, the situation would be worse because inflation is one of the factors behind the current recession," he added.

  • Registered Users Posts: 192 ✭✭IWW2900

    People still dont see whats coming and you have given some good advice there.

    We have had a long era where it payed to have as much debt as possible. E.g. you could buy a house for basically free money, sit there are watch the house go up in value.

    This has run its course, now it will be the opposite. Anyone who has debt will be a slave to the system. Slaving away for a depreciating asset, paying large sums to the creditor.

    Once people realize, it will only create further downward pressure on the market.

  • Registered Users Posts: 14,498 ✭✭✭✭Dav010

    Just to be clear, are you under the impression that sensible people thought the value of their property could only rise, and that interest rates were always going to be at historic lows? Rather than looking at interest rate rises as being some unexpected, monumental assault on people’s sensibilities, most understand that we were extremely lucky to benefit from such low rates for so long, now the mortgage rates are rising again to normal levels.

    People see, and feel change, but the same conditions do not exist now as they did in 2008 and most are not as frightened as you are.

  • Registered Users Posts: 20,047 ✭✭✭✭Cyrus

    you accuse people of being naive but the simplicity of the thinking in your posts is astounding.

  • Registered Users Posts: 2,957 ✭✭✭cute geoge

    So are you trying to say young families who need somewhere to live are better off paying out the same if not more to rent property as appossed to be paying off a mortage be it over 35 years .Anyone working does not have too much time to be worrying about depreciation on a home once they can afford the mortage every month that is all that matters to them and like I have said all along 'RENTING IS DEAD MONEY'

  • Registered Users Posts: 7,450 ✭✭✭fliball123

    So is interest on a mortgage and that is only going one way.

  • Registered Users Posts: 6,679 ✭✭✭Allinall

    Until it starts going the other way, of course.

  • Registered Users Posts: 1,609 ✭✭✭Tonesjones

    Apart from the drop in 2008 when have house proces dropped in value?

    House prices only go one direction. Blips here and there are inevitable bur short lived and do not set the trend

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  • Registered Users Posts: 7,450 ✭✭✭fliball123

    When will that be? 2023 we are going to see more increases.

  • Registered Users Posts: 6,679 ✭✭✭Allinall

    Could be 2024, or 2025, or 2026. Who knows?

    One thing is fairly certain. They will definitely come down.

    Interest rate movements are cyclical, and I don't see any evidence that that is going to change.

  • Registered Users Posts: 949 ✭✭✭Ozark707

    One of the differences this time is that The ECB will be raising rates as we go into downturn/recession. At least the last time the were able to cut rates.

  • Registered Users Posts: 7,450 ✭✭✭fliball123

    yeap this scenario is very unique in a lot of aspects and the usual high job losses have yet to ramp up either , so anyone saying they know what will happen by looking at historical trends have SFA to go on.

  • Registered Users Posts: 97 ✭✭DRedSky

    They have gone up repeatedly in huge chunks lately, 0.5 and 0.75 and 0.75 again etc, people have bizarrely talked about them “slowing” to 0.5 again lately but 0.5 is a massive increase.

    All the noise from Lagarde and co suggests they will continue to go up for some time.

    So……. Let’s say you’re right and they come down somewhat again, they are not coming down to anything even remotely close to the level from which they rose.

    Not even close.

    That era is over.

  • Registered Users Posts: 6,679 ✭✭✭Allinall

    How do you know that?

    15 years ago no one had heard of negative interest rates.

  • Registered Users Posts: 97 ✭✭DRedSky

    The answer is in the question.

    it doesn’t typically happen. It is being corrected now. And quite fast and aggressively.

  • Registered Users Posts: 18,540 ✭✭✭✭Bass Reeves

    Along with that when you move fr negative 0.5% to 0% it actually like a rate cut to many businesses that have very low debt levels as businesses were paying a levy on lodged money because it was costing banks lodge it.

    It may well have been similar going onto 0.5% with some businesses still really only being back to where they started . Therefore in reality for some business all they have seen is a 1.5% raise in rates

    Slava Ukrainii

  • Registered Users Posts: 3,213 ✭✭✭Mic 1972

    House prices havent gone down in the last 3 years, considering all that has happened to global economy

    Everybody predicted a collapse but we are still here wondering when and if that will ever happen

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  • Registered Users Posts: 192 ✭✭IWW2900

    You still dont get it. Rates are all that matters, its been propping up everything.

    Now it will reverse.

    Do some thinking before posting.

This discussion has been closed.