Softening house market?

maninasia

https://www.boards.ie/discussion/comment/119695232#Comment_119695232

That's a huge increase, can't recall ever seeing such a large single increase in terms of mortgage loans...anywhere ever!

I know people who have applied for mortgages recently and got approved, to be honest they are the edge of what I would deem viable in terms of reliably paying the mortgage, I don't think the banks are as strict as they are made out to be here here.

markodaly

https://twitter.com/businessposthq/status/1576844508725223424

Could is not 'it will' and yes, the UK has its own stuff going on but still anything near 40% will be trouble for Ireland given our close economic and banking ties. Again, this is the stuff that destroys sentiment.

Donald Trump

To put 2% into context. If you have an outstanding balance equal to around the average house price (isn't it 400k?) then that means that your loan will be accruing about 8k additional interest a year. So about 150 quid a week. Yes, these effects can be smooted out over a longer period, but that is what is really happening.

Presuming your marginal rate of tax is on the high rate, that means you'd be needing to bump up your salary by about 15k to be back where you were for the mortgage only. (That's ignoring all other day-to-day price rises)

And there are still people posting that interest rate rises will have no effect on prices ...........

Donald Trump

https://www.boards.ie/discussion/comment/119695240#Comment_119695240

You might see a rush from the likes of those people to buy now "while we still can". They will know that once they have bought here, there is huge resistance to allowing the natural consequences apply to anyone who took on more than they could handle

Cyrus

https://www.boards.ie/discussion/comment/119695284#Comment_119695284

If an average house price is 400k then the mortgage will be 320k assuming a 20% deposit, an extra 2% on that over a 30 year mortgage is 345 a month not 600.

fliball123

https://www.boards.ie/discussion/comment/119695342#Comment_119695342

Its still a lot of cash coming out of your after tax cash and the interest rate hikes have only begun, They will easily be up at 4% if not higher by this time next year.

Cyrus

https://www.boards.ie/discussion/comment/119695349#Comment_119695349

I'm not saying otherwise.

monkeybutter

https://www.boards.ie/discussion/comment/119695284#Comment_119695284

who was borrowing assuming borrowing or lending costs would remain static at a historically low number the entirety of the mortgage?

Thats why you had the limits in place to stop people over borrowing like they did in the 2000s

You may be able to fix for 25 years schtateside but not here

kippy

https://www.boards.ie/discussion/comment/119695284#Comment_119695284

Interest rate rises generally push down affordability. If people can't afford something, the price generally goes down - There will of course be exceptions to this as not every person is in the same financial position but increasing the costs of repayments on a mortgage, even if you are paying more in rent, is going to make it more difficult to access that finance.

Mr Hindley

I have a hunch that there's something odd going on with supply on Daft over the last week - after climbing every single week, it seems to have levelled off. It peaked at just fractionally over 20,000 (for all properties, including sites), now back down to 19,800. There's always a bit of a fallback on Mondays, after a late surge on the Friday before, and it's too soon to conclude this fallback is anything more than day to day variability. But it's not quite the consistent climbing we've seen over the last few months.

Will be interesting to see where supply is at in a week's time - if we make it back over 20,000 again.

nullzero

https://www.boards.ie/discussion/comment/119695572#Comment_119695572

Anecdotally I was told by an agent recently that a house was coming up for sale, it never materialized and when I enquired he said that the seller was holding back to see how the market goes over the next few months and perhaps they'll put it up next year.

Another agent recently told me that it's likely to be more of a buyers market over the next month or two which might make people reluctant to sell if they don't absolutely have to.

Ubbquittious

https://www.boards.ie/discussion/comment/119695572#Comment_119695572

The summer is a good time to sell. Especially in rural holiday places, West cork and connemara have seen a good drop in the supply again but other areas still increasing

markodaly

The housing market is now beginning to “cool off”, according to Myhome’s Q3 Property Price Report. It said the asking prices for homes nationally fell by about 1.3 per cent in the third quarter when compared to the previous three-month period. It said this was due to “seasonality” in the market, which typically sees less activity in the late summer months, and demand remains “robust”.\

https://www.irishtimes.com/business/2022/10/03/housing-market-beginning-to-cool-off-myhomeie-says/?utm_source=dlvr.it&utm_medium=twitter

Posted earlier, but I guess its official now.

Give it a few months and can change the title from Softening to 'Deprecating'

dontmindme

https://www.boards.ie/discussion/comment/119694855#Comment_119694855

5.3pc market share

https://www.independent.ie/business/personal-finance/property-mortgages/finance-ireland-doubles-mortgage-lending-as-broker-channel-grows-in-influence-42021621.html

Ozark707

https://www.boards.ie/discussion/comment/119695686#Comment_119695686

Or the rate of increase is decreasing....I think that might have been trotted out before

fliball123

https://www.boards.ie/discussion/comment/119696059#Comment_119696059

Well its stating last quarter asking prices decreased (not the rate of increase decreasing) be interesting to see actual prices data shows

Donald Trump

https://www.boards.ie/discussion/comment/119695342#Comment_119695342

Well to be fair, I didn't say a mortgage on an average priced house. I said a mortgage with a balance around that level. I also said that was the amount of interest that would accrue, not how much the payment would increase after any smoothing. Which is 533 per month in your 320k example.

There would be plenty of people buying houses north of 500k with mortgages of 400k

Sure didn't Mary Lou on the average industrial wage buy a house for 570k and proceed to knock it down and replace it with a mansion!

Donald Trump

https://www.boards.ie/discussion/comment/119695398#Comment_119695398

You can fix for up to 30 years in Ireland since those Avant crowd came in

awec

https://www.boards.ie/discussion/comment/119695572#Comment_119695572

It always starts to cool off at this time of year as nobody really wants to be moving house around Christmas.

rob316

Anyone with a decent lump of cash will be hanging on. The arse can fall out of this market very quick.

All bets are off, rates have rocketed far quicker than expected.

alwald

So an increase of interest rates will result in a decrease of the amount that can borrowed by potential buyers, how an interest rate can affect:

- New builds: high inflation and energy cost will decrease the number of new builds and will probably pause/stop new developments.

- Landlords leaving the rental market: A landlord planning to sell will probably change their mind and continue renting the property

- People in a chain: high interest rates will most likely affect them and will most likely result in them staying put until the rates go down.

I can't really see how the housing market can improve or get better as a result of high interest rates.

DataDude

Still seems to be fairly strong demand for high end houses in walk-in condition.

Those very concerned by exceeding asking price will be horrified by this one. Just the €325k over so far!

https://offr.io/property/1-south-park-drive-foxrock-dublin-18-ireland/4501

markodaly

https://www.boards.ie/discussion/comment/119696430#Comment_119696430

If buyers cannot service a mortgage for a house, then buyers will leave the market.

This has been happening all over the world since interest rates have started to rise.

OEP

https://www.boards.ie/discussion/comment/119696515#Comment_119696515

Having a house to live in instead of renting is a pretty big upside

DataDude

https://www.boards.ie/discussion/comment/119696515#Comment_119696515

Only problem is, while renting, you’re probably paying 7/8% of capital value each year. Even when mortgage rates hit 4/5% over the next few months, renters would still need 2-3% drop in prices every year to justify not pulling the trigger.

So ‘only a 3% rise’ is still a disaster for renters.

Ubbquittious

https://www.boards.ie/discussion/comment/119695620#Comment_119695620

That could be a disaster for some

"I think we're at the peak now"

.. "No I want to hold off till we get to the absolute top of the peak"

Donald Trump

https://www.boards.ie/discussion/comment/119696615#Comment_119696615

Not everyone who buys a house is buying it to move out of a rental to live in it.

theboringfox

I think just a softening market is good. People not rushing into make huge life decisions because fear is it will cost 10% more next year. A market rising low single digits each year is functional. Certainty is better for everyone. I would be shocked if rate rises had no impact on house prices here.

Ubbquittious

https://www.boards.ie/discussion/comment/119697324#Comment_119697324

Not bloody good enough! I want to watch the whole thing crash and burn and loads of investment corps die roaring

OEP

https://www.boards.ie/discussion/comment/119697295#Comment_119697295

I'm well aware of that, but the poster said that there's not much of an upside - I pointed out that there is.