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Property Market 2018

castle2012

With supply still very tight. A homeless problem. Rising employment. It sure looks like where set for more large rises. There's not much to suggest otherwise. Any thoughts?

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[Deleted User]

Like has been mention here before the Central bank is now warning about PCPs being a threat to the banking system.

Many examples of sub-prime lending around PCPs added to the downwards pressure on used car prices thanks to the drop in sterling and rise in imports from the UK.

The Central Bank said the past three years have seen “significant growth” in the stock of car-related debt on Irish banks’ balance sheets, with an increase of 136 per cent to stand at €2.8 billion at the end of 2017.

PCP related finance was the main driver of this growth, accounting for 53 per cent of the increase. The outstanding amount of bank-funded PCP debt has increased 254 per cent over the past three years.

Of note in the data is that PCPs accounted for almost 40 per cent of car finance drawdowns by value during 2017. However, they represented just under a quarter of new car finance contracts.

https://www.irishtimes.com/business/financial-services/central-bank-warns-of-pcp-threat-to-banking-system-as-debts-rise-1.3443108

Cyrus

Rew wrote: »

I tried to exit my fixed rate in 09/10, the break out fees were 25-30k

the way they calc those fees has changed now as well, before it was a free for all :rolleyes:

Rew

Cyrus wrote: »

no but it was the case in that situation, you arent necessarily locked into a fixed rate mortgage, people think you are

I tried to exit my fixed rate in 09/10, the break out fees were 25-30k

Cyrus

draiochtanois wrote: »

This post has been deleted.

no but it was the case in that situation, you arent necessarily locked into a fixed rate mortgage, people think you are

[Deleted User]

Samuel T. Cogley wrote: »

Considering KBC were (and are for a few more days only) offering 10 years at 2.99% I think you're wrong

time will tell

seamus wrote: »

..........

So offering a low fixed rate over a long-term is an indication that the bank does not expect rates in general to rise by an appreciable amount over that period.

Indeed, a fairly simple concept.

draiochtanois

This post has been deleted.

seamus

draiochtanois wrote: »

This post has been deleted.

That's not really correct to say.

Yes they lock in funding, but they also illustrate the bank's confidence in where they expect interbank rates to go.

The bank itself is paying interest on the money that you've borrowed. So if they're willing to lock in rates for you, then they believe that the locked-in rate is going to generate profit for the bank over that fixed life - i.e. that your interest rate is higher than the bank's.

This is why they've been so desperate to get rid of trackers; because the customers were paying less interest on their mortgage than the bank was.

So offering a low fixed rate over a long-term is an indication that the bank does not expect rates in general to rise by an appreciable amount over that period.

Cyrus

draiochtanois wrote: »

This post has been deleted.

really? i changed from a fixed BOI mortgage that i took out late last year to UB to avail of the better rate and there was no break cost :pac:

draiochtanois

This post has been deleted.

Cyrus

Samuel T. Cogley wrote: »

Considering KBC were (and are for a few more days only) offering 10 years at 2.99% I think you're wrong

should i be boasting about my 2.5% over 5 years with UB :cool:

Samuel T. Cogley

Augeo wrote: »

Considering AIB are offering 7 Year Fixed rates of 3.50% (3.44% APRC ) I reckon the much talked about interest rises aren't going to manifest themselves anytime soon.

Considering KBC were (and are for a few more days only) offering 10 years at 2.99% I think you're wrong

[Deleted User]

The_Conductor wrote: »

Wholly aside from borderline cases- Ireland is unique in the Eurozone in having a private sector with so much debt at floating interest rates. There is *no* other country in the Eurozone in this position- none.
As interest rates rise- the private sector- and in particular home-owners on floating interest rates- are going to get slaughtered- there is going to be carnage in the market.
................................

Considering AIB are offering 7 Year Fixed rates of 3.50% (3.44% APRC ) I reckon the much talked about interest rises aren't going to manifest themselves anytime soon.

draiochtanois

This post has been deleted.

Bob24

The_Conductor wrote: »

The prudent thing to do- to try and shelter the great unwashed Joe and Mary public out there- is a scheme to allow them to migrate existing mortgages over to products which are fixed for the entire length of the mortgage- backed by either exchequer borrowing (as in the current scheme) or long term corporate borrowing (some of our bluechip companies have 20 year paper out there- though it may be too late to try and issue more in any great volume).

Couldn’t agree more, it is more than time for our government to realise that much higher interest rates and much lower predictability in repayment amounts compared to most other European countries is a massive threat to the stability of our property market.

But to be fair to civils servants, I am sure many of them understand that already. In the same they understood - as many of us on this forum did - that previous schemes by this government would be conter-productive and tried to push back. But at the end of the day politicians make the decisions, sometime based on short electoral prospects rather than the long term general interest of the country (politicians are not all stupid and many - though not all - also understand the issues with these schemes, but it is a matter of what they prioritise to make decisions).

There is no FG bashing here and I don’t think other credible parties would have done better (many would have done even worse), and I am not in favour of having the country ran but non-elected mandarins, but having said that the way housing/property is being managed is very frustrating!

CalRobert

Wanderer78 wrote: »

I'm a little baffled by this myself, it's been clearly obvious to myself since it's early days of potentially how dangerous the site is, but shur here we are, I suspect this will all eventually blow over anyway, and it ll be business as usual

Sadly I think you're right. Though it's worth noting that if you _must_ use it (I have elderly relatives who seem to have forgotten that email is a thing) doing so in a private window and using mbasic.facebook.com (no javascript) helps.

It's worth checking out Firefox Focus as well.

Wanderer78

sightband wrote:

The only shocking thing about that whole story is the amount of people who didnâ€™t know what the craic was with them.

I'm a little baffled by this myself, it's been clearly obvious to myself since it's early days of potentially how dangerous the site is, but shur here we are, I suspect this will all eventually blow over anyway, and it ll be business as usual

sightband

Wanderer78 wrote: »

I suspect Facebook will be fine eventually, shur who didn't know what the crack is with them

The only shocking thing about that whole story is the amount of people who didn’t know what the craic was with them.

“This app requires access to your email, contacts etc. etc.”....umm okey dokey, no problem, just so long as I get to play this game for 2minutes until I realise it’s shíte.

Wanderer78

UsBus wrote:

Technology stocks are in real danger now, way over priced and with interest rates on the rise, they are on the wrong side of inflation..Throw in the US trade war with China and you could have a right storm...Facebook could be a big catalyst here..not sure they'll recover too quickly..

Add in qe roll down, and we could potentially have a right mess on our hands, I suspect Facebook will be fine eventually, shur who didn't know what the crack is with them

The_Conductor

Bob24 wrote: »

It is a bad scheme in general becsause it is increasing demand whereas the problem is the lack of supply.

But on top of that it is unfair because not everyone can avail of it. If someone who is borderline but can’t avail of it gets priced out of the market by people who can avail of it, I certainly understand that person being pissed-off about it.

Wholly aside from borderline cases- Ireland is unique in the Eurozone in having a private sector with so much debt at floating interest rates. There is *no* other country in the Eurozone in this position- none.
As interest rates rise- the private sector- and in particular home-owners on floating interest rates- are going to get slaughtered- there is going to be carnage in the market.

The prudent thing to do- to try and shelter the great unwashed Joe and Mary public out there- is a scheme to allow them to migrate existing mortgages over to products which are fixed for the entire length of the mortgage- backed by either exchequer borrowing (as in the current scheme) or long term corporate borrowing (some of our bluechip companies have 20 year paper out there- though it may be too late to try and issue more in any great volume).

Deliberately stoking demand among FTBs- when there is not a commensurate increase in stock for them to chase- is a one way recipe for bubble pricing- as we so patently already have.............

Finance obviously signed off on Housing's scheme- despite their misgivings- they shouldn't have- however, the current shower will presumably be somewhere else when the manure hits the fan.

UsBus

Will be interesting to see what happens with property here with signs the stock market is starting to seriously wobble..

Technology stocks are in real danger now, way over priced and with interest rates on the rise, they are on the wrong side of inflation..Throw in the US trade war with China and you could have a right storm...Facebook could be a big catalyst here..not sure they'll recover too quickly..

Bob24

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

It is a bad scheme in general becsause it is increasing demand whereas the problem is the lack of supply.

But on top of that it is unfair because not everyone can avail of it. If someone who is borderline but can’t avail of it gets priced out of the market by people who can avail of it, I certainly understand that person being pissed-off about it.

cruizer101

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

I think it is a bad scheme whether or not I could avail.
I was actually due a pay increase just after it was announced and my boss offered to pay slightly less so I could avail of it and to try arrange something else with the excess (expenses or something like that), but I decided against.

It is bad because it applies a different set of rules to those who are eligible, they can get a mortgage for an amount higher than the banks are allowed offer, higher than the central banks own rules.
It is bad because it does little to nothing to actually increase supply which is what is really needed to solve the crisis, let the banks take care of supplying credit guided by the rules of the central bank and let the government try resolve the supply issue.
The fact that the department of finance advised against it also shows how bad a scheme it is.

So no it is not ridiculous because I can't avail of it it is ridiculous on its own merits.

All that said I've no issue with people availing of it, if the product is there take it, I would certainly consider it if I could but that doesn't mean I think it is sensible for the country as a whole.

kippy

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

Of course and the fact he is directly competing with those who can.

aloooof

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

The issue is a supply issue. This scheme only serves to increase demand.

I have friends who intend to use this scheme, and will count themselves lucky if they can, as they are aware it's far from fair.

TheMilkyPirate

cruizer101 wrote: »

It annoys me a lot as we are just above the limit as a couple so directly competing with those who are able to avail of it.
Its a ridiculous scheme really.

Ridiculous because you can't avail of it.

cruizer101

It annoys me a lot as we are just above the limit as a couple so directly competing with those who are able to avail of it.
Its a ridiculous scheme really.

keane2097

Murphy doesn't really give the impression of a guy in touch with the needs of the unwashed masses does he.

LookingFor

"Dept of Finance warned against Govt-backed first-time buyer scheme"

https://www.rte.ie/news/ireland/2018/0322/949242-first-time-buyer-scheme/

The two finance departments also said they believed the Rebuilding Ireland Home Loan would be subject to the Central Bank's Loan to Income rules.

The documents show that in a lengthy response the Department of Housing argued that "as the interest rate is to be fixed over the full life of the loan, thereby limiting borrowers exposure to interest rate rises, it is not necessary to apply the Central Bank Loan to Income regulations to the scheme".

So the department of finance raised most of the concerns we raised here earlier, including the lack of the same loan to income limits as applies in the private market.

But the department of housing ignored them - and completely ignored how unfair it would be for other buyers to have to compete with buyers playing with different Loan to Income rules, the potential upward pressure on prices etc.

For what it's worth, I wrote to Varadkar about this, and he referred the letter on to Eoghan Murphy. Murphy wrote back with just a copy and paste of the promotional blurb for the scheme and completely ignored my specific questions about the unfairness of the loan to income limits in this scheme vs the private market. Dunno how they can do this with a straight face.

Bob24

Graham wrote: »

Or it would indicate the rent caps are starting to bite. Good for current tenants, for everyone else, expect limited new rental properties and dwindling rental stock to follow.

I don’t know ... if it was rent caps starting to work, the effect wouldn’t be restricted to core Dublin areas and would effect all the RPZs (also the figures are only for new tenencies whereby avoiding caps is renpant).

I think we might be reaching affordability limits for very high demand areas and rises there will keep happening but more in line with the rise of spending power.

I mean in Grand Canal Dock which I know well you have 1 beds renting for over 2k and 2 beds for over 3k. Not sure about the one beds, but just before the 2008 crash, these same 2 beds would have been 2k at most (30% cheaper) and at the time they were brand new and all shiny whereas now while still very nice apartments they are 10-15 years old.

Graham

Bob24 wrote: »

This would tend to indicate we are approaching the maximum acceptability point in the most desirable areas, and people are moving further away to find something within their budget.

Or it would indicate the rent caps are starting to bite. Good for current tenants, for everyone else, expect limited new rental properties and dwindling rental stock to follow.