Off Topic Thread 4.0

molloyjh · 23-05-2018 12:35pm

Hang on, is it me or are mortgage interest rates in this country not in and around 3% generally? That's pretty low really. Are they not higher than that in the UK? I thought 4-5% was the standard there? I'm not sure what the cost of funds are to the Bank these days, but there probably isn't huge scope to reduce the interest rates at the moment. Sure previous generations were paying rates of up to 18-20%. I don't think we can call 3% high!

Ultimately non-performing loans are on the decrease and aren't just an issue here in Ireland. They are an ongoing issue across the EU. The issue here on terms of house prices is simply supply and demand. And that won't be fixed by throwing people out of their homes. There are far too many issues all combining together to make the current mess, including the States reliance on income from property, the fact that property is seen as an investment (speculation and rental) etc etc.

It's a complex set up and one that is difficult to address, even if the will were there to do so. Imagine managing things to get to a mid-point between the peak and the rock bottom. Then imagine the impact that will have on the States income. How do they then make up the shortfall? More taxes? What about the people who bought property at inflated prices? Do they accept that they are no in negative equity for a prolonged period? What if they need to move? What if they don't? How does that then impact on supply?

23-05-2018 12:43pm

Zzippy wrote: »

Problem is they're flipping good performing mortgages to vulture funds too, who AFAIK have less restrictions on increasing interest rates or how they treat customers.

Whatever terms and conditions you signed with the original lender are the same terms and conditions you have with the vulture fund.

Squidgy Black · 23-05-2018 12:45pm

The property market is also compounded because of an absolutely horrific rental market. Plenty of people opting to live at home and just save like crazy for a mortgage as the price of renting pretty much negates the possibility of any significant saving.

I think there's a couple things that should be done. More restrictions on AirBnb and short term lettings, building of high rise apartments to lower the rental market and make it feasible for people to rent, better infrastructure and public transport from commuter towns, and a review of planning committees. I'm not saying loosen up restrictions and letting developers run loose, but there's often daft rejections for planning made because some aggrieved local comes up with a ridiculous excuse.

One thing the government certainly won't do is try and hit the pockets of the middle class by deflating house prices. This is their main target audience, and they also tend to have either their own or family's hands in developments or property too.

dregin · 23-05-2018 1:08pm

So, according to https://www.irishtimes.com/business/economy/more-than-14-000-in-mortgage-arrears-could-lose-their-homes-1.3456121 30,000 private dweller homes are currently in mortgage arrears in Ireland. If those were all in Dublin and suddenly landed on the market, it still wouldn't be close to enough to deal with the current situation.

Anyone in mortgage arrears on a buy to let, should have it taken off them after a year, imo.

Zzippy · 23-05-2018 1:25pm

Deleted User wrote: »

Whatever terms and conditions you signed with the original lender are the same terms and conditions you have with the vulture fund.

Yes, but if you're on a variable rate, your bank has to be competitive with it's rates so it's not going to jack them up overnight, particularly as it will not do them any favours with the Central Bank or government. AFAIK there are no such restrictions on a vulture fund, who could add a few percent to your interest rate overnight.

dregin · 23-05-2018 1:31pm

Right now variable rates are utterly bananas expensive compared to fixed.

stephen_n · 23-05-2018 1:59pm

sydthebeat wrote: »

.
.

at the end of the day, the price of building a 3 bed semi in Dublin 5 is probably at most 20% more than building a similar 3 bed semi d in ballyhaunis ..... but is valued at approximately 5 times as much. That level of discrepancy for what is basically a starter family home should be completely unacceptable to anyone in this country. A teacher in Coolock is not paid 5 times as much as a teacher in ballyhaunis.

This is something that has to addressed, the building industry claims that the minimum cost for building an apartment, means it can’t sell for any less than €300,000 in central Dublin. This claim is backed up by quantity surveyors (vested interest?). There needs to be an independent cost analysis done for building in this country, so those facts are transparent.

Podge_irl wrote: »

Would it?

Our rate of repossessions is low by international standards. I don't for a second believe that the majority of people in severe arrears on their mortgage would end up homeless if repossession was put in place - not least because of the time it takes to go through.

The homeless figures in this country have risen in direct proportion to repossessions though, so what makes you think one wouldn’t drive the other?

awec wrote: »

A mortgage of 300k that's never going to be paid is worth nothing to a bank. Which is exactly why mortgages are so expensive in Ireland, everyone else has to cover the shortfall.

The cost of the mortgage isn’t the issue, the cost of buying the house is. Interest rates are low, the reason they are slightly higher than they should be is not defaulters, it is banks recouping loses. The notion that you are paying a higher interest rate because of others not paying, is a prime example of the rich telling you it’s poor peoples fault, while they get richer.

stephen_n · 23-05-2018 2:02pm

molloyjh wrote: »

Hang on, is it me or are mortgage interest rates in this country not in and around 3% generally? That's pretty low really. Are they not higher than that in the UK? I thought 4-5% was the standard there? I'm not sure what the cost of funds are to the Bank these days, but there probably isn't huge scope to reduce the interest rates at the moment. Sure previous generations were paying rates of up to 18-20%. I don't think we can call 3% high!

Ultimately non-performing loans are on the decrease and aren't just an issue here in Ireland. They are an ongoing issue across the EU. The issue here on terms of house prices is simply supply and demand. And that won't be fixed by throwing people out of their homes. There are far too many issues all combining together to make the current mess, including the States reliance on income from property, the fact that property is seen as an investment (speculation and rental) etc etc.

It's a complex set up and one that is difficult to address, even if the will were there to do so. Imagine managing things to get to a mid-point between the peak and the rock bottom. Then imagine the impact that will have on the States income. How do they then make up the shortfall? More taxes? What about the people who bought property at inflated prices? Do they accept that they are no in negative equity for a prolonged period? What if they need to move? What if they don't? How does that then impact on supply?

In 1993 myself, my brother and my dad all were made redundant. At that time the interest rate on my parents mortgage was 17.5%, 3% isn’t a high rate by any means.

awec · 23-05-2018 2:04pm

Relative to European interest rates, Irish rates are high. Our rates are like double the euro average. What they were 20 years ago is of little relevance.

Recovering money from non-performing mortgages is part of recovering losses.

Dubinusa · 23-05-2018 2:20pm

High rise apartments buildings would help. Dublin is beginning to sprawl at the expense of the beautiful lands north and south of Dublin. Massive waste of land use when you see all the terraced homes and semi d's.
I'd guess with all the foreign investment in the city, there must be a large influx of workers. Especially around the docks. Why not house these workers in that area. Build up and save the greenspace. It'd be madness to move overseas to Dublin and have to live in DunLaoire or Baldoyle.
Terrible that there is a homeless crisis. There must be lots of unused buildings in Dublin that can be converted into temporary housing?

molloyjh · 23-05-2018 2:21pm

awec wrote: »

Relative to European interest rates, Irish rates are high. Our rates are like double the euro average. What they were 20 years ago is of little relevance.

Recovering money from non-performing mortgages is part of recovering losses.

But what is the cost of funds for the banks in Europe? And what European countries are lower or comparable? If our rates are double the average, and ours are around 3%, then the cost of funds must be very low for banks to be turning a profit on less than 2%.

awec · 23-05-2018 2:26pm

molloyjh wrote: »

But what is the cost of funds for the banks in Europe? And what European countries are lower or comparable? If our rates are double the average, and ours are around 3%, then the cost of funds must be very low for banks to be turning a profit on less than 2%.

Almost all of them. I think we're 4th highest with Poland and Romania ahead of us (can't remember the other one).

Germany etc is like 1.8%.

They turn a profit because a much larger percentage of their loans are performing, and they can take action much faster on non-performing loans. If you work out how much you'll actually pay back for your mortgage it'll make your eyes water, profit is not a problem unless there are significant drags on the balance sheet.

Podge_irl · 23-05-2018 2:39pm

stephen_n wrote: »

The homeless figures in this country have risen in direct proportion to repossessions though, so what makes you think one wouldn’t drive the other?

Because nothing is that simple and correlation does not imply causation.

Unless there is evidence that people are homeless directly because their homes were repossessed then the correlation is meaningless. General economic downturns will likely lead to an increase in both but it doesn't mean one causes the other. I imagine (though do not know) that the homelessness increases are far more to do with cuts to services and/or overburdened services.

You don't get thrown out overnight.

stephen_n · 23-05-2018 5:43pm

Podge_irl wrote: »

Because nothing is that simple and correlation does not imply causation.

Unless there is evidence that people are homeless directly because their homes were repossessed then the correlation is meaningless. General economic downturns will likely lead to an increase in both but it doesn't mean one causes the other. I imagine (though do not know) that the homelessness increases are far more to do with cuts to services and/or overburdened services.

You don't get thrown out overnight.

What do you think happens to families who have their homes repossessed? Do you think they can’t afford to pay a mortgage but will somehow be able to pay rent which is higher. That’s just only being able to see trees and not the forest.

Obviously it’s not the only factor increasing homelessness, increasing rental costs are influencing that too. But it’s mad to think that people being evicted won’t be homeless.

swiwi_ · 23-05-2018 6:15pm

awec wrote: »

Almost all of them. I think we're 4th highest with Poland and Romania ahead of us (can't remember the other one).

Germany etc is like 1.8%.

They turn a profit because a much larger percentage of their loans are performing, and they can take action much faster on non-performing loans. If you work out how much you'll actually pay back for your mortgage it'll make your eyes water, profit is not a problem unless there are significant drags on the balance sheet.

Switzerland is roughly 1.3%

To get a mortgage in Switzerland though you need 20% deposit, and the yearly financing of your mortgage (ie repayment and interest) can't exceed 33% of your income.

Neil3030 · 23-05-2018 6:29pm

Over the course of a 30 year mortgage, you'll repay somewhere in the territory of 4/7ths the purchase price of your home in interest.

Podge_irl · 23-05-2018 8:15pm

stephen_n wrote: »

What do you think happens to families who have their homes repossessed? Do you think they can’t afford to pay a mortgage but will somehow be able to pay rent which is higher. That’s just only being able to see trees and not the forest.

Obviously it’s not the only factor increasing homelessness, increasing rental costs are influencing that too. But it’s mad to think that people being evicted won’t be homeless.

I think if they downsized massively they probably could afford it yes (in a lot of cases anyway, obviously not all). Considering if their home is being repossessed they won't have actually paid their mortgage in quite a while that will help them have stored up some cash too.

It is mad to think that a system won't fall apart if people who don't pay back loans are not somehow penalised for it...

Zzippy · 23-05-2018 9:10pm

Podge_irl wrote: »

I think if they downsized massively they probably could afford it yes (in a lot of cases anyway, obviously not all). Considering if their home is being repossessed they won't have actually paid their mortgage in quite a while that will help them have stored up some cash too.

It is mad to think that a system won't fall apart if people who don't pay back loans are not somehow penalised for it...

No one is saying that, just making the point that evictions do contribute to homelessness. Previous generations and governments had extensive ongoing social housing building projects. This was outsourced during the boom but councils were allowed to take social housing contributions from developers instead of actually increasing social housing stock. As a result, there have been virtually no new social homes built in the last 15 years, or a negligible amount.
The result is there is no safety net for people in financial distress, or people who can never afford a home of their own. The whole problem, private and social, is caused by a lack of supply.

mfceiling · 23-05-2018 9:28pm

Podge_irl wrote: »

Considering if their home is being repossessed they won't have actually paid their mortgage in quite a while that will help them have stored up some cash too.

Not to be smart but I'd say a good number of people who aren't paying their mortgage wouldn't be in the position to be putting away a nest egg on the side!!
It really is mental the amount of money some people have to find every month for their mortgage.

Podge_irl · 23-05-2018 9:42pm

mfceiling wrote: »

Not to be smart but I'd say a good number of people who aren't paying their mortgage wouldn't be in the position to be putting away a nest egg on the side!!
It really is mental the amount of money some people have to find every month for their mortgage.

I was being a bit of a smart ass myself so its fine.

I think a good number of people not paying their mortgage are more than capable of restructuring it with the bank but simply don't bother. Perhaps I am overly harsh - but banks don't want to be repossessing homes and it takes a long time of non-payment and non-engagement to find yourself in that position.

stephen_n · 23-05-2018 9:55pm

Podge_irl wrote: »

I think if they downsized massively they probably could afford it yes (in a lot of cases anyway, obviously not all). Considering if their home is being repossessed they won't have actually paid their mortgage in quite a while that will help them have stored up some cash too.

It is mad to think that a system won't fall apart if people who don't pay back loans are not somehow penalised for it...

Down size to what? Move a family of four into a bedroom in a house? You seem to be under the impression that it’s a choice for people to not pay, that they have the money and just won’t pay it. Where as that might be the case in a small minority, it’s not the reality for most. A lot of these repossessions have been of families who are engaging, who are paying at least in part, but who can’t make full payments. The average rent in Dublin is now 1,800, that’s the equivalent of a 350k mortgage. If they could pay that, they wouldn’t be evicted.

Podge_irl · 23-05-2018 10:07pm

stephen_n wrote: »

Down size to what? Move a family of four into a bedroom in a house? You seem to be under the impression that it’s a choice for people to not pay, that they have the money and just won’t pay it. Where as that might be the case in a small minority, it’s not the reality for most. A lot of these repossessions have been of families who are engaging, who are paying at least in part, but who can’t make full payments. The average rent in Dublin is now 1,800, that’s the equivalent of a 350k mortgage. If they could pay that, they wouldn’t be evicted.

Move further away then maybe.

There is no epidemic of repossessions going on and you will never have a system which has zero. I will admit I have not done sufficient reading on this to be completely sure, but from any court proceedings I have read about I have come away with the impression that those generally being repossessed by court order were not making much attempt to ever pay their mortgage and were years in arrears. Repossessions are a normal part of a mortgage market and are not, in and of themselves, the problem.

Irish Times wrote:

10 per cent of private-dwelling homes still in arrears and 7 per cent, equating to 30,000 cases, classified as being in “deep arrears” where the mortgage has not been paid in over two years.

8,000 homes have been repossessed since the crash. If 30,000 haven't even paid their mortgage in two years I would consider that frankly quite low.

stephen_n · 23-05-2018 10:24pm

Home repossessions up 80pc in 2015 - with an extra 1,500 people declaring themselves homeless across the country

awec · 25-05-2018 11:58am

I have the hangover from hell.

Buer · 25-05-2018 12:17pm

awec wrote: »

I have the hangover from hell.

Little awec is growing up.

I go on the sauce about twice a year at this stage. Just not worth it.

awec · 25-05-2018 12:21pm

I didn't even have a mad night, so I feel a bit short changed.

irishbucsfan · 25-05-2018 12:29pm

awec wrote: »

I didn't even have a mad night, so I feel a bit short changed.

Pretty sure you're entitled to your money back

mfceiling · 25-05-2018 1:12pm

Haven't had a hangover in about 8 years.
Just can't deal with the bursting headaches. I have sinuses and most mornings my nose is blocked and my head is throbbing which replicates all my hangovers!!
My new found love of craft beer doesn't help though with some of them packing a 9 or 10% hit.

25-05-2018 1:17pm

mfceiling wrote: »

Haven't had a hangover in about 8 years.
Just can't deal with the bursting headaches. I have sinuses and most mornings my nose is blocked and my head is throbbing which replicates all my hangovers!!
My new found love of wine doesn't help though with some of them packing a 9 or 10% hit.

FYP!

I like the odd craft here and there, have had exactly 3 hangovers this year which I'm pretty sure equals all of 2017.

Have had the opportunity on a few occasions the last couple of months to sample herbal alternatives and should circumstances change I could easily see my preferences shifting to be honest.

irishbucsfan · 25-05-2018 1:24pm

Disgraceful!

Off Topic Thread 4.0

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