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Property Market 2019

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    #4562
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    awec wrote: »
    The deposit rule is to try guard against negative equity to a certain degree. It shouldn't go anywhere.

    Hmm maybe operate it so that factoring in rent payments in lieu of a deposit is allowed only where your rent for the previous X number of months was at least Y% higher than paying the mortgage they are willing to give to you based on your salary, etc. Maybe not even operate it in lieu of a deposit but as a derogation from the requirement to have at least a 10% deposit, e.g. Only 5% deposit is required if you can show you've paid for the previous X months Y% higher than the mortgage you require.


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    #4563
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    SozBbz wrote: »
    Also, I'd argue that DLR is NOT a belweather, its the ultimate outlier. Its the most affluent LA region in the country. Its where things happen first, not an indicator of whats happening nationally. Sure, the national trend tends to follow, but often many years later.

    Large estates take years to build. If you get a sniff of a decline, investors will be skittish.


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    #4564
    lawred2
    Registered Users Posts: 24,281 ✭✭✭✭lawred2


    ZX7R wrote: »
    Unsold stock is mainly a Dublin problem,as with most things it does not really represent the county as a hole .
    That is down to price and price only

    Where is this?

    What type? Commercial or residential?


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    #4565
    awec
    Administrators Posts: 53,384 Admin ✭✭✭✭✭awec


    Assetbacked wrote: »
    Hmm maybe operate it so that factoring in rent payments in lieu of a deposit is allowed only where your rent for the previous X number of months was at least Y% higher than paying the mortgage they are willing to give to you based on your salary, etc. Maybe not even operate it in lieu of a deposit but as a derogation from the requirement to have at least a 10% deposit, e.g. Only 5% deposit is required if you can show you've paid for the previous X months Y% higher than the mortgage you require.

    The 10% is not a question of affordability, so rent payments don't come into it.

    The reason they insist on 10% minimum is so you can absorb a 10% drop in the market and stay in positive equity. If, on the day you got the keys to your new gaff, house prices dropped 10%, you'd be fine.

    5% is really not a lot, so you'd be left very exposed to even slight market changes if you were borrowing 95%.


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    #4566
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    awec wrote: »
    The 10% is not a question of affordability, so rent payments don't come into it.

    The reason they insist on 10% minimum is so you can absorb a 10% drop in the market and stay in positive equity. If, on the day you got the keys to your new gaff, house prices dropped 10%, you'd be fine.

    5% is really not a lot, so you'd be left very exposed to even slight market changes if you were borrowing 95%.

    But that assumes the mere fact the price of the house drops instantly by 10% is necessarily catastrophic to your ability to repay. Is that not a bit extreme? After all, negative equity only matters if you are selling or can't afford the mortgage.


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    #4567
    Mickiemcfist
    Registered Users Posts: 1,585 ✭✭✭Mickiemcfist


    Assetbacked wrote: »
    But that assumes the mere fact the price of the house drops instantly by 10% is necessarily catastrophic to your ability to repay. Is that not a bit extreme? After all, negative equity only matters if you are selling or can't afford the mortgage.

    It means that you have zero fallback should you not be able to repay. I.e. you can't sell up & repay your mortgage.


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    #4568
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    Assetbacked wrote: »
    But that assumes the mere fact the price of the house drops instantly by 10% is necessarily catastrophic to your ability to repay. Is that not a bit extreme? After all, negative equity only matters if you are selling or can't afford the mortgage.

    If your selling up you also have auctioneer fees and solicitor fees. So a drop of <10% would be enough for you not to be able to pay the full mortgage back on resale


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    #4569
    Padre_Pio
    Registered Users Posts: 4,909 ✭✭✭Padre_Pio


    JJJackal wrote: »
    If your selling up you also have auctioneer fees and solicitor fees. So a drop of <10% would be enough for you not to be able to pay the full mortgage back on resale

    But they are already paid by this point. Why would they be included?


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    #4570
    Sweet.Science
    Registered Users Posts: 2,837 ✭✭✭Sweet.Science


    How are all these new builds selling? Not many under 400k in Dublin


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    #4571
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Mickiemcfist wrote: »
    It means that you have zero fallback should you not be able to repay. I.e. you can't sell up & repay your mortgage.

    There are tens of thousands of people from the last time round who bought apartments in Dublin- who are still, even now, in negative equity.

    Its only an issue if you are selling the unit and have to capitalise the equity loss (and most lenders do facilitate bringing negative equity over to subsequent property- if you can prove repayment capacity).

    Its not a massive issue really- though obviously you'll feel poorer if you're in negative equity- but its a paper loss, its not money that you actually have at your disposal.


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    #4572
    Mickiemcfist
    Registered Users Posts: 1,585 ✭✭✭Mickiemcfist


    The_Conductor wrote: »
    There are tens of thousands of people from the last time round who bought apartments in Dublin- who are still, even now, in negative equity.

    Its only an issue if you are selling the unit and have to capitalise the equity loss (and most lenders do facilitate bringing negative equity over to subsequent property- if you can prove repayment capacity).

    Its not a massive issue really- though obviously you'll feel poorer if you're in negative equity- but its a paper loss, its not money that you actually have at your disposal.

    Yea, you're making my point for me. There are still tens of thousands of people from last time round who are still even now, in those apartments, despite having massively outgrown them as a family but banks are not facilitating bringing negative equity over to a subsequent property. I know of 5 families off the top of my head who are in that situation, more people than I know who've had it easier & traded out of it.

    You can argue whatever way you want, but someone buying a property should have skin in the game, banks should be buffered from risks & 10% is not exactly a massive number. The HTB can contribute to it & banks are giving cashback offers, theres ways of doing it.


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    #4573
    Bluefoam
    Registered Users Posts: 7,713 ✭✭✭Bluefoam


    Mickiemcfist wrote: »
    Yea, you're making my point for me. There are still tens of thousands of people from last time round who are still even now, in those apartments, despite having massively outgrown them as a family but banks are not facilitating bringing negative equity over to a subsequent property. I know of 5 families off the top of my head who are in that situation, more people than I know who've had it easier & traded out of it.

    You can argue whatever way you want, but someone buying a property should have skin in the game, banks should be buffered from risks & 10% is not exactly a massive number. The HTB can contribute to it & banks are giving cashback offers, theres ways of doing it.

    I agree & people should also take responsibility for their own financial descision making. The idea that people in negative equity or who have overextended themselves should be helped out is not viable.


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    #4574
    ZX7R
    Registered Users Posts: 3,426 ✭✭✭ZX7R


    lawred2 wrote: »
    Where is this?

    What type? Commercial or residential?

    The article doesn't state witch


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    #4575
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    Padre_Pio wrote: »
    But they are already paid by this point. Why would they be included?

    Because if the bank is selling it or you and the bank have agreed to sell it there are new fees - probably 2-3% of the value of the property

    So I buy a house today with 90% mortgage 10% deposit.

    Tomorrow I decide I cant afford it. I hopefully will sell at 100% but my costs will be 2-3% so I will only get 97-98%.

    If prices dropped overnight by 10%, the bank would have to pay legal...


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    #4576
    alias no.9
    Registered Users Posts: 6,265 ✭✭✭alias no.9


    No matter how inflated the prices may have been, 10+ years of mortgage repayments along with the recovery since 2013 should have eliminated negative equity unless there was arrears or interest only periods.


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    #4577
    Padre_Pio
    Registered Users Posts: 4,909 ✭✭✭Padre_Pio


    JJJackal wrote: »
    Because if the bank is selling it or you and the bank have agreed to sell it there are new fees - probably 2-3% of the value of the property

    So I buy a house today with 90% mortgage 10% deposit.

    Tomorrow I decide I cant afford it. I hopefully will sell at 100% but my costs will be 2-3% so I will only get 97-98%.

    If prices dropped overnight by 10%, the bank would have to pay legal...

    And they would simply pass the charges onto you, leaving you still in debt.


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    #4578
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    i Know people outside dublin who are still in negative equity,
    the mortage is nearly still twice the value of the property.
    Prices in rural area,s have not gone up as much as in citys like dublin.


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    #4579
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    Padre_Pio wrote: »
    And they would simply pass the charges onto you, leaving you still in debt.

    exactly my point :)


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    #4580
    Padre_Pio
    Registered Users Posts: 4,909 ✭✭✭Padre_Pio


    JJJackal wrote: »
    exactly my point :)

    I dont know what point you're making..


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    #4581
    OwlsZat
    Registered Users Posts: 1,510 ✭✭✭OwlsZat


    riclad wrote: »
    i Know people outside dublin who are still in negative equity,
    the mortage is nearly still twice the value of the property.
    Prices in rural area,s have not gone up as much as in citys like dublin.

    Where?


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    #4582
    Horusire
    Registered Users Posts: 158 ✭✭Horusire


    OwlsZat wrote: »
    Where?

    My guess is Longford or possibly certain parts of Cavan.

    Prices in those areas will never rise anywhere near tiger prices in the medium term. IMO


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    #4583
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    OwlsZat wrote: »
    Where?

    There are some developments in Co. Dublin that went for between 400 and 450k back in 2007- that are now barely worth 300k- even after the recovery in prices. Its very location specific- average apartment prices in Dublin are now at 87% of their peak values- however, an average hides a wealth of divergences at both sides of the equation.........


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    #4584
    mariaalice
    Registered Users Posts: 12,370 ✭✭✭✭mariaalice


    The_Conductor wrote: »
    There are some developments in Co. Dublin that went for between 400 and 450k back in 2007- that are now barely worth 300k- even after the recovery in prices. Its very location specific- average apartment prices in Dublin are now at 87% of their peak values- however, an average hides a wealth of divergences at both sides of the equation.........

    But the person who purchased in 2007 has paid a morgage for 12 year so how could hey still be in negative equity?


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    #4585
    appledrop
    Registered Users Posts: 5,792 ✭✭✭appledrop


    alias no.9 wrote: »
    No matter how inflated the prices may have been, 10+ years of mortgage repayments along with the recovery since 2013 should have eliminated negative equity unless there was arrears or interest only periods.

    Your wrong even in Dublin some people still in negative equity During peak boom 2 bed houses near us sold for 400k +. Even with recovery only worth 265 now. Yes if you took 20 year mortgage you might be ok but I know people who got 35 or 40 year mortgages from bank so still in negative equity. Mad but true.


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    #4586
    Arthur Daley
    Registered Users Posts: 4,426 ✭✭✭Arthur Daley


    mariaalice wrote: »
    But the person who purchased in 2007 has paid a morgage for 12 year so how could hey still be in negative equity?

    Well normally yes indeed. Is it too much to ask some of them to pay the mortgage over 12 years before whining about being in negative equity.


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    #4587
    mariaalice
    Registered Users Posts: 12,370 ✭✭✭✭mariaalice


    They will have lost a lot of money but that is different than being in negative equity?.

    They may well only have got to the stage where having paid 12 years of the mortgage the house is now worth what they owe.


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    #4588
    appledrop
    Registered Users Posts: 5,792 ✭✭✭appledrop


    No when you first staying paying off your mortgage nearly all of the money you pay goes off the interest not the actually mortgage money. The longer your mortgage term the worse this is. So if someone took out a 40 year mortgage they wouldn't actually have that much money paid off principal if only 10-12 years in.


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    #4589
    mariaalice
    Registered Users Posts: 12,370 ✭✭✭✭mariaalice


    appledrop wrote: »
    No when you first staying paying off your mortgage nearly all of the money you pay goes off the interest not the actual mortgage money. The longer your mortgage term the worse this is. So if someone took out a 40 year mortgage they wouldn't actually have that much money paid off principal if only 10-12 years in.

    Would there be many who took out a 100% 40-year mortgage in 2007, and after that how many took it out for a 1 or 2 bed appartment and how many took it out for a 3 bed semi.


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    #4590
    Padre_Pio
    Registered Users Posts: 4,909 ✭✭✭Padre_Pio


    mariaalice wrote: »
    Would there be many who took out a 100% 40-year mortgage in 2007, and after that how many took it out for a 1 or 2 bed appartment and how many took it out for a 3 bed semi.

    And how many took it out for properties that were massively overpriced and have not recovered.

    Very very few. So few it's not worth talking about.


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    #4591
    appledrop
    Registered Users Posts: 5,792 ✭✭✭appledrop


    It is worth talking about. Trust me I know as it was people in my age bracket family/ friends/acquaintances
    who all bought around this time + so many in 400k plus bracket on 40 year mortgages as young enough. Really people need to do the maths.


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