Glory83 wrote: » Just my 2 cents most jobs affected are in the low to below middle salaries level around $25K a year max 30%. So, those will not have a huge affect on the prices of 300K + decent house. Here in Cork, decent houses go sale agreed in no time. Simply the supply of decent houses is way below the demand esp in Cork. Hence, I don't think we will see much drop in prices there if at all.
Nijmegen wrote: Re the “inappropriate†talk of people doing well, in the context of discussing the property market it’s pretty pertinent! Anyway, we can see it in the data: Despite hundreds of thousands losing income and unemployment up near 30%, income taxes were only down 7.5% in May. There’s lots of people doing ok at the moment.
Nijmegen wrote: Had a viewing on my own property today with several folks interested. One couple have their own house for sale in the past week and got an offer at asking from FTBs, the other viewers were themselves FTBs. EA noticeably more chipper - had been on reduced hours and feeling very glum a few weeks ago, naturally enough. Also spoke with the sales manager for the developer we’re looking to buy off of, about another nearby development of theirs and noticeably more upbeat than a few weeks ago. All anecdotal but alongside the data, gives one hope.
Assetbacked wrote: » I don't really see the FTB market price range too impacted in line with your post. However, a lot of high salaries and bonuses are likely to be affected which could have a sizeable impact on the more expensive houses which were already declining in price pre-covid. For example (someone correct if wrong), €160k salary cut by 20% as well as their 7% bonus usually paid and factored into mortgage borrowing allowance also cut means over 100k less which can be borrowed. That could reduce the price of a €1m house by 10%.
Zenify wrote: » So are we all agreed that the coming recessiom will only affect the low paid?
Oliver Fisher wrote: » "20 per cent of mortgages drawn down in 2018 breached the loan-to-income or the loan-to-value ceilings set by the regulator, close to the maximum permitted." Source: irishtimes.com/business/financial-services/fifth-of-all-mortgages-in-2018-availed-of-rule-exemptions-study-finds-1.3968337 Does anyone have the figure for 2019? With people in the "Saving/Applying for a mortgage 2020 Edition" thread saying that their exemptions got cancelled overnight, if this is an actual trend, how is this not going to impact the (new) housing market? Here is my reasoning: Before COVID: Income of 80k x 3.5 = 280,000 maximum borrowing capacity. This fake couple (or a single person with a high income) gets a 3.9 exemption (nothing unrealistic pre-COVID). They now can borrow up to 312,000. With a deposit of 71.5k, they can buy a house worth 383,500. Let's say they want to buy a new build worth 400k. They can get the HTB grant and get an extra 20k towards their deposit. Happy days, they "only" have to borrow 308,500. Their loan to value ratio is 76.82%, so well above the minimum 70% required to qualify for the HTB scheme. Today (exemptions are gone): Income of 80k x 3.5 = 280,00 maximum borrowing capacity. With a deposit of 71.5k, they can buy a house worth a maximum of 351,500. With the HTB scheme, they can get another 18k so a total of 370k for a new home. Their loan to value ratio is now 74.46%. That's a difference of 30k. My couple says f*ck it, let's save more and ask the family for few grands (after all we keep hearing that people saved so much money during the lock down...). They get another 30k for their deposit so a total of 101.5k. They are happy as larry, thinking they are good to go for their dreamed property worth 400k. Yet, their loan to value ratio is now 63.55%, they don't qualify to the HTP grant anymore. 20k gone. Even with 30k more toward their deposit, they will only be able to get a place worth a maximum of ±380k. Still a difference of 20k pre-COVID. Thoughts?
Zenify wrote: » So are we all agreed that the coming recession will only affect the low paid?
19233974 wrote: » Its actually more than that, I had an exemption with BOI for 4.5x my salary which has been pulled. A friend had got 4.9 x salary with BOI, for me in real terms it has meant the difference of 80k so a huge range of properties eliminated for me.Not to mention they are making it a lot tougher to even get the 3.5x salary. So it is definitely going to have an impact, once the current crop of people with approval/ exemptions complete. i think there will be a decent drop off due to people not having mortgages. What we are seeing now and the next few months will be pent up demand/ approvals getting used up. If it will make a difference to supply vs demand we wont know until next year. Edit: I also think its extremely naive to think only low paid workers will be effected, a bad recession effects everyone. Thats head in the sand stuff
Julissa Bitter Jeep wrote: » 4.5 & 4.9 are very much not the norm when you look at the drawdown stats. Most / the average borrow less than 3.5 per household, so I'd imagine it will have less than an effect as some imagine.
Padre_Pio wrote: » We're going to see a swathe of business closures over the next 30 days, there's not a pub or restaurant that will be profitable with these social distancing rules.
19233974 wrote: » Its actually more than that, I had an exemption with BOI for 4.5x my salary which has been pulled. A friend had got 4.9 x salary with BOI,
TM2015 wrote: » Can I ask, what salaries were these exemptions based on? We have a combined of just over 130k and are hoping for a 4x LTI.
Villa05 wrote: » Demand greater than supply creates a bubble in price and requires government intervention to house an increasing number of people at ever increasing cost because of sourcing solutions from the private sector. This is unsustainable for a state that is highly indebted. At some point the state will have to look at solutions that house people at half the cost of the private market. Continuing on the current trajectory will result on a much greater crash when it happens
wassie wrote: » If you haven't got an exemption already your unlikely to get one in the near future.
schmittel wrote: » Exactly. During lockdown, businesses that are closed can survive on fumes, govt subsidising wages, long fingering rents, rates, taxes etc. As soon as they open and incurring greater costs they'll start hemorrhaging cash and heaps of them will be overwhelmed.
ebayissues wrote: » I got between 4.9/5.2 with KBC at the start of the year.
Oliver Fisher wrote: » "20 per cent of mortgages drawn down in 2018 breached the loan-to-income or the loan-to-value ceilings set by the regulator, close to the maximum permitted." Source: irishtimes.com/business/financial-services/fifth-of-all-mortgages-in-2018-availed-of-rule-exemptions-study-finds-1.3968337 Does anyone have the figure for 2019?
Shelga wrote: » Shouldn't the same rules apply to everyone? Especially when they change the criteria for eligibility as often as the weather changes. Easier to just say no exemptions for anyone, and then ultimately prices wouldn't be as high.
Shelga wrote: » Although I was a bit disappointed when I was told back in February that I wouldn't get an exemption, I'm actually ok with it now, especially if they're being pulled back for everyone. I know it's so disappointing to have the rug pulled from under you if you were told you could borrow 5 times your salary and now you can't, but why should some people get this, and others not? It's much better than in boom times, where they were giving money to anyone who would ask, but even 20% of applicants getting exemptions is distorting the market for the rest of us. Shouldn't the same rules apply to everyone? Especially when they change the criteria for eligibility as often as the weather changes. Easier to just say no exemptions for anyone, and then ultimately prices wouldn't be as high.
TheSheriff wrote: » Let's also hope they don't increase the limits at some point in the near future. Wasn't this idea being put about by some political parties last year. Maddness.
Shelga wrote: » I agree with you to a point, but there is no transparency around how they apply these criteria at the moment. As I said before, my friend received an exemption 2 years ago when she was on less money than I am now, and we are both in secure public sector jobs. I suppose my opinion is really that they should make the process much more clear- why do some get it and others don't? At the moment, it is not fair and see-through.
