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Property Market 2020

Bigmac1euro

Maybe an article for “Property Market 2020”
Anyhow looks like developers are going to start strangling supply in order to keep prices in check.

Worth a read anyway.

https://www.independent.ie/business/personal-finance/property-mortgages/developers-now-fear-flooding-market-as-house-prices-in-decline-38820967.html

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guyfawkes5

If banks do tighten lending criteria significantly (I don't consider checks for the Covid-19 subsidy to be overly tight criteria), then this would push houses prices down very sharply. You'd then have a similar rebound in a year or two once the rules are loosened back up, as there would be a glut of people restrained from buying entering the market at the same time.

I would hope if it looks like this is going to happen, the government intervenes to prevent another boom and bust housing cycle as it really is unique to Ireland and would exacerbate a lot of social problems we have if we create another 'lost generation' looking for their first house.

Cyrus

errlloyd wrote: »

I think this is also an admission by AIB they're expecting a widespread price drop. No point on allowing someone to borrow against a home you think will crash in price.

i wouldnt read that into it,

they are being prudent in their lending, someone in an unstable work situation doesnt get a new mortgage,

good sense for once and hopefully it continues, its banking like this that will keep a lid on house prices.

awec

errlloyd wrote: »

I think this is also an admission by AIB they're expecting a widespread price drop. No point on allowing someone to borrow against a home you think will crash in price.

It's an admission that they think there'll be people who can't afford to pay mortgages. Borrowing against a property that falls in value by itself is not much of an issue once the mortgage is still serviced.

Banks tightening their belts is inevitable. It has been discussed on here since this crisis began. The rest of the banks will follow.

There will be lots of people who thought they'd be buying their house in the next year or two who now won't be, and this will not be limited to people who suffer unemployment or salary cuts.

If prices do fall significantly there will be a lot of people watching from the sidelines as the housing market remains out of reach for them as they do not fit the risk profile the banks are looking for.

errlloyd

I think this is also an admission by AIB they're expecting a widespread price drop. No point on allowing someone to borrow against a home you think will crash in price.

fliball123

Billythekid19 wrote: »

My point is that Joe Bloggs applying for a modest 200k mortgage this year has the same chance of losing his job as Billy Big Bollocks that drew down a 500k mortgage last year.

Well going on your premise here the banks would not of known the risks last year they do now and should act on the information they have. So regardless of both having the same level of risk of losing their job now, the fact is one has the mortgage and the bank cant do anything to reduce the risk and the other has not and the bank can do something about that, as in not give out the loan and it would be prudent to stop Joe Bloggs getting the loan as they are already at risk due to Big Bollocks loan. I know it may seem harsh on Joe but it means that Jim, Bill, Bob and the rest of the millions of tax payers in the country are not asked to bailout the banks again to the tune of billions.

8-10

ebayissues wrote: »

Quite astonishing the amount of people who were on the scheme and went ahead with purchases.

What was the amount?

amacca

Billythekid19 wrote: »

My point is that Joe Bloggs applying for a modest 200k mortgage this year has the same chance of losing his job as Billy Big Bollocks that drew down a 500k mortgage last year.

I'd be of the opinion that Mr large scrotum was fortunate with his timing (if that's what he wants and he's happy with purchase) and at that time last year it looked like he could service the debt )or else bank wouldn't have lent to him
Mr Joseph bloggs esq however is perhaps unfortunate with the timing but definitely not discriminated against as the economic situation has changed in the meantime...
.
Thems the breaks so to speak, he is not being discriminated against or treated unfairly imo. Except perhaps by fate itself

Billythekid19

Augeo wrote: »

You reckon folk are covered against job loss?
Seriously.

what sort of policy are you referring to?
Mandatory mortgage protection pays out when there's death.

My point is that Joe Bloggs applying for a modest 200k mortgage this year has the same chance of losing his job as Billy Big Bollocks that drew down a 500k mortgage last year.

kippy

ebayissues wrote: »

I have sad this before and I'll say it again. Anyone in receipt of the cov-id payment scheme shouldnt be allowed to drawdown on a mortgage.

If you're in rceipt and you came off it, the banks should wait till 6 months to exmine your situation.

Its simple as that.. What happpens if thing go south quickly? Who foots the bill... certainly not you

Harsh but it hs to be done

Quite astonishing the amount of people who were on the scheme and went ahead with purchases.

Look. The reality is simple here. People who are in edgy situations (that is, have approval to buy but who face into uncertain times ahead) would have been daft not to try get the deal over the line ASAP.
Once you have a house, it is extremely difficult to lose it in this country (be that right or wrong).
The alternative is not buying. Paying extortionate rents, eating up savings, having to engage with DEASP for support and all the means testing that brings etc etc
These all the more compounded by the other variables involved.

fliball123

Water2626262 wrote: »

AIB are being totally unfair. They should let these at risk people draw down mortgages, have sleepless nights, huge anxiety of letters coming through the door, destroy their credit ratings and endure god knows what other stresses you have when you lose income.

You can only have so many payment breaks before the maths doesn’t work anymore and the mortgage is unsustainable.

Also what if someone loses their job and the location of their new employer makes being stuck with the house an absolute nightmare.

It’s very frustrating but if I was off work for a few months I don’t think I’d be charging ahead with taking on a huge amount of debt. Covid is still very much an issue too. Can anyone really say we won’t have a second lockdown? Might be unlikely but who really knows. Nobody even in feb could have predicted how this year has turned out so far.

Are you kidding no way not while the culture in the country is like the 11th commandment thou shall not repossess , this is the main reason why interest rates are so high as the risk to a bank lending is off the charts as it is near impossible for a bank to repossess a family home if the owner decides to stop paying. The AIB are being prudent and I hope the rest of the banks do the same the tax payers should not be on the hook for someone else's house I have no bother for everyone being entitled to shelter but there are people on the housing list who want to live in very high profile areas in the Dublin while those working have to buy in surrounding counties and commuting 2 odd hours to work to pay for this. There needs to be a complete C change with the welfare state in this country if you cant afford the house you should not be allowed stay in it without paying. You should be moved to a different area where you can be housed for less by the state

Water2626262

AIB are being totally unfair. They should let these at risk people draw down mortgages, have sleepless nights, huge anxiety of letters coming through the door, destroy their credit ratings and endure god knows what other stresses you have when you lose income.

You can only have so many payment breaks before the maths doesn’t work anymore and the mortgage is unsustainable.

Also what if someone loses their job and the location of their new employer makes being stuck with the house an absolute nightmare.

It’s very frustrating but if I was off work for a few months I don’t think I’d be charging ahead with taking on a huge amount of debt. Covid is still very much an issue too. Can anyone really say we won’t have a second lockdown? Might be unlikely but who really knows. Nobody even in feb could have predicted how this year has turned out so far.

[Deleted User]

Billythekid19 wrote: »

A lot of people would be paying dead rent if they had not drawn down mortgages in recent months. Its madness pissing away a high proportion of your income on rent to a vulture fund, which would have been the case for many years.. People have mortgage and income protection for a reason.

You reckon folk are covered against job loss?
Seriously.

Billythekid19 wrote: »

............I guess people have mortgage protection for a reason...........

what sort of policy are you referring to?
Mandatory mortgage protection pays out when there's death.

Villa05

nerrad01 wrote:

yea as crap as this is, its preferable to the opposite of throwing out money to people without jobs for mortgages. That will not fix any of the fundamental problems with the housing market and and it will tell a lot about any minister who starts advocating for this instead of actually correcting some of the fundamental problems

FF got the housing portfolio ministry. Just before the election which was pre covid of course Michael Martin was criticising the central bank for there mortgage lending rules

It will be interesting to see how they approach it and if the central bank will stand firm

ebayissues wrote:

Quite astonishing the amount of people who were on the scheme and went ahead with purchases.

Did they? Mortgage approval and drawdown are very different processes. I would have thought that any approval pre covid would be thoroughly reviewed if the applicants were on a covid payment

cnocbui

brisan wrote: »

300,000 people employed in the public sector ,so about 12%

It was 14.9% in 2017, according to the OECD: http://www.oecd.org/gov/gov-at-a-glance-2019-ireland.pdf

christin

IPA stats: "In 2018 the numbers employed in the public service rose to over 323,000, back above what it was in 2008.
• As the economy has grown, the proportion of the workforce working in the public sector has fallen, and is currently just below 15 per cent."

Billythekid19

ebayissues wrote: »

I have sad this before and I'll say it again. Anyone in receipt of the cov-id payment scheme shouldnt be allowed to drawdown on a mortgage.

If you're in rceipt and you came off it, the banks should wait till 6 months to exmine your situation.

Its simple as that.. What happpens if thing go south quickly? Who foots the bill... certainly not you

Harsh but it hs to be done

Quite astonishing the amount of people who were on the scheme and went ahead with purchases.

But what about the other hundreds of thousands of mortgage holders who were given mortgages pre covid and now find themselves on state support? I guess people have mortgage protection for a reason. I agree AIB has to be prudent, and they must tighten their belts like everyone else. But my issue is why should someone say in the unfortunate position to be house hunting now +on covid payments (wanting to buy say a modest 200k house) be discriminated to such an extent compared to somebody who drew down a 500k mortgage say a year ago and now unemployed.

Cyrus

MrMusician18 wrote: »

My memory of the figure being 11% out doesn't make a difference to the fundamental point - huge swathes of the economy were/are being supported by direct payments by the government. It's not just the low paid coffee shop staff.

id like to see some proper stats on it rather than recollections of a radio interview, but i take the point.

ebayissues

I have sad this before and I'll say it again. Anyone in receipt of the cov-id payment scheme shouldnt be allowed to drawdown on a mortgage.

If you're in rceipt and you came off it, the banks should wait till 6 months to exmine your situation.

Its simple as that.. What happpens if thing go south quickly? Who foots the bill... certainly not you

Harsh but it hs to be done

Quite astonishing the amount of people who were on the scheme and went ahead with purchases.

MrMusician18

Cyrus wrote: »

So 64 not 75%

What’s the percentage of the work force that’s public servants ?

My memory of the figure being 11% out doesn't make a difference to the fundamental point - huge swathes of the economy were/are being supported by direct payments by the government. It's not just the low paid coffee shop staff.

nerrad01

ELM327 wrote: »

It's very unfortunate but it is not unfair.
There's going to be a lot of redundancies when the covid payments run out, the banks are being prudent to ensure the customers can afford the loans. Given we don't allow repossession of the asset, this is a very prudent move by the bank and quite frankly one they should be applauded for. Giving a mortgage to someone in a state supported job is sub prime lending.

yea as crap as this is, its preferable to the opposite of throwing out money to people without jobs for mortgages. That will not fix any of the fundamental problems with the housing market and and it will tell a lot about any minister who starts advocating for this instead of actually correcting some of the fundamental problems

awec

I think the real issue is with people who won't get a mortgage any more even though their own financial circumstances remain unchanged, because they'll no longer fit the risk profile that the banks want.

I think this is partly why some are moving to close out their purchases, they know that even if nothing changes for them they could still be refused and stuck renting.

ELM327

Billythekid19 wrote: »

AIB saying today they not entertaining any mortgage applications for those on the covid payment. Seems very unfair on anyone in the process of looking for a house. It might explain why asking prices have increased recently with people getting sales over the line, a lot of people know they could be on reduced pay or out of a job this time next year when the recession hits. Hopefully the government can intervene and push partially state owned AIB to give some leeway to those in the middle of a mortgage approval and on the covid payment

It's very unfortunate but it is not unfair.
There's going to be a lot of redundancies when the covid payments run out, the banks are being prudent to ensure the customers can afford the loans. Given we don't allow repossession of the asset, this is a very prudent move by the bank and quite frankly one they should be applauded for. Giving a mortgage to someone in a state supported job is sub prime lending.

Billythekid19

Augeo wrote: »

It would seem mad to borrow hundreds of thousands so wouldn't it?

That would seem ludicrous.

there's no positive to having loads of folk with mortgages they can't pay, giving out more mortgages is madness in such a time.

A lot of people would be paying dead rent if they had not drawn down mortgages in recent months. Its madness pissing away a high proportion of your income on rent to a vulture fund, which would have been the case for many years.. People have mortgage and income protection for a reason.

Billythekid19

awec wrote: »

That would be quite the sight, a Fianna Fáil led government pushing banks to lend money.

I can see why AIB is doing this , its prudent and it stops us repeating mistakes of the past. It just seems harsh on say a ftb who might be mortgage approved, waiting for a build to finish and in the meantime being put on the covid payment. They essentially lose their deposit and are back to square one unless they have very deep pockets.

Markitron

cnocbui wrote: »

Presuming 15 years worth of rent, what does that add up to?

I paid rent for 7 years, and let me tell you, them numbers are not pleasant.

[Deleted User]

Billythekid19 wrote: »

.............It might explain why asking prices have increased recently with people getting sales over the line, a lot of people know they could be on reduced pay or out of a job this time next year when the recession hits...................

It would seem mad to borrow hundreds of thousands so wouldn't it?

Billythekid19 wrote: »

............ Hopefully the government can intervene and push partially state owned AIB to give some leeway to those in the middle of a mortgage approval and on the covid payment

That would seem ludicrous.

there's no positive to having loads of folk with mortgages they can't pay, giving out more mortgages is madness in such a time.

awec

Billythekid19 wrote: »

AIB saying today they not entertaining any mortgage applications for those on the covid payment. Seems very unfair on anyone in the process of looking for a house. It might explain why asking prices have increased recently with people getting sales over the line, a lot of people know they could be on reduced pay or out of a job this time next year when the recession hits. Hopefully the government can intervene and push partially state owned AIB to give some leeway to those in the middle of a mortgage approval and on the covid payment

That would be quite the sight, a Fianna Fáil led government pushing banks to lend money.

JimmyVik

cnocbui wrote: »

Presuming 15 years worth of rent, what does that add up to?

Lots

Billythekid19

cnocbui wrote: »

Presuming 15 years worth of rent, what does that add up to?

Typical rent for a 4 bed house 1500 x 12 x 15= 270,000 rent

Billythekid19

AIB saying today they not entertaining any mortgage applications for those on the covid payment. Seems very unfair on anyone in the process of looking for a house. It might explain why asking prices have increased recently with people getting sales over the line, a lot of people know they could be on reduced pay or out of a job this time next year when the recession hits. Hopefully the government can intervene and push partially state owned AIB to give some leeway to those in the middle of a mortgage approval and on the covid payment