Irish Property Market chat II - *read mod note post #1 before posting*

drogon. wrote: »

haha.. lets do more to increase house prices as quickly as possible rather than fixing the actual problem.

The inmates are running the asylum. I've seen it all now, no way are they that stupid, they're purposefully pouring fuel on the fire here. If the Central Bank bow down to this it's all over.

Deleted User wrote: »

The new central bank governor isn't known for setting conservative lending rules.

Quite the opposite. I wonder why he was chosen by the government?

:Thinking emojii:

God I'd actually forgotten he's from Treasury in NZ. Given the unbelievably obvious bubble emerging there we definitely shouldn't be following in their footsteps

Hubertj wrote: »

I don’t think so. I think (Hope?) the CB recognises the variables at play here. Relaxing or changing the rules will not fix the many many many problems with the market.

Yes, I agree. From my own experience with the Central Bank, they are already greatly concerned (likely it was pointed out to them by the European oversight entities and other regulators) about a significant systemic risk posed from leverage in the financial system. In particular, the debt bubble that exists and is fed via the shadow banking sector.

Ireland is the home for securitisation vehicles, with tens of billions worth of debt repackaged in these vehicles. These are unregulated vehicles which facilitate companies taking on more and more debt, which also enable banks to tidy up their balance sheets. Bonds are then issued referencing the performance of the underlying loans and yield hungry investors have already gobbled and continue to gobble them up. The last couple of years the penny seems to have dropped with what has been happening, right under the nose of the CBI and they are fully aware that a risk to the financial system in Ireland and abroad has some of its existence right under their nose! What's more is that it is unclear who the investing entities actually are and the link between the investing entities and the underlying loans is only starting to become apparent - after the horse has bolted.

A good example of what happens is found in the recent Bank of Ireland story where it offloaded 350m of bad loans. These will be repackaged, a bond will be created, given a coupon, a listing and a rating, PIMCO will then take exposure in some way to the bond with whatever vehicles it manages. The regulators of BoI have no more sight on the bad debt as it will end up in an unregulated SPV and the PIMCO fund which is regulated is investing in a bond, not a loan, so the Central Bank has no eyes on the loan from this side.

https://www.irishtimes.com/business/financial-services/bank-of-ireland-shares-slide-after-it-offloads-350m-of-non-performing-loans-1.4597198

In this context, and noting the previous reports of the CBI which have stated the link between the mortgage lending restrictions and house prices not further increasing, it is so unlikely they will do anything to increase them.

However, the deposit rule should be removed for certain people. It is very low risk to remove it if you implement something solid in its place like evidence of paying an RTB registered lease to a non-connected party (like a family member) of (mortgage repayment) + (X% of mortgage repayment) for Y months/years.

Edit: it makes more sense to show evidence of being able to afford the 100% mortgage, rather than the 90% mortgage, + a buffer % in order for the bank to grant an up to 100% mortgage on the property. So for borrowing 100% of the cost of a €400k house on a 30 Yr mortgage would be around €1700 monthly repayments. If you're a couple on decent salaries of maybe €120k combined and have been renting at €2k per month you would not be of much risk to the bank, especially as 5% of the value of the house is being paid off each year. Unless I'm oversimplifying?

Edit of the edit: 3.5 times salary cap would also apply to the 100% mortgage so the €120k combined salary couple could not in fact borrow €450k as 100% mortgage (€420k would be their 100% mortgage limit).

Eclectic Econometrics wrote: »

This idea might be of interest to you, Amadan.

https://internationalbanker.com/finance/interest-rates-and-human-rights-reinterpreting-risk-premiums-to-finance-the-green-new-deal-and-the-fight-against-covid-19/

Good article but I'll need to read it again tomorrow as it's a lot to take in at midnight when I'm in bed!

[Deleted User] wrote: »

"Originally Posted by Amadan Dubh View Post

However, the deposit rule should be removed for certain people"

No its cant.Because repossession cant go ahead for family property

We only can go ahead removing all rules when repossession could go ahead once bill not paid.

That is the only way to move ahead housing market but prices will go ahead too.

Leo will never go for it because he will never win elections.

Also doing it you will create the bubble .

Give mortgage to those who saved 50 per cent of property price
And take them property out if they will struglling pay the bill on time
You will have well regulated price and bills paid on time.

I would argue that house prices will increase if removing the deposit rule but not by that much and no added leverage risk is really created given the 3.5 times salary cap still applies plus they have demonstrated ability to repay the 100% mortgage.

Graham wrote: »

That's unlucky, not typical.

I'm trying to sell a property. I'll grant it's more a commercial sale, but even with the buyer having an in with the bank, it took 5 months for the bank to give a verbal nod. I'ts now been 6 months and the bank still haven't sent someone to look at the house for a valuation. I'll be lucky if it doesn't take 9 months all up, if it even goes ahead.

This country is truly dysfunctional, compared to say Australia, where transactions can take only days or a couple weeks.

[Deleted User] wrote: »

I spent 7 months paying rent before I got keys from solicitor in Dundalk
I spent 5 days to be a owner of the site in Lithuania ( from day I visited the bank and apply to mortgage to day to be a owner )

It took me 5 weeks. Why did it take you so long? Was it an old house the the solicitor had difficulty perfecting the title? I’ve only heard of such long delays with new builds or old houses and issues with title.

Hubertj wrote:

It’s irrelevant how many open planning permissions there are when capacity to build is limited. What the article shows it that Sinn Fein and making things worse for political gain.

If capacity is limited and there are already sufficient permissions in the system, how are we making things worse by opposing Poor value for money schemes for the taxpayer.

The function of the planning system is to provide sufficient correct housing in appropriate locations.

It should not be a mechanism for land hoarders to increase the value of their lands and sit on it

handlemaster wrote:

No wonder there are so few new homes been builth when you have a party thats always banging on about free homes opposing their co construction

What free homes? Sf do not advocate for this, they're trying to wrestle the whole property market away from the monopolsation of the fire sectors