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

MacronvFrugals · 18-10-2022 04:09PM

https://www.boards.ie/discussion/comment/119761430#Comment_119761430

100% Cy, seems reckless if they eased these rules. Guessing its on the back of their review that was taking public submissions last year.

SwimClub · 18-10-2022 04:18PM

https://www.boards.ie/discussion/comment/119761441#Comment_119761441

The outlook for banks is improving with higher interest rates and a lot of the existing mortgages on the books are all under the tighter regulations so might not be that reckless to support the housing market a bit now that the cheap credit has disappeared the bubble risks are lower.

GoldFour4 · 18-10-2022 04:39PM

The CBI increasing lending limits will absolutely justify anyone who has purchased recently. Homes for average workers are going to shoot up if they go to 4 or 4.5 times.

Yurt2 · 18-10-2022 04:44PM

Will be interesting to see what they come out with.

Fairly obvious that house prices are set to moderate and ultimately fall with interest rates the way they are. Why the CB would wish to do something so obviously pro-inflationary would be a mystery. They are independent, but there are obvious political and industry pressures that are frequently brought to bear on their decision making.

Head of CB is a Kiwi, so you'd hope he'd know a thing or two about what not to do given their ridiculous house price situation.

Yurt2 · 18-10-2022 04:45PM

https://www.boards.ie/discussion/comment/119761481#Comment_119761481

Support the housing market for who? Sellers or buyers?

drogon. · 18-10-2022 04:53PM

https://www.boards.ie/discussion/comment/119761414#Comment_119761414

Just to add this was already planned and not something unexpected

The Central Bank has decided that the calibration of the mortgage measures will remain unchanged at this time, in light of the ongoing framework review. The framework review is considering the overarching approach to the mortgage measures to ensure that they remain fit for purpose, in view of the evolution of the financial system and economy since the measures were first introduced in 2015. This framework review will conclude in the second half of 2022.

https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures

DataDude · 18-10-2022 04:57PM

https://m.independent.ie/business/personal-finance/property-mortgages/central-bank-set-to-relax-mortgage-lending-rules-42076706.html

Sounds like it’s going to be 4x. Nothing on exemptions. What a ludicrous time to make this call as rates rise and cost of living bites.

I could have seen an argument for easing LTI if an individual availed of a 30 year fixed rate at sub 3% (or whatever). But this seems terribly reckless.

Ohmeha · 18-10-2022 04:57PM

Indo stating the CB are going to relax LTI from 3.5 to 4.0. Between FF/FG eviction ban today and this it's absolutely insane what is going on in this country to inflate the market

https://www.independent.ie/business/personal-finance/property-mortgages/central-bank-set-to-relax-mortgage-lending-rules-42076706.html

L1011 · 18-10-2022 05:11PM

Increasing the multiplier with interest rates rising is odd. It was brought in when rates were ~4% though; but we could go past that on the way back up if we're unlucky.

SwimClub · 18-10-2022 05:15PM

If you factor in the public sector pay rises over the next 2 years being multiplied by a factor of 4 instead of pre-rise salaries times the old rate of 3.5 it implies about an extra 80% of pre-inflation adjustment applicant combined salary added on to affordability.

wassie · 18-10-2022 05:15PM

https://www.boards.ie/discussion/comment/119761699#Comment_119761699

Anyone currently selling their house.

SwimClub · 18-10-2022 05:21PM

This happening on the same day as an eviction ban is interesting, one way to free up rental units is to get the tenants to buy homes.

It makes huge sense as many are paying multiples of what a mortgage repayment would be in rent.

Yurt2 · 18-10-2022 05:24PM

https://www.boards.ie/discussion/comment/119761706#Comment_119761706

Being able to borrow more does not equate to greater affordability, particularly if the measure is pro-inflationary, which it inevitibly will be. Tag-on greater interest repayments, and your hypothetical dual-income public sector workers will be paying a higher mortgage repayment, taking on more debt than they otherwise would be - and these would be buyers best placed to buy at the lower end of the market with the 3.5 rules already.

I'm getting accustomed to how you think. Anything that pumps house prices will be couched in language that soft-peddles the upside for sellers, and downplays the negatives for buyers.

SwimClub · 18-10-2022 06:03PM

https://www.boards.ie/discussion/comment/119761738#Comment_119761738

As a toy example:

Take public sector worker(s) on combined income of 60k, that has a 10% deposit saved up or gifted from relatives etc.

Old system on salary multiples, they can afford an apartment of 233k, now post inflation salary increases and revised lending rules they can afford an apartment of 288k.

lets take the higher amount and a 30 year mortgage on 260k (10% deposit)

Repayments are

1,096 at 3%

1241 at 4%

1396 at 5%

1559 at 6%

At this point we might approach what they are paying in rent over the last years, which counts as affordability in the mortgage application

Villa05 · 18-10-2022 06:04PM

https://www.boards.ie/discussion/comment/119761699#Comment_119761699

It's a great idea for an investment fund who want to de_risk after investing on the assumption 0 rates

It's a great idea for developers experiencing a slow down

It's a great idea for landowners and speculators

All groups stated are represented by former politicians linked to current government parties.

Follow the money!

kayfabe · 18-10-2022 06:10PM

https://www.boards.ie/discussion/comment/119745189#Comment_119745189

This post aged well

jimmybobbyschweiz · 18-10-2022 06:38PM

https://www.boards.ie/discussion/comment/119761641#Comment_119761641

One final pump and dump before we tumble back to 2002 prices, leaving SF a pile of manure of a country to clean up

wassie · 18-10-2022 06:57PM

The timing certainly would be interesting to make the decision to increase LTIs.

Cyrus · 18-10-2022 07:06PM

https://www.boards.ie/discussion/comment/119762075#Comment_119762075

do you really think we will tumble back to 2002 prices ? It’s not going to happen. Nor will a sf clean up be successful.

Jonnyc135 · 18-10-2022 07:06PM

https://www.boards.ie/discussion/comment/119761929#Comment_119761929

U hit the nail on the head, my god I actually nearly crashed the car on the way home when I heard Matt Cooper on about it earlier. Like christ almighty is it not the worst idea imaginable, this will only make things way worse not alone making the CPI inflation numbers worse meaning more likely interest rate hikes from the ECB.

Crazy stuff, looks like the want the average Joe to step in and start buying the crap the pension funds want to offload at an inflated price. Stink rotten corruption

Tonesjones · 18-10-2022 07:15PM

https://www.boards.ie/discussion/comment/119761641#Comment_119761641

This is disappointing

Villa05 · 18-10-2022 07:35PM

https://www.boards.ie/discussion/comment/119761925#Comment_119761925

But you can't build an apartment for less than 500k.

50% shared ownership scheme incoming :-)

Jonnyc135 · 18-10-2022 07:46PM

https://www.boards.ie/discussion/comment/119762262#Comment_119762262

More than disappointing, every clown knows that if you give people more money too compete for the same number of houses prices will just rise and realistically still only benefit the very very few.

How can these central bankers get these simple realities so so wrong. This is not just that twat in the Irish central bank but all the other major central banks.

How can they not see how this will play out, they are not oblivious there has to be pressure from investment funds that need to offload ASAP, I cannot see any other rational explanation for it.

ittakestwo · 18-10-2022 07:50PM

Pigs. The developers will be delighted with this.

combat14 · 18-10-2022 08:18PM

https://www.boards.ie/discussion/comment/119761925#Comment_119761925

most of gross public sector pay rises spread over 2 years will be swallowed by paye, prsi, usc, pension levy, inflation, interest rate rises ... dont get your hopes up too high that it will pump house prices more ...

also looks like uk market (pension/property) is heading for severe financial distress how this knocks on over here remains to be seen...

jimmybobbyschweiz · 18-10-2022 08:35PM

https://www.boards.ie/discussion/comment/119762219#Comment_119762219

The fundamentals are not there if you carve out the state to explain how housing costs should be 50% higher than 2002 levels. This is one long party that has run out of punch and the direction is clear once FF and FG can no longer force supply down and pump cash into the demand side of housing (as they are purely political the reasons why housing costs are high, by design).

And SF are going to be needed to clean up the devastation caused on the Irish economy by successive FF and FG governments that have criminally squandered out chance at long term prosperity. I mean, an eviction ban for no obvious reason for the next few months; is the economy really on the brink of a devastating recession notwithstanding household wealth is at an all time high, we have full employment and individual savings are soaring too. It doesn't add up and to me I think it seems that the economic outlook is utterly devastating for Ireland, which is why the government are being absolutely maniacal with their actions the last while such as uncontrolled refugee numbers being put into every nook and cranny of a dwelling on the State tab, evictions being fully banned for 5 months for no reason, the State offering to pay inflated institutional property portfolios, HAP acting as a very high floor to rents and now the CBI inexplicably throwing more fuel at the housing market inflation fire. The country is cannibalising itself again because of housing and it is being fully overseen by FF and FG.

18-10-2022 08:48PM

https://www.boards.ie/discussion/comment/119762685#Comment_119762685

You don’t think increased population, full employment, large percentage of high paying jobs, low stock, high rentals, increased construction costs, preference for ownership etc are the fundamentals necessary to explain the rise in property prices since 2002?

What fundamentals explained the rise in property prices between 1982 and 2002?

hometruths · 18-10-2022 08:55PM

https://www.boards.ie/discussion/comment/119761481#Comment_119761481

so might not be that reckless to support the housing market a bit now

If demand in the housing market is at record highs, so we're told, and supply in the housing market is at record lows, so we're told - why on earth does the housing market need support?

SwimClub · 18-10-2022 09:05PM

https://www.boards.ie/discussion/comment/119762795#Comment_119762795

Interest rate rises mainly, private landlords leaving in their droves but not allowed to sell. A large number of renters who can't afford to buy new builds at prices that builders are happy to build at and are stuck paying crazy rent instead that can be multiples of a mortgage, they can also buy off the exiting landlords so there is no net impact on renting supply.

It's not like a salary multiple of 4 or 5 is reckless, in fact 3.5 is unusual. European average is 4 or 5.

SwimClub · 18-10-2022 09:09PM

https://www.boards.ie/discussion/comment/119762846#Comment_119762846

I left out the impact of inflation on cost of build etc. even though it's implied.

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

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