Softening house market?

byrne249 · 19-10-2022 10:56AM

https://www.boards.ie/discussion/comment/119764259#Comment_119764259

I know unfortunately. My own mantra is generally that the system is broken and Sinn Fein being in power would change nothing. Just the face of the tyrant as it were. Maybe when SF do get in power it will highlight how broken and corrupt the system is for people to want to change it properly but I hold little faith. People are very apathetic here.

cruizer101 · 19-10-2022 10:57AM

Comes into effect from 1st Jan 2023

Limit for ftb increased to 4

Limit for non ftb still 3.5 but deposit limit at 10% instead of 20%

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

byrne249 · 19-10-2022 11:04AM

Broken record here. But is it that our Central Bank is applying an inflationary policy at the exact time when the ECB is in a fight for it's life/currency against Inflation? How can the ECB and our own CB be in complete contravention with each other?

yourdeadwright · 19-10-2022 11:05AM

https://www.boards.ie/discussion/comment/119764228#Comment_119764228

Living in England brings other issues you would not have here but how did the Irish get to this place where having even a small house in a working class area has become such a hard thing to achieve

Everyone who puts in the effort to works a 9 to 5 for 10 to 20 years should be bale to afford a small modest house , Its bizarre that stage we have got to the stage that it'll be become only accessible for a small % of our young people

Mandzhalas · 19-10-2022 11:05AM

Am i right thinking that more than likely prices will go up in January and it is better of to buy now?

Cllr_Dermod_Fahy · 19-10-2022 11:10AM

This is unbelievable, at the same time he's increasing the amount of money people can use to chase after limited housing!

https://www.rte.ie/news/business/2022/1018/1329912-gabriel-makhlouf-on-euro-zone-economy/

The euro zone economy may be facing a recession but rate hikes remain absolutely necessary because persistently high inflation is damaging the economy and stability, the Central Bank Governor said today.

Persistently high inflation is damaging the economy so let's increase inflation even further by giving people more money to run house prices up. Disgraceful. This guy should be ashamed.

ricimaki · 19-10-2022 11:14AM

https://www.boards.ie/discussion/comment/119764329#Comment_119764329

First time buyers having additional funds available will drive prices up.

But, reducing the deposit requirements for second time buyers will bring more buyers into the market with less available funds.

Reducing the number of exceptions from 20% to 15% will also reduce the available funds for more people to purchase with.

I'd expect "starter" home prices to increase, and other homes to remain the same.

People will be borrowing more in nearly all cases, tying them into more expensive loans, regardless of house prices.

quokula · 19-10-2022 11:17AM

https://www.boards.ie/discussion/comment/119764327#Comment_119764327

People are making ridiculous comparisons between our capital city and rundown parts of the north of England. See how you get on comparing house prices in London with Offaly, it's equally as valid.

Housing affordability is no worse in Ireland than the UK when you compare like for like in terms of the area, standards of living and salaries.

AySeeDoubleYeh · 19-10-2022 11:19AM

I wonder if it might incentivise some of those with houses on the market to pull them and try again in the new year. FTB's can borrow more and the banks won't have exhausted their exemption limits, as is the case for most banks towards the end of the year.

yourdeadwright · 19-10-2022 11:23AM

https://www.boards.ie/discussion/comment/119764385#Comment_119764385

I understand what your saying but living in a suburb of a city like Liverpool or Manchester or so has no comparison to living in Offaly ,

Also i was talking about an area that is far from run down ,

Sure look at North Dublin if your not living along the coast the chances are your living in a rough enough area ( a few acceptation's) & prices are mental ,

I do understand there are other issues in England that we don't have but the value's of homes in Dublin is insane ,

19-10-2022 11:33AM

This is absolute insanity from the Central Bank.

House prices are high in Ireland because of a lack of supply.

Loosening macroprudential rules does zero to fix this issue. It just stuffs more debt into Joe Public, at a time when interest rates are rising. At a time when for the first time in years, house price growth was at least slowing, the regulator pours more fuel on the fire and introduces a suite of policies that can only have an inflationary impact on house prices.

The balderdash talked about making certain building projects more viable for builders will come to absolutely nothing either; because if inflation stays persistently high, then building costs will keep climbing with it.

It's absolute madness.

Furze99 · 19-10-2022 11:38AM

Interest rates are going up and not going back down anytime soon. There is a substantial increase in inflation and cost of living. These factors will have far more dampening impact than being able to borrow a bit more.

pinksoir · 19-10-2022 11:44AM

https://www.irishtimes.com/business/economy/honohan-criticises-government-housing-policy-as-reactive-and-inflationary-1.4863086

Older article by previous ICB governor that goes into this stuff.

One thing to note is that the UK has also removed/relaxed their LTI lending rules and the interest rates and other cost of living pressures may be having a greater effect on house prices there seemingly.

straight · 19-10-2022 11:44AM

https://www.boards.ie/discussion/comment/119764027#Comment_119764027

There is alot of people with an agenda talking about property without much knowledge.

awec · 19-10-2022 11:44AM

https://www.boards.ie/discussion/comment/119763902#Comment_119763902

The Central Bank is not the government.

awec · 19-10-2022 11:53AM

https://www.boards.ie/discussion/comment/119764497#Comment_119764497

I see we've reached the point on the thread now where the rental crisis is supposedly imaginary, and rents are actually great value, but we just never hear about it in the media.

There's a lot of "I'm alright Jack" in this thread. People who have managed to bag themselves a cheap rental wondering why everyone can't just bag themselves a cheap rental.

Browney7 · 19-10-2022 12:03PM

https://www.boards.ie/discussion/comment/119764347#Comment_119764347

A direct quote in the CBI note. "In both cases, the changes resulting from this framework review are estimated - all else being equal - to only modestly increase the national HPI (house price to income ratio). These estimates of the impact on the HPI do not take account possible variation in a range of other factors that could influence house prices, which include rising interest rates and a fall in household real incomes".

Another direct quote "Focussing on renters' access to various points on the property price distribution, the CBI estimates that, if applied to properties sold in 2021, an increase in the FTB LTI limit from 3.5 to 4 would have restored the share of renter's able to purchase the median property to 2015 levels. This methodology deals only with the immediate boost to purchasing power, and does not model the possibility that at higher LTI limits, the price to income ratio will also adjust across the economy, which would offset some of the gains experienced by potential purchaser's"

MacronvFrugals · 19-10-2022 12:07PM

with the Eurozone inflation at 9.9% what do we expect the ECB to go with at the next meeting?

straight · 19-10-2022 12:07PM

https://www.boards.ie/discussion/comment/119764531#Comment_119764531

Or work hard, save hard and buy your own house. I see plenty value out there.

Wanderer78 · 19-10-2022 12:12PM

https://www.boards.ie/discussion/comment/119764197#Comment_119764197

yup, this is beyond disturbing, but not surprising at all, especially when neoclassical economists are involved, they just have an outright refusal to accept the true functions of money, debt and banks in our markets, especially our property markets, this will be detrimental to our property markets!

Cllr_Dermod_Fahy · 19-10-2022 12:12PM

https://www.boards.ie/discussion/comment/119764581#Comment_119764581

I actually can't believe the CB are applying the new rules to properties sold in 2021 under old rules as a support of this decision. Once the new rules are implemented, the range will modify back to the average we have now. If say, 20% of renters could afford the median in 2015 and in 2021 it's only 10% and these new rules will immediately change that back to 20% of renters being able to afford the median house price, then house prices will rise again and we'll go back to 10% of renters being able to afford the median.

And even if "More renters can buy". Yeah, technically they can afford to buy but they won't be able to because there isn't enough houses for them all to buy.

19-10-2022 12:14PM

https://www.boards.ie/discussion/comment/119764329#Comment_119764329

Buy buy buy, quick.........

mike_cork · 19-10-2022 12:15PM

https://www.boards.ie/discussion/comment/119764597#Comment_119764597

A rise of .75% seems to be the most likely. I've seen some talk of a full 1% rise but that seems unlikely.

https://www.reuters.com/markets/europe/ecb-go-big-again-oct-27-with-75-bps-rate-hike-2022-10-19/

Jonnyc135 · 19-10-2022 12:25PM

https://www.boards.ie/discussion/comment/119764651#Comment_119764651

20% deposit reduced to 10% for movers, that wont help either. I'm still in disbelief over their actions, in a time where inflation needs to be tamed they are throwing petrol on it.

Wanderer78 · 19-10-2022 12:29PM

https://www.boards.ie/discussion/comment/119764685#Comment_119764685

...petrol packed with tnt!

idiots, dangerous fools!

yourdeadwright · 19-10-2022 12:32PM

Basically this step will all but confirms the big bust is on the way again

The question is does it speed up getting to the bust or hold it off & make it worse when we get there ,

byrne249 · 19-10-2022 12:42PM

https://www.irishtimes.com/news/ireland/irish-news/ecb-raised-concerns-over-new-central-bank-of-ireland-boss-1.3970083

They were right. This Scandalous hack was the only applicant for the job of course.

MacronvFrugals · 19-10-2022 12:44PM

https://www.boards.ie/discussion/comment/119764651#Comment_119764651

Wonder also with TPI in place will they start some form of QT soon

johnnysee86 · 19-10-2022 12:52PM

I was lucky enough to get on ladder last year, but have ended up living a nightmare with neighbours from hell. As a result have been forced to sell. Will have to pay back HTB in full, which I dont believe is fair. However, I have applied for a mortgage again(as of last week) it was approved, but I have yet to action. As a second time buyer now will only need 10% if I buy from Jan next year? Or do I have to reapply(even though the critera has not changed in what I can borrow i.e 3.5x) would be really appreciative if anyone knew the anwser here? To me it seems like a waste of everyones time re applying to get the same 3.5x outcome? Thanks, J

Browney7 · 19-10-2022 12:55PM

https://www.boards.ie/discussion/comment/119764630#Comment_119764630

Don't be silly, stresses and step change impacts exist in a vacuum. If you presented this analysis in a buy side top tier investment firm you'd have your drawer packed into a cardboard box for you before you'd finish the pitch.

Softening house market?

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