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Central Bank to limit amount banks lend for home purchase

handlemaster

http://www.irishtimes.com/business/sectors/financial-services/central-bank-to-impose-limits-on-home-loans-1.1948176

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matt-dublin

Mongfinder General wrote: »

What makes you feel I think we can afford to pull out?

There's another group here on Wikipedia you might take a look at.

http://en.wikipedia.org/wiki/Sinn_F%C3%A9in

Here's the thing. The clue is in the name. Ourselves alone. Your complacency is quite breathtaking. These guys don't give a fcuk about financial stability. They're all about fcuking up as much of the opposition as possible.

And that my friend is pretty much everybody.

My god, next you'll be telling me that 9/11 was an inside job by the bush administration and that aliens exist and are our forefathers!

Mongfinder General

matt-dublin wrote: »

My god, next you'll be telling me that 9/11 was an inside job by the bush administration and that aliens exist and are our forefathers!

Fair enough there chief, not as far fetched as your obviously limited appetite for risk appraisal might suggest.

Barely Hedged

Mongfinder General wrote: »

You're assuming that Ireland remains part of the Eurozone.

These guys are going to take a few seats in Germany. http://en.wikipedia.org/wiki/Alternative_for_Germany

Apparently the Chancellor is a little concerned.

What probability, between 0% and 100%, do you attach to the outcome that Ireland doesnt remain within the Euro currency?

seamus

Jaysus, there are few reasons that I would emigrate for, but a government who decided to withdraw from the euro at this stage is certainly one of them.

Being part of the euro certainly was one of the reasons we got stuck with bank debt, but it also saved our asses. Without it our currency would have collapsed and devastated the economy, a little like what's happening to Russia right now.

matt-dublin

Mongfinder General wrote: »

Fair enough there chief, not as far fetched as your obviously limited appetite for risk appraisal might suggest.

My risk appraisal is fine, but the probability of ireland pulling out of the eurozone is minimal. It would literally bankrupt the country and the punt would be worth around 60c. and we would loose all EU capital project funding for infrastructure.

Basically as a small state we benefit way too much to pull out. The only time we lost out was with the recession because we couldn't devalue our own currency to recapitilase the state and we had no control of our own fiscality.

When you start spouting on about Sinn Fein and how "the chancellor" is worried about a minority party pushing countries out of the EU it seems like you read the national enquirer too much for political opinion.

The_Conductor

Barely Hedged wrote: »

What probability, between 0% and 100%, do you attach to the outcome that Ireland doesnt remain within the Euro currency?

Funny that this was brought up yesterday- following the collapse of the Greek government this morning- there have been fresh comments from German politicians on the suitability of Portugal, Ireland, Greece and Spain remaining in the Euro. With the rise of the far right in Germany- thanks to Angela pandering to the left and greens, rather than the mainstream- she may feel she has to be seen to act- and its a lot easier to act against Greece for starters- but also Portugal, Spain and Ireland- should the push come to the shove........

With the collapse of the Greek government this morning- looks like all bets are off the table.

matt-dublin

The_Conductor wrote: »

Funny that this was brought up yesterday- following the collapse of the Greek government this morning- there have been fresh comments from German politicians on the suitability of Portugal, Ireland, Greece and Spain remaining in the Euro. With the rise of the far right in Germany- thanks to Angela pandering to the left and greens, rather than the mainstream- she may feel she has to be seen to act- and its a lot easier to act against Greece for starters- but also Portugal, Spain and Ireland- should the push come to the shove........

With the collapse of the Greek government this morning- looks like all bets are off the table.

There will be an election, they will renegotiate their debt and then nothing else will change

The_Conductor

matt-dublin wrote: »

There will be an election, they will renegotiate their debt and then nothing else will change

A lot of people- not just Germans- think they should be taught a lesson (particularly as they lied through their teeth in order to get into the Euro in the first place- you may remember the scandal of government bonds being repackaged by a certain American Financial Advisement Firm so they wouldn't count towards national debt/ current deficit levels.........)

There could well be a lot of turbulence in the months ahead. What this means for Ireland and Irish lenders- and borrowers- remains to be seen. For starters- the asset purchase programme of the ECB could well be put on hold- and other mechanisms other than QE used to ensure liquidity does not end up where the ECB would rather it didn't (which would include the Irish, Portuguese, Spanish and Dutch housing markets).

I think we could have some very interesting macroeconomic activities on the horizon- which at very least- is going to add significant uncertainty to the Irish housing market?

Barely Hedged

The_Conductor wrote: »

Funny that this was brought up yesterday- following the collapse of the Greek government this morning- there have been fresh comments from German politicians on the suitability of Portugal, Ireland, Greece and Spain remaining in the Euro. With the rise of the far right in Germany- thanks to Angela pandering to the left and greens, rather than the mainstream- she may feel she has to be seen to act- and its a lot easier to act against Greece for starters- but also Portugal, Spain and Ireland- should the push come to the shove........

With the collapse of the Greek government this morning- looks like all bets are off the table.

Rise of the far right. What exactly quantifies a "rise" and what percentage of the voting power will that obtain? It might result in the power parties taking a bit more notice of them but will legislative action be taken - no.

Nothing will change with Greece. They'll go from right to left but they have and will have to both adopt middle of the road approaches.

It's nothing more than what will be seen as noise in a year or two, given the grand scheme of things

Barely Hedged

The_Conductor wrote: »

A lot of people- not just Germans- think they should be taught a lesson (particularly as they lied through their teeth in order to get into the Euro in the first place- you may remember the scandal of government bonds being repackaged by a certain American Financial Advisement Firm so they wouldn't count towards national debt/ current deficit levels.........)

There could well be a lot of turbulence in the months ahead. What this means for Ireland and Irish lenders- and borrowers- remains to be seen. For starters- the asset purchase programme of the ECB could well be put on hold- and other mechanisms other than QE used to ensure liquidity does not end up where the ECB would rather it didn't (which would include the Irish, Portuguese, Spanish and Dutch housing markets).

I think we could have some very interesting macroeconomic activities on the horizon- which at very least- is going to add significant uncertainty to the Irish housing market?

Very little correlation between the impact it would have on Irish banks funding rate, the employment prospects in this country but it might impact our bond prices. Will all these things together be significant - no

Mongfinder General

Barely Hedged wrote: »

What probability, between 0% and 100%, do you attach to the outcome that Ireland doesnt remain within the Euro currency?

I couldn't quantify a number. I could only extrapolate from available data. I feel the first major factor is the contention that we are part of a common currency and not part of monetary union. We have (EU) pretended that we are part of a monetary union with the ESCB coalescing on a multilateral basis to develop and implement monetary policy across the Eurozone. Any such policy needs to be implemented by governments on a supranational basis. This is very unlikely to happen even in the medium term. Even less chance for fiscal policy.
The second and more worrying aspect is the veracity of information collated and released by national central banks and governments. Can we trust our neighbours to tell us the truth about their national accounts? Personally, I wouldn't trust the Greeks and Italians. Their national debt levels are scary. Their histories with the drachma and lira are laughable. Their levels of tax evasion and avoidance promote a culture of duplicity when dealing with the authorities. The only reason why creditors continue to lend to them is because a guarantor will have to step in to save the day and stop the currency union breaking up. However, there comes a point where the creditor and or the guarantor have had enough. I don't think we're there quite yet but a bout of political instability will be very damaging. The risk is on the low side, but words will only calm matters so much. An exit from the Euro brings uncertainty. Most of us don't want that.

Barely Hedged

Mongfinder General wrote: »

I couldn't quantify a number. I could only extrapolate from available data. I feel the first major factor is the contention that we are part of a common currency and not part of monetary union. We have (EU) pretended that we are part of a monetary union with the ESCB coalescing on a multilateral basis to develop and implement monetary policy across the Eurozone. Any such policy needs to be implemented by governments on a supranational basis. This is very unlikely to happen even in the medium term. Even less chance for fiscal policy.
The second and more worrying aspect is the veracity of information collated and released by national central banks and governments. Can we trust our neighbours to tell us the truth about their national accounts? Personally, I wouldn't trust the Greeks and Italians. Their national debt levels are scary. Their histories with the drachma and lira are laughable. Their levels of tax evasion and avoidance promote a culture of duplicity when dealing with the authorities. The only reason why creditors continue to lend to them is because a guarantor will have to step in to save the day and stop the currency union breaking up. However, there comes a point where the creditor and or the guarantor have had enough. I don't think we're there quite yet but a bout of political instability will be very damaging. The risk is on the low side, but words will only calm matters so much. An exit from the Euro brings uncertainty. Most of us don't want that.

Monetary union is coming and plans are well developed for it.

I cant argue against their cultural of aversion to tax compliance but to say that will contribute to Ireland exiting the Euro??? The possibility of this happening is so low that i wouldnt even consider the notion of it

Mongfinder General

Barely Hedged wrote: »

Monetary union is coming and plans are well developed for it.

I cant argue against their cultural of aversion to tax compliance but to say that will contribute to Ireland exiting the Euro??? The possibility of this happening is so low that i wouldnt even consider the notion of it

Such as?

Barely Hedged

Mongfinder General wrote: »

Such as?

Apologies, i should have been clearer. A strict monetary union.

For starters theyre setting up a regulator to monitor all banks in the Eurozone or the top 50.

European wide stress testing.

Greater oversight of national budgets

El_Dangeroso

This is so tangentially related to the topic that it probably warrants another thread in politics not accommodation and property.

Mongfinder General

Barely Hedged wrote: »

Apologies, i should have been clearer. A strict monetary union.

For starters theyre setting up a regulator to monitor all banks in the Eurozone or the top 50.

European wide stress testing.

Greater oversight of national budgets

Do you mean the single supervisory mechanism? That has been in existence since the start of November.

Their remit is a banking union. Nothing to do with monetary policy.

This is what I was referring to, or the lack of cogent policy on it.

http://www.centralbank.ie/mpolbo/mpolicy/Pages/introduction.aspx

MarkAnthony

I was back home there over Xmas and it set me a wondering. Prices in Dublin seem to be on par with Oxfordshire (startlingly so) which is rated as one of the least affordable cities (if not the least affordable) due to the lack of a London weighting. Wages here though seem much higher so I'm beginning to wonder if Dublin prices are actually that crazy at the moment.

That part of the UK would still be commuter belt for London to be fair.

[Deleted User]

So apparently house prices are down because of the CB proposals.
To be fair, all that happened was that asking prices were slightly lower in the final quarter of the year but it probably is a sign that expectations are cooling.

Whether it has much to do with the CB plans, it's harder to say.

Just before Christmas it was reported that November house prices in Dublin were down 0.5%. A very small fall but still another hint that the runaway price rises may be coming to an end.

But again, the papers linked it to the CB proposals - even though there was hardly time for them to influence sales that went through in November (as those sales were probably agreed before the CB floated its plan).

Still, there are two narratives taking hold at the moment:
- CB rules bad for FTBs and already affecting the market
- Prices are falling (or maybe just not rising faster than inflation)

Whether those two statements are actually true, I have no clue! But I am sure that they are now the story and the media will shoehorn facts to fit those narratives. See how the Daft report (stating asking prices were down) got more coverage than the MyHome report (stating asking prices were rising more slowly than had been the case).

The_Conductor

House prices down because of the central bank proposals.......
Thats a laugh.
Prices have been bouncing up and down- sometimes by startling amounts- since the beginning of last year- some months have seen bounces of 7-8% on a monthly- never mind annualised- basis. The central bank proposals- postdate the volatility in the Dublin market- and to use it as an excuse is akin to plucking a random excuse out of thin air to explain everything away.

The CSO stats are quoted a few pages back- they do not support any difference in the behaviour of the Dublin market after the central bank proposals- to be brutally honest- if anything- they may have stabilised it somewhat- we haven't had mad swings since their proposals. Certainly its drifting downwards- but not lurching in 6-7-8% changes month on month- which we had earlier in the year.........

makeorbrake

The_Conductor wrote: »

House prices down because of the central bank proposals.......
Thats a laugh.

Should they not be up as a consequence of that - as people try and pile in and get transaction across the line before such measures are implemented?

johnp001

The_Conductor wrote: »

House prices down because of the central bank proposals.......
Thats a laugh.
Prices have been bouncing up and down- sometimes by startling amounts- since the beginning of last year- some months have seen bounces of 7-8% on a monthly- never mind annualised- basis. The central bank proposals- postdate the volatility in the Dublin market- and to use it as an excuse is akin to plucking a random excuse out of thin air to explain everything away.

The CSO stats are quoted a few pages back- they do not support any difference in the behaviour of the Dublin market after the central bank proposals- to be brutally honest- if anything- they may have stabilised it somewhat- we haven't had mad swings since their proposals. Certainly its drifting downwards- but not lurching in 6-7-8% changes month on month- which we had earlier in the year.........

Ronan Lyons article today http://www.ronanlyons.com/2015/01/05/expectations-credit-and-house-prices/
seems to be very definitive in its claim that these falls are actual trends in the market rather than statistical noise.

MarkAnthony

TBH that Moore's almanac thing is probably the most reliable source going at the mo :pac:

gaius c

SBPost says an announcement on this is coming this week, possibly today. Honohan is talking at 1.45pm.

Sala

gaius c wrote: »

SBPost says an announcement on this is coming this week, possibly today. Honohan is talking at 1.45pm.

Betting time!! If this is in fact the announcement I bet it will be either:
- 3.5 times income and 20% deposit , no change
or
- 3.5 times income and 20% deposit , phased in over 12-18 months, possibly starting at 15% from now

seamus

I would be surprised if Honohan used a forum like that - a think-tank of international finance people - to officially announce it, doesn't seem appropriate.

That's not to say though that he won't bring it up as something which they are planning to do as it seems relevant to the topic of the conference.

Betting time? 4 times income and a phased introduction. Everyone's well aware that a 20% rule straight in would collapse the property market (again). whereas something phased - 12.5/15/17.5/20 over a 3-4 year period would give people time to adjust without killing property sales.

[Deleted User]

Probably depends on whether he has watered it down or not. If he's sticking to his guns then it's a pretty good forum for it.

My bet is for some kind of sop to the politicians and lobbyists. Either a fairly short time-frame phased approach or a promise to review unintended consequences after a fixed period.

Hope he goes with 20% and 3.5 x income, noting that people with mortgage approval are exempt and banks have leeway to make exceptions.

Sala

seamus wrote: »

I would be surprised if Honohan used a forum like that - a think-tank of international finance people - to officially announce it, doesn't seem appropriate.

That's not to say though that he won't bring it up as something which they are planning to do as it seems relevant to the topic of the conference.

Betting time? 4 times income and a phased introduction. Everyone's well aware that a 20% rule straight in would collapse the property market (again). whereas something phased - 12.5/15/17.5/20 over a 3-4 year period would give people time to adjust without killing property sales.

The propertypin said the SBP was reporting the announcement would be this week, the only item in the CB calendar is this, and is related to macro-prudential regulation, so people are assuming/hoping it will be dealt with. But it has not be announced directly that the consultation process is over, so it may not be today. We'll find out at 1.45.

[Deleted User]

The consultation period is actually over. It finished on (I think) December 6th. Part of the reason they didn't go ahead for Jan 1 was apparently the volume of submissions they received. But they're not taking any new input, it's just a case of wading through it all and coming up with a final regulation

gaius c

Either way, it's terribly exciting, isn't it!

[Deleted User]

Yes!

Where did our lives go wrong?