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The average age of first-time home buyers is going up and up

Hollister11

http://jrnl.ie/2809133

The average age of buying your first home is now 34.

This is ridiculous, people will be paying mortgages until there 65-70.

Something needs to be done to either house prices, mortgage rules, or wages.

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Michael D Not Higgins

Mod: Constructive criticism please.

OP, your solutions are not workable. Affecting wages or credit (via mortgage lending rules) only increases the money everyone has available thus increasing the house prices further. Affecting the house price is a factor of the building costs and scarcity of supply. Both are being worked on but are long lead issues and will take a number of years to address.

In the meantime, 34 isn't too bad. The UK has a similar age (I've seen 31-36 quoted), similar supply problems and similar demand problems. These are not unique problems with easy solutions unfortunately.

Canadel

Hollister11 wrote: »

http://jrnl.ie/2809133

The average age of buying your first home is now 34.

This is ridiculous, people will be paying mortgages until there 65-70.

Something needs to be done to either house prices, mortgage rules, or wages.

34 is still quite young by today's standards.

The real issue isn't the age of buying your first home going up, it's being stuck in an exploitative, dysfunctional rental market in the mean time. Obviously that relates to the first property point in that people have less savings. But a lot of people also value flexibility and freedom and would not be interested in buying a home until their late 30s/40s.

Michael D Not Higgins

Canadel wrote: »

34 is still quite young by today's standards.

The real issue isn't the age of buying your first home going up, it's being stuck in an exploitative, dysfunctional rental market in the mean time. Obviously that relates to the first property point in that people have less savings. But a lot of people also value flexibility and freedom and would not be interested in buying a home until their late 30s/40s.

Considering the people who are 30 now left college in the middle of the recession, I don't find it surprising at all. Those a few years older had a few years in the job market to get settled and build up savings but were obviously affected by the crash and it's taken them that bit extra to buy now.

trobbin

Hollister11 wrote: »

http://jrnl.ie/2809133

The average age of buying your first home is now 34.

This is ridiculous, people will be paying mortgages until there 65-70.

Something needs to be done to either house prices, mortgage rules, or wages.

A couple I know bought their first home last year. Since they've been broke. All their income is gone each month, they didn't go on holiday last year and won't be this year either, (a group of us have done this every year) they aren't saving either. She's 31 and he's 35, they got a 35 year mortgage. All their savings went on deposit.
They both work and have no kids, their jobs aren't great and have hardly no prospects of wage increases.

It's a difficult choice for people these days. I was thinking to my self, will interest rates remain at such low levels for the next 34 years of their mortgage?

Only thing that will bring property prices in Ireland down is interest rate hikes. Don't know when they'll begin to rise, but anything can happen, so people shouldn't be stretching themselves.

loveisdivine

trobbin wrote: »

A couple I know bought their first home last year. Since they've been broke. All their income is gone each month, they didn't go on holiday last year and won't be this year either, (a group of us have done this every year) they aren't saving either. She's 31 and he's 35, they got a 35 year mortgage. All their savings went on deposit.
They both work and have no kids, their jobs aren't great and have hardly no prospects of wage increases.

It's a difficult choice for people these days. I was thinking to my self, will interest rates remain at such low levels for the next 34 years of their mortgage?

Only thing that will bring property prices in Ireland down is interest rate hikes. Don't know when they'll begin to rise, but anything can happen, so people shouldn't be stretching themselves.

If they are that broke then the mortgage they took out was for too much and surely the banks wouldn't have agreed to such an amount?

We're in the process of buying our first house and the very first thing we did was put together a budget spreadsheet including every little cost we could think of to see if it's actually viable.

ongarite

The age of first time buyers is a symptom of modern society and relationships.
Average age for marriage is reaching 30 for both male and females compared to mid 20s in my parents generation.

seamus

There are two primary issues here;

1. A "lost generation" between 2008 and 2013 where there was basically zero credit available for first-time buyers so very few buying save for the lucky few with wealth families or large inheritances.

2. Pent-up demand from this "lost generation" both in term of first-time buyers and trader-uppers, getting into the property market from 2014 to present has pushed up prices beyond the reach of younger FTBs because the supply side just isn't there.

As the supply side catches up with the demand, this problem will begin to pull back and the average age of FTBs will drop again.

Tasden

ongarite wrote: »

The age of first time buyers is a symptom of modern society and relationships.
Average age for marriage is reaching 30 for both male and females compared to mid 20s in my parents generation.

But how many more couples live together long before marriage now than in the past?

bleary

I started full time work at 19 after a degree, half my school year didn't go to third level,most of those who did were finished by 20 or 21. A lot more did apprenticeships than today. At the time you could do accountancy and many more jobs through apprenticeships rather than studying full time first at a third level.
My friends kids are still studying and living at home till 24-26 as they start school later ,have transition year, gap years full 4 year degrees and usually post grads.
Most of us bought late twenties , early thirties. Considering we were in the work force at least 5 years earlier it's hardly a shocker that people will be older buying.They'll also have to retire later to make up those working years.

Tasden

bleary wrote: »

I started full time work at 19 after a degree, half my school year didn't go to third level,most of those who did were finished by 20 or 21. A lot more did apprenticeships than today. At the time you could do accountancy and many more jobs through apprenticeships rather than studying full time first at a third level.
My friends kids are still studying and living at home till 24-26 as they start school later ,have transition year, gap years full 4 year degrees and usually post grads.
Most of us bought late twenties , early thirties. Considering we were in the work force at least 5 years earlier it's hardly a shocker that people will be older buying.They'll also have to retire later to make up those working years.

The recession had a lot to do with that shift as well. I had my degree over and done with by 20 but couldn't get work in the field I studied for years afterwards. Had to work multiple unstable ****ty part time jobs.

SarahMollie

ongarite wrote: »

The age of first time buyers is a symptom of modern society and relationships.
Average age for marriage is reaching 30 for both male and females compared to mid 20s in my parents generation.

I read recently that its now 31 for women and 33 for men.

My parents married at 21 and 23 respectively so times have certainly changed.

Also, financially its a lot for couples to pay for a wedding and save for a deposit at the time time, so its not surprising that buying may get put on the long finger. Of course, you don't have to have a big wedding, but a lot of people still do.

imitation

I think people live very different lives now too, compared to the 80s when people brought in their 20s. Back then most people left school and got a job, got married and had kids all in their 20s, there was no University, no gap year, work experience abroad or going back to do a postgraduate.

Of course the price vs wages, lack of supply and bank loans don't help either.

slowjoe17

trobbin wrote: »

A couple I know bought their first home last year. Since they've been broke. All their income is gone each month, they didn't go on holiday last year and won't be this year either, (a group of us have done this every year) they aren't saving either. She's 31 and he's 35, they got a 35 year mortgage. All their savings went on deposit.
They both work and have no kids, their jobs aren't great and have hardly no prospects of wage increases.

It's a difficult choice for people these days. I was thinking to my self, will interest rates remain at such low levels for the next 34 years of their mortgage?

Only thing that will bring property prices in Ireland down is interest rate hikes. Don't know when they'll begin to rise, but anything can happen, so people shouldn't be stretching themselves.

Wage inflation.

The cost of their mortgage payment is static for a given interest rate. Under normal circumstances, they can expect to get annual pay rises which will make the mortgage significantly easier to handle in 10 years time. And there is no reason for them not to get a better job over time.

But it sounds to me very much like they are saving hard to start a family and telling white lies about not being able to afford a mortgage.

murphaph

It's 40 over here in Germany now. Was 37.5 10 years ago apparently. http://news.immowelt.de/n/2445-durchschnittsalter-40-immobilienkaeufer-werden-immer-aelter.html

MarkAnthony

I don't really see an issue with mortgages until retirement, especially given if you rent you pay that until you die.

My parents paid a mortgage until retirement (60/65) perhaps a bit over. I don't intend on retiring until I'm in my 70s so I don't really see an issue paying one until 65 (I believe both my mortgages expire then). I'll probably trade up at some point to the forever home and if I'm financially successful then I'll pay it off earlier - if not then I'll have to wait.

Incidentally while I'm sure some banks lend until 70 IIRC most limit it to 65ish.

TMM12

loveisdivine wrote: »

If they are that broke then the mortgage they took out was for too much and surely the banks wouldn't have agreed to such an amount?

We're in the process of buying our first house and the very first thing we did was put together a budget spreadsheet including every little cost we could think of to see if it's actually viable.

Have to agree here. We bought our first house last year I was 23, partner was 25. We were living in small apartment paying 700 euro when we found out we were expecting. Only one wage as I was completing a degree. AIB and PTSB offered us 140,000 which we had no intentions of spending. Instead we bought a 89,000 house, mortgage of 81,880. (I know we were very lucky to buy at right time.)
We could have easily went with the higher loan offer but knew from budgeting that it wouldn't work if my partner lost job.

4ensic15

When I was in my 20s a standard mortgage was 20 years. Many people had their mortgages substantially paid off by 40. Some idiots then re-mortgaged to give their children a deposit to "get them on the ladder". In a lot of cases old and young fell off the ladder completely in the recession. The property market is cyclical and has been for centuries. The marriage age has risen and fallen over time as well. People should not worry about what age they are but should time the purchase at the optimal point in the cycle. I bought my house at the end of a recession going into the uplift. I got credit that hadn't been available to me 6 months earlier and didn't have to pay the much higher prices that would have been necessary 6 months later.

athtrasna

Recent thread on this http://www.boards.ie/vbulletin/showthread.php?p=99652233

Hollister11

athtrasna wrote: »

Recent thread on this http://www.boards.ie/vbulletin/showthread.php?p=99652233

My thread

Forgot about that.

gaius c

Canadel wrote: »

34 is still quite young by today's standards.

The real issue isn't the age of buying your first home going up, it's being stuck in an exploitative, dysfunctional rental market in the mean time. Obviously that relates to the first property point in that people have less savings. But a lot of people also value flexibility and freedom and would not be interested in buying a home until their late 30s/40s.

34 is extremely old in the context of a "ladder" market where you buy a property unsuitable for your needs in the hope that the increase in value later enables you to buy one more suitable for your needs. That or the blithe assumption that future increase in earning power will entirely buy the "dream home".

If we were talking about a market where people bought one house, max two and it was for life, the age wouldn't be such a talking point.

MarkAnthony

gaius c wrote: »

34 is extremely old in the context of a "ladder" market where you buy a property unsuitable for your needs in the hope that the increase in value later enables you to buy one more suitable for your needs. That or the blithe assumption that future increase in earning power will entirely buy the "dream home".

If we were talking about a market where people bought one house, max two and it was for life, the age wouldn't be such a talking point.

Meh, both sides of my family did it. Less so on my side more so on the in laws side. That said they're middle class professionals with defined career paths, whereas my parents are working class.

To me it was completely normal moving 3 or 4 times but it seems to be different here.

Canadel

gaius c wrote: »

34 is extremely old in the context of a "ladder" market where you buy a property unsuitable for your needs in the hope that the increase in value later enables you to buy one more suitable for your needs. That or the blithe assumption that future increase in earning power will entirely buy the "dream home".

If we were talking about a market where people bought one house, max two and it was for life, the age wouldn't be such a talking point.

I think the idea of a property ladder is quite old fashioned. You know, you here various media and right wing commentators talk about the Irish "obsession with property" and it's usually in relation to the family who just want to own their own home but are being priced out of ever doing so. But really it applies to people obsessed with getting on the "property ladder" and acquiring one and two and three properties. What we need is increased supply and affordable housing for those who want to own a home. And of course it will alleviate the pressure on the rental market for those who do not wish to buy.

Young people nowadays, right up to their late 20s and 30s, value the freedom and flexibility that life can offer, and that perhaps their parents didn't have the opportunity to experience.

MarkAnthony

Canadel wrote: »

But really it applies to people obsessed with getting on the "property ladder" and acquiring one and two and three properties.

That's a different definition to the one I'd say is traditionally applied. The general property ladder would be a 2 bed house or apartment in urban areas, then trading up to a three bed then to something larger with potential intermediate steps.

ampleforth

trobbin wrote: »

A couple I know bought their first home last year. Since they've been broke. All their income is gone each month, they didn't go on holiday last year and won't be this year either, (a group of us have done this every year) they aren't saving either. She's 31 and he's 35, they got a 35 year mortgage. All their savings went on deposit.
They both work and have no kids, their jobs aren't great and have hardly no prospects of wage increases.

I can only agree. If they selected a mortgage that broke them, they obviously have done a poor job in organizing their finances. Also, the bank has done a poor job in calculating their affordability long-term. I find that banks in Ireland generally do a good job to preventing that, since their generally careful attitude (perhaps after having learnt that handing out money to easy has trouble pre-programmed) and generally run good models to prevent that (i.e. by testing if +2% still mean buyers can pay their mortgage while maintaining their lifestyle). I am not sure what the particular circumstances where, but this demonstrates some serious mistakes.

ampleforth

murphaph wrote: »

It's 40 over here in Germany now.

+1 Most of my friends in Germany are 40 when they buy first. Over there it is true that many cities have very expensive homes but the main issue, I think, is the false believe of flexibility (for those who have a stable city or home) that makes them postpone their first buy and makes them keep paying rent. The other reason is a altered lifestyle where one simply does not know where to buy because locations change and the decision for the home is postponed with it.

Lux23

I am 34 now and I reckon I am at least two years off buying a house. But sure I will be working till I am 67 so will probably work out.

Monife

Will Banks only give you a mortgage term to retirement? I know the normal term is 30 years now however by the time my husband and I could afford to buy, he will be in his early forties. So for example, if we buy when he is 43 and retirement is 68, does that mean we would only be able to get a 25 year mortgage term?

jester77

ampleforth wrote: »

+1 Most of my friends in Germany are 40 when they buy first. Over there it is true that many cities have very expensive homes but the main issue, I think, is the false believe of flexibility (for those who have a stable city or home) that makes them postpone their first buy and makes them keep paying rent. The other reason is a altered lifestyle where one simply does not know where to buy because locations change and the decision for the home is postponed with it.

What is this false belief? There is actual flexibility in renting in Germany, that is why most choose to do so. It is very easy to move when you change jobs, or the family members grow/move out, etc. Most people that buy do so because they start a family, and it is it not easy living in an apartment with kids due to how sensitive German people are to noise and the all the rules around it.

seamus

Monife wrote: »

Will Banks only give you a mortgage term to retirement? I know the normal term is 30 years now however by the time my husband and I could afford to buy, he will be in his early forties. So for example, if we buy when he is 43 and retirement is 68, does that mean we would only be able to get a 25 year mortgage term?

In general, yes.

Basically it's under the assumption that your income will drop at that point to a fixed pension income, which won't be enough to both live on and service a mortgage.

Mortality is also an issue; if you could get a mortgage to 77, you'll have difficulty convincing an insurer to provide mortgage protection up to that age.

There are other issues at play there - I'm sure banks would be more than happy to keep you indentured as long as possible, but they would be lambasted by the regulator for extending the mortgage period into retirement.

There are some circumstances that you can come to an arrangement with banks to go longer, but they often require a bit of red tape and significant guarantees and collateral.

[Deleted User]

SarahMollie wrote: »

Also, financially its a lot for couples to pay for a wedding and save for a deposit at the time time, so its not surprising that buying may get put on the long finger. Of course, you don't have to have a big wedding, but a lot of people still do.

Just reading that and thinking of my own group of friends 3 of my friends who got married recently (all big weddings) were buying their house and arranging the wedding at the same time. one of the couples only moved in after the honeymoon, one couple a week before the wedding and the other a month before it. First time living together too for all three couples.

So it is doable but certainly not easy I would imagine. The fact almost all were living at home up to moving into their own places made things easier though that's for sure especially with rents gone the way they are.

Canadel wrote: »

Young people nowadays, right up to their late 20s and 30s, value the freedom and flexibility that life can offer, and that perhaps their parents didn't have the opportunity to experience.

This is exaggerated a lot imo. Most people would still buy if they were in a position to do so. The numbers of people who choose to rent for flexibility would be small, the majority of people want to get into a stable job, settle down and buy but this is more difficult nowadays than it was and its this difficulty that means more people rent for longer rather than wanting flexibility.