Is The Property Market Unfair to First Time Buyers?

Bluefoam · 26-10-2020 7:15pm #1

PropQueries wrote: »

Well the housing minister said in July: “You’ll know that for 2020, the target was to deliver 11,167 social homes through the Build, Acquisitions and Leasing programmes combined,” O’Brien said.“

That’s a lot of government purchases/leases in the private market, directly competing with first time buyers, especially given how little dedicated social housing they’re building.

Basically, the government is the housing market now and they’re taxing/ will be taxing younger workers more and more to continue outbidding them for housing in the marketplace. Basically younger workers are funding their main competitor in the marketplace i.e. the government. Hard to win a bidding war against them IMO.

Link here: https://www.thejournal.ie/housing-minister-local-authorities-buy-up-new-properties-5155602-Jul2020/

Oh, I thought we were discussing the *imminent crash... It seems what we are actally discussing is how unfair it is on first time buyers...

And while I do feel bad for first time buyers allot of the time... It has always been difficult to get on the property ladder... However, as I said earlier, there are some people wishing us into a property crash, because they think it's an opportunity for them... That's a short sighted view.

I do wonder to myself, when I hear coworkers complaining about no being able to afford their first house at the age of 35+, and then a minute later telling you how they are replacing their two year old car with the newer version that costs 35k each time... While they're playing on their latest model iPhone...

Yes it's difficult, but it can be done... Is it fair? Probably not... But if it's what you want, get on with it... Just get it done, however long it takes. If you want other things, then put resources into them.

PropQueries · 26-10-2020 7:32pm

Bluefoam wrote: »

Oh, I thought we were discussing the *imminent crash... It seems what we are actally discussing is how unfair it is on first time buyers...

And while I do feel bad for first time buyers allot of the time... It has always been difficult to get on the property ladder... However, as I said earlier, there are some people wishing us into a property crash, because they think it's an opportunity for them... That's a short sighted view.

I do wonder to myself, when I hear coworkers complaining about no being able to afford their first house at the age of 35+, and then a minute later telling you how they are replacing their two year old car with the newer version that costs 35k each time... While they're playing on their latest model iPhone...

Yes it's difficult, but it can be done... Is it fair? Probably not... But if it's what you want, get on with it... Just get it done, however long it takes. If you want other things, then put resources into them.

Well they work hard and deserve their high salaries. There’s this nonsense in the country at the moment that just because they earn high salaries they should then pay more than market price i.e. the price they would be paying if the government wasn’t continuously outbidding them for a home to either buy or rent.

I think you’ll agree that it’s the government purchases/leases (paid with borrowed money) that is keeping house prices/rents high.

This will stop sooner than many people realise and that’s probably when the real major crash will happen. The governments removal from the market through either not being able to borrow any more or not needing social housing anymore (that’s very possible in my opinion and may happen sooner than many people realise) will be equivalent (probably worse) to the banking bust over 10 years ago.

Dwarf.Shortage · 26-10-2020 7:41pm

Bluefoam wrote: »

Oh, I thought we were discussing the *imminent crash... It seems what we are actally discussing is how unfair it is on first time buyers...

And while I do feel bad for first time buyers allot of the time... It has always been difficult to get on the property ladder... However, as I said earlier, there are some people wishing us into a property crash, because they think it's an opportunity for them... That's a short sighted view.

I do wonder to myself, when I hear coworkers complaining about no being able to afford their first house at the age of 35+, and then a minute later telling you how they are replacing their two year old car with the newer version that costs 35k each time... While they're playing on their latest model iPhone...

Yes it's difficult, but it can be done... Is it fair? Probably not... But if it's what you want, get on with it... Just get it done, however long it takes. If you want other things, then put resources into them.

I assume they're eating avocado toast as they tell you all this?

Stark · 26-10-2020 7:48pm

Sure you can buy a house for 350 iPhones.

jill_valentine · 26-10-2020 7:57pm

Bluefoam wrote: »

I do wonder to myself, when I hear coworkers complaining about no being able to afford their first house at the age of 35+, and then a minute later telling you how they are replacing their two year old car with the newer version that costs 35k each time... While they're playing on their latest model iPhone...

I literally don't know a single person who has ever bought a car new, but iPhones come as part of contracts.

Giving you benefit of the doubt though - being able to get either of these things would have effectively no implications for your mortgage facilitated buying power anyway, which is almost completely dictated by the salary cap. You would be saving your entire career and not make up the difference in buying power the salary cap has hobbled you with.

cnocbui · 26-10-2020 8:09pm

I'd hazzard a guess he was referencing the lack of financial discipline exhibited by the 'I'm worth it' crowd.

I never took an overseas holiday while saving for my deposit and I drove the same used car for 12 years and did my own maintaince on it. There weren't any mobile phones then, but had there been, no way would I get one on contract. A used phone, PAYG, no data and watch the calls.

Bluefoam · 26-10-2020 8:15pm

Jaysus calm down everyone, I'm not the enemy... I've just spent ten years getting back on my feet. Sold my home in the last recession and had to pay off that debt before competing with the government to buy a tiny house.... I'm not a high earner, just an average buyer.

My point is that it is possible. I gave up literally everything to get here, but that was my priority.

Dwarf.Shortage · 26-10-2020 8:59pm

cnocbui wrote: »

I'd hazzard a guess he was referencing the lack of financial discipline exhibited by the 'I'm worth it' crowd.

I never took an overseas holiday while saving for my deposit and I drove the same used car for 12 years and did my own maintaince on it. There weren't any mobile phones then, but had there been, no way would I get one on contract. A used phone, PAYG, no data and watch the calls.

Is there a parcel motel near you? there's a medal here burning a hole in my pocket.

You can get a plan with unlimited calls and data for €7.99 a month so the concept of going without data in 2020 to try buy a house is just austerity porn. It's an irrelevant level of expense for something most people get enormous value from.

FTB's will be told to start going splits with a mate on a pair of shoes and both hop around the place next.

Taylor365 · 26-10-2020 9:28pm

cnocbui wrote: »

I'd hazzard a guess he was referencing the lack of financial discipline exhibited by the 'I'm worth it' crowd.

I never took an overseas holiday while saving for my deposit and I drove the same used car for 12 years and did my own maintaince on it. There weren't any mobile phones then, but had there been, no way would I get one on contract. A used phone, PAYG, no data and watch the calls.

No mobile phones. Right I'll go with he 80s:

Average wage of £8,000-15,000 a year.
Dublin 3 bed cost about £30,000.

Now:

Average wage of €30,000-50,000 a year.
Dublin 3 bed cost about €400,000.

Donald Trump · 26-10-2020 9:54pm

Taylor365 wrote: »

No mobile phones. Right I'll go with he 80s:

Average wage of £8,000-15,000 a year.
Dublin 3 bed cost about £30,000.

Now:

Average wage of €30,000-50,000 a year.
Dublin 3 bed cost about €400,000.

You would also have to adjust for tax rates there as well. It might not make a huge difference, but it might make a bit of a difference!

Dwarf.Shortage · 26-10-2020 9:54pm

Taylor365 wrote: »

No mobile phones. Right I'll go with he 80s:

Average wage of £8,000-15,000 a year.
Dublin 3 bed cost about £30,000.

Now:

Average wage of €30,000-50,000 a year.
Dublin 3 bed cost about €400,000.

This is the bit the austerity porn crowd refuse to engage with. That if you're on the average industrial wage in 2020 you can save what you want, you won't be able to buy a house.

Donald Trump · 26-10-2020 9:57pm

Dwarf.Shortage wrote: »

This is the bit the austerity porn crowd refuse to engage with. That if you're on the average industrial wage in 2020 you can save what you want, you won't be able to buy a house.

There are limits though. There are a lot of people who fritter away money on shite. Real disposable income is a far higher proportion of peoples gross income these days.

Dwarf.Shortage · 26-10-2020 10:15pm

Donald Trump wrote: »

There are limits though. There are a lot of people who fritter away money on shite. Real disposable income is a far higher proportion of peoples gross income these days.

If you are on the average industrial wage in this country you can get a maximum mortgage of €133k, the average house price is €267,000.

Can you imagine how frustrating it is to need a €134,000 deposit to buy the average house, despite being on the average industrial wage, and to have people who bought in the 80s and pulled the ladder up after them tell you that your problem is that you have an iPhone?

It's f**king nonsense.

cnocbui · 26-10-2020 10:16pm

Dwarf.Shortage wrote: »

Is there a parcel motel near you? there's a medal here burning a hole in my pocket.

You can get a plan with unlimited calls and data for €7.99 a month so the concept of going without data in 2020 to try buy a house is just austerity porn. It's an irrelevant level of expense for something most people get enormous value from.

FTB's will be told to start going splits with a mate on a pair of shoes and both hop around the place next.

Is the medal worth much? If so, I'll happily take it and sell it and add the proceeds to my next house to buy fund. Avocados are 69c in Lidl and a slice of toast would hardly be 3c, i'd imagine, so cheap snack/meal. That 48.ie plan is really good value, thanks, I'll probably subscibe.

jill_valentine · 26-10-2020 10:27pm

cnocbui wrote: »

I'd hazzard a guess he was referencing the lack of financial discipline exhibited by the 'I'm worth it' crowd.

I never took an overseas holiday while saving for my deposit and I drove the same used car for 12 years and did my own maintaince on it. There weren't any mobile phones then, but had there been, no way would I get one on contract. A used phone, PAYG, no data and watch the calls.

I'm laughing at this post because I can't recall the last time I left the province, never mind the country, and I don't own a car. My phone is used for work, so contract works out significantly cheaper.

These posts are mad, it's like the Torys in the UK asking why people won't just sell their pearls, just completely unmoored from the fundamental economics of 2020 -

No amount of saving on the average wage will put you in reach of a mortgage that will buy you the average house. If you never bought another phone or filled a petrol tank, you still won't be able to change the salary cap.

The median private sector wage of about 31k can get a mortgage topping out at about 110k. Even if you didn't buy food, pay rent or use a single bus, you will not save the difference between your available mortgage and what a house would actually cost. No amount of packed lunches are going to save 150k.

Bubbaclaus · 26-10-2020 10:34pm

The average full time wage in Ireland is 49k. People using lower figures are including part time workers which bring down the average.

I don't think a single part time worker was ever in a position to buy their own home, in any era of the State.

Dwarf.Shortage · 26-10-2020 10:42pm

Bubbaclaus wrote: »

The average full time wage in Ireland is 49k. People using lower figures are including part time workers which bring down the average.

I don't think a single part time worker was ever in a position to buy their own home, in any era of the State.

Average industrial wage is €38k.

PHG · 26-10-2020 10:52pm

Dwarf.Shortage wrote: »

Average industrial wage is €38k.

But the average wage is as per Bubbaclaus comment. Average combined wage would be €98k.

Adjust for region obviously

Dwarf.Shortage · 26-10-2020 11:00pm

PHG wrote: »

But the average wage is as per Bubbaclaus comment. Average combined wage would be €98k.

Adjust for region obviously

More than capable of doubling 49 but thank you.

The average wage, like the mean of any highly variable data set, is skewed much higher by the ultra high earners. The median would be a much more appropriate figure and it would be much closer to the average industrial but from what I can tell isn't available. The average industrial wage does not include part time workers which is exactly why I use it. It ignores the extremes at both ends of the distribution.

If Jeff Bezo's walked into a bar the average person in the bar would be a billionaire etc.

PHG · 26-10-2020 11:20pm

Dwarf.Shortage wrote: »

More than capable of doubling 49 but thank you.

The average wage, like the mean of any highly variable data set, is skewed much higher by the ultra high earners. The median would be a much more appropriate figure and it would be much closer to the average industrial but from what I can tell isn't available. The average industrial wage does not include part time workers which is exactly why I use it. It ignores the extremes at both ends of the distribution.

If Jeff Bezo's walked into a bar the average person in the bar would be a billionaire etc.

Yes I know what median and can sort of see your point but nobody can say use the average house price in the country use it against median wage. It all has to be done on a regional basis.

If you take say the average wage in a region then take the average house price though skewed. If you take the median wage take the median house price.

We can't take the salary of a public or private worker working in Mayo and compare it against them potentially buying a house in Dublin.

Dwarf.Shortage · 26-10-2020 11:34pm

PHG wrote: »

Yes I know what median and can sort of see your point but nobody can say use the average house price in the country use it against median wage. It all has to be done on a regional basis.

If you take say the average wage in a region then take the average house price though skewed. If you take the median wage take the median house price.

We can't take the salary of a public or private worker working in Mayo and compare it against them potentially buying a house in Dublin.

Yeah no I completely agree, regional disparities disappear in analysis based on overall national averages.

But I think it's fair to say averages workers are struggling to buy houses nationwide. The extent of the struggle might vary regionally but it's a national issue.

cnocbui · 26-10-2020 11:41pm

jill_valentine wrote: »

I'm laughing at this post because I can't recall the last time I left the province, never mind the country, and I don't own a car. My phone is used for work, so contract works out significantly cheaper.

These posts are mad, it's like the Torys in the UK asking why people won't just sell their pearls, just completely unmoored from the fundamental economics of 2020 -

No amount of saving on the average wage will put you in reach of a mortgage that will buy you the average house. If you never bought another phone or filled a petrol tank, you still won't be able to change the salary cap.

The median private sector wage of about 31k can get a mortgage topping out at about 110k. Even if you didn't buy food, pay rent or use a single bus, you will not save the difference between your available mortgage and what a house would actually cost. No amount of packed lunches are going to save 150k.

I agree with what you are saying, but so many people go on about housing inaffordability in Dublin as if it were a provincial city, not the capital city of a country with a significant multinational employer presence and the competitive advantage in buying power given their employees. As I have many times pointed out, housing is expensive in capital cities world wide. People on lowish wages can't afford to buy houses in London, either.

My ex managed to buy a reasonably renovated 2 bedroom house within a 10 minute walk of Limerick city centre for €100,000 in 2012. More sheer luck than skill in timing the bottom of the market.

You can currently get a single bedroom apartment in Limerick for €70 K (haven't looked for better, literally picked the second result from the search)

I am sure a suggestion of looking for work and accommodation outside Dublin will be as well received as that of thrift.

In Dublin, I believe government taxes and council charges make up a significant portion of the cost of new residential accomodation:

Development Levies (Levies, Electricity, Gas and Water) - €123psm (€11psf) Connection fees associated with Local Authority foul and surface water, gas, electricity and water connection fees. Levies are a very significant “on-cost” in the provision of housing, the costs of which have to be borne from early in the construction cost cycle

Value-Added Tax – €387psm (€36psf)The total VAT for this average house figure is € 44,164. All new homes will include a VAT charge of 13.5%. The VAT take on an average 3-bedroom semi is 12% of the total delivery cost. By way of comparison, new house sales in Northern Ireland and the UK attract zero VAT rates.

https://www.scsi.ie/documents/get_lob?id=1551&field=file

IMO, succesive Irish governements have been utterly weded to the idea of low taxation for corporations, resulting in high taxation of individuals. The policy skew contributes to the high taxation and cost of housing.

Then there's the nonsense of 'social housing', competing with FTBs and low corporate taxation for property funds, which encourages them to compete in the housing market.

A very large part of Dublin house prices can be blamed on the government.

Donald Trump · 26-10-2020 11:51pm

Dwarf.Shortage wrote: »

If you are on the average industrial wage in this country you can get a maximum mortgage of €133k, the average house price is €267,000.

Can you imagine how frustrating it is to need a €134,000 deposit to buy the average house, despite being on the average industrial wage, and to have people who bought in the 80s and pulled the ladder up after them tell you that your problem is that you have an iPhone?

It's f**king nonsense.

Yeah but your house today has a lot more in it than a house in the 80's. People moved into their houses in the 1980's and did up one room at a time over a few years.

And what of the cost of servicing that mortgage?

The average person should surely be able to save 100k by their 30th birthday should they not? With a bit of effort? No? A couple looking to buy a house at age 30 could have 150k saved between them? Unrealistic or not? Would be less than 200 quid a week to put away.

Edit: Assuming they go to college and start work at 22.

Geuze · 27-10-2020 12:09am

Dwarf.Shortage wrote: »

Average industrial wage is €38k.

AIW not published anymore.

https://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2019/

2019 data, for all earnings, incl. overtime and bonuses

Average earnings = 40,283

Average earnings of FT workers = 48,946

Average earnings in Industry = 47,104 (all workers in Industry)

Note that the average earnings of mortgage applicants are higher again.

27-10-2020 1:05am

Donald Trump wrote: »

The average person should surely be able to save 100k by their 30th birthday should they not? With a bit of effort? No? .

People who still have their communion money maybe, not your average 30 year old.

Dwarf.Shortage · 27-10-2020 1:51am

Geuze wrote: »

AIW not published anymore.

https://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2019/

2019 data, for all earnings, incl. overtime and bonuses

Average earnings = 40,283

Average earnings of FT workers = 48,946

Average earnings in Industry = 47,104 (all workers in Industry)

Note that the average earnings of mortgage applicants are higher again.

Of course they are, someone on the average wage hasn't a hope in hell of buying a house why would they apply for a mortgage.

jill_valentine · 27-10-2020 9:37am

Donald Trump wrote: »

The average person should surely be able to save 100k by their 30th birthday should they not? With a bit of effort? No? A couple looking to buy a house at age 30 could have 150k saved between them? Unrealistic or not? Would be less than 200 quid a week to put away.

Edit: Assuming they go to college and start work at 22.

You're also assuming they haven't lived anywhere, paid any bills, and worked in unbroken employment in that time. So I would say quite unrealistic, yes.

In the real world, someone who left college ten years ago will have almost certainly been let go or had their employer go bust at least once and worked at least one zero hours contract in that time, a period when they would have been glad to get 200 a week, never mind save it.

For perspective, ten years ago I was working in a video game shop sifting through CVs from engineers and chemists. I got a quote for car insurance around the same time for 7 grand a year, and we all spent quite a lot of time in the work kitchen when we were off because the tea and bread was free.

100k savings for a post 2007 thirty year old is fantasy land. Under present conditions most people in that age group will have their first shot at home ownership when their parents die.

KennisWhale · 27-10-2020 11:07am

jill_valentine wrote: »

You're also assuming they haven't lived anywhere, paid any bills, and worked in unbroken employment in that time. So I would say quite unrealistic, yes.

In the real world, someone who left college ten years ago will have almost certainly been let go or had their employer go bust at least once and worked at least one zero hours contract in that time, a period when they would have been glad to get 200 a week, never mind save it.

For perspective, ten years ago I was working in a video game shop sifting through CVs from engineers and chemists. I got a quote for car insurance around the same time for 7 grand a year, and we all spent quite a lot of time in the work kitchen when we were off because the tea and bread was free.

100k savings for a post 2007 thirty year old is fantasy land. Under present conditions most people in that age group will have their first shot at home ownership when their parents die.

I left college 9 years ago and didn't get a proper paying job (just had a part-time pub job) for 2 years. The salary was 1700 so after I paid rent and bills I always had 900 left. It took 2 years to get a salary bump of 500 per month, which was nice, but unfortunately my new rent took 200 of that 500! The last 4 years the salary has been good so I have luckily been able to save good money despite rent climbing further but 100k savings? Not even close. Halve it and add in the other half's savings and you will get a more realistic figure!

nerrad01 · 27-10-2020 12:56pm

Its a simple supply and demand issue, not enough properties and still enough people in secure well paid employment to keep the prices sustained. I cant see this changing, and i had previously been convinced we would be in for a crash.

The rental market on the other hand is in for a major correction (or at least should be if the reits were made pay tax on all those vacant properties they are using to price fix the rental market with). What effect this will have, if any, on the purchasing market is anyones guess

DellyBelly · 27-10-2020 4:20pm

[QUOTE=
100k savings for a post 2007 thirty year old is fantasy land. Under present conditions most people in that age group will have their first shot at home ownership when their parents die.[/QUOTE]

I would disagree with that. I know plenty of people in their early 30s who would have more than 100k in savings. Some of course is via inheritance but mostly though saving hard. A person on 80k plus (which is average enough in Dublin) should be able to save this with a bit of disciplince

Cantstandsya · 27-10-2020 6:14pm

DellyBelly wrote: »

I would disagree with that. I know plenty of people in their early 30s who would have more than 100k in savings. Some of course is via inheritance but mostly though saving hard. A person on 80k plus (which is average enough in Dublin) should be able to save this with a bit of disciplince

Is this post a joke?

Is The Property Market Unfair to First Time Buyers?

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