Medium & Long Term Property Market Chat

Wanderer78 · 29-09-2020 4:42pm

schmittel wrote: »

Apologies, I’m probably as thick as mince, but I am just not following this train of conversation, so I give up!

dont worry, none of this makes any sense anyway, but we do truly need to take our heads out of the sand, as it looks like everyone's gonna get screwed if we continue as is

neutral guy · 29-09-2020 8:38pm

For those who does not follow and does not believe repossessions will start next year

The brainwashing process trying prepare public for changes started

Mortgage arrears mean thousands of families 'face losing their houses'

https://www.independent.ie/business/personal-finance/property-mortgages/mortgage-arrears-mean-thousands-of-families-face-losing-their-houses-39571224.html

The deputy governor of the Central Bank, Ed Sibley, has indicated that it should be easier for banks to repossess homes or otherwise take security on loans if the mortgage market in Ireland is to function properly again.

https://www.independent.ie/business/personal-finance/no-single-fix-for-distressed-loans-warns-central-banks-ed-sibley-39571088.html

Independent by my own opinion is the lobby source used to put pressure on government decisions

Banks moving to tailored approach on payment breaks - Sibley

https://www.rte.ie/news/business/2020/0929/1168129-sibley-on-ending-of-payment-breaks/

This is only some from very first places and only for today

I pretty sure public opinion creation to start repossessions started.

neutral guy · 29-09-2020 8:44pm

There will enough to FG and FF tell to young SF supporters that they can not buy house because people does not pay mortgages
And believe me SF supporters will start repossessions them self throwing non payers from them houses.
Well known political games.

brisan · 29-09-2020 9:01pm

schmittel wrote: »

On airbnb, yes I agree it is possible the market/covid will sort that problem. I just expected/hoped the new government would strike whilst the iron was hot and kill it off now - don't waste a good crisis as they say.

On demographics - it is key plank in my long term oversupply theory! I really think the government should be focussing on this - what accommodation do the young and the old need? Use tax incentives to drive development of that, and generous tax incentives to downsize - eg increased CAT thresholds/income tax reductions whatever.

This will increase supply for those in the middle i.e families with 2.4 children. At the moment all the talk is of building 30k family homes a year for the next decade, which will end up with the wrong types of houses in the wrong places.

I know my mother would love a small apt
At 81 she finds a 3 bedroom extended house a bit big o manage on her own and has given up to a large extent on the garden ,so we have to do that for her
Heating costs do not help.
Yhere are nice apts in the area ,only problem is a lot are rentals
If specific apts were built purely for owner occupiers over 60 with no rentals and no children allowed (except as guests) in her area then a lot of people would be interested
Apts would be sold back to company at market price when resident moves on and sold back to tenants of the same status
Not sure if discrimination laws would be broken though
It would free up a lot of family homes if they were built in targeted areas

Ipro · 29-09-2020 9:12pm

brisan wrote: »

I know my mother would love a small apt
At 81 she finds a 3 bedroom extended house a bit big o manage on her own and has given up to a large extent on the garden ,so we have to do that for her
Heating costs do not help.
Yhere are nice apts in the area ,only problem is a lot are rentals
If specific apts were built purely for owner occupiers over 60 with no rentals and no children allowed (except as guests) in her area then a lot of people would be interested
Apts would be sold back to company at market price when resident moves on and sold back to tenants of the same status
Not sure if discrimination laws would be broken though
It would free up a lot of family homes if they were built in targeted areas

Such apartment blocks already exist and work quite well. Deffinatly something worth looking into.

Hubertj · 29-09-2020 9:12pm

brisan wrote: »

I know my mother would love a small apt
At 81 she finds a 3 bedroom extended house a bit big o manage on her own and has given up to a large extent on the garden ,so we have to do that for her
Heating costs do not help.
Yhere are nice apts in the area ,only problem is a lot are rentals
If specific apts were built purely for owner occupiers over 60 with no rentals and no children allowed (except as guests) in her area then a lot of people would be interested
Apts would be sold back to company at market price when resident moves on and sold back to tenants of the same status
Not sure if discrimination laws would be broken though
It would free up a lot of family homes if they were built in targeted areas

There is a development on Pembroke road that is only for owner occupiers and over 55s I think. Pricey but good idea. https://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/over-55s-only-three-bed-apartment-in-d4-for-595k-1.4103306

brisan · 29-09-2020 9:19pm

Hubertj wrote: »

There is a development on Pembroke road that is only for owner occupiers and over 55s I think. Pricey but good idea. https://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/over-55s-only-three-bed-apartment-in-d4-for-595k-1.4103306

600k and its 3 bed
300k and a 2 bed and she would jump at it ,as long as maintenance fees wee kept reasonable

7K a year maintenance fees
Only for the rich and famous

Ipro · 29-09-2020 11:02pm

brisan wrote: »

600k and its 3 bed
300k and a 2 bed and she would jump at it ,as long as maintenance fees wee kept reasonable

7K a year maintenance fees
Only for the rich and famous

https://www.myhome.ie/residential/brochure/6-arranmore-13-17-pembroke-road-ballsbridge-dublin-4-d04-dd73/4325063

1 bed for €250k if it’s any help.

Might move in myself!

neutral guy · 30-09-2020 12:59pm

Ipro wrote: »

https://www.myhome.ie/residential/brochure/6-arranmore-13-17-pembroke-road-ballsbridge-dublin-4-d04-dd73/4325063

1 bed for €250k if it’s any help.

Might move in myself!

Badly looking place the kitchen just terrible.

awec · 30-09-2020 2:26pm

neutral guy wrote: »

Badly looking place the kitchen just terrible.

The kitchen is entirely superficial though.

neutral guy · 30-09-2020 8:39pm

awec wrote: »

The kitchen is entirely superficial though.

Typical open prison.For parents ! For everything they did !

brisan · 01-10-2020 7:02pm

neutral guy wrote: »

Typical open prison.For parents ! For everything they did !

That has to rank up there with one of the most ridiculous posts you have ever posted
And believe me it has some serious competition
My 80 year old mother does not want a 3 bedroom extended house with 2 bathrooms and gardens and all the work and expense that entails
Her social life is too hectic to be doing housework and gardening
A small 2 bed apartment with security and somewhere for the younger grandkids to spend the odd night would suit her down to the ground
Once it was within her parish

neutral guy · 01-10-2020 8:25pm

brisan wrote: »

That has to rank up there with one of the most ridiculous posts you have ever posted
And believe me it has some serious competition
My 80 year old mother does not want a 3 bedroom extended house with 2 bathrooms and gardens and all the work and expense that entails
Her social life is too hectic to be doing housework and gardening
A small 2 bed apartment with security and somewhere for the younger grandkids to spend the odd night would suit her down to the ground
Once it was within her parish

We have different understandings then
My 70 years old mother love gardening and she cant imagine dinner without home grow cucumbers/tomatoes/onions/etc
She cant imagine live without home grow cherries and strawberies jam.
She doesnt come to church every Sunday
She will die in your type of property within couple of weeks.

Hubertj · 01-10-2020 9:12pm

neutral guy wrote: »

We have different understandings then
My 70 years old mother love gardening and she cant imagine dinner without home grow cucumbers/tomatoes/onions/etc
She cant imagine live without home grow cherries and strawberies jam.
She doesnt come to church every Sunday
She will die in your type of property within couple of weeks.

That’s fine but no need to make a stupid comment referring to an apartment as an open prison. You’re not stupid so it was definitely a comment intended to elicit a reaction.

Hubertj · 01-10-2020 9:14pm

brisan wrote: »

That has to rank up there with one of the most ridiculous posts you have ever posted
And believe me it has some serious competition
My 80 year old mother does not want a 3 bedroom extended house with 2 bathrooms and gardens and all the work and expense that entails
Her social life is too hectic to be doing housework and gardening
A small 2 bed apartment with security and somewhere for the younger grandkids to spend the odd night would suit her down to the ground
Once it was within her parish

There is definitely an opportunity to develop this type of living for older people whether is is apartments, houses Or a mixture. Question as always will be the cost. It also provides older people the opportunity to make new friends, I know my mum was lonelier in her final years as many of her friends and sisters had passed away.

neutral guy · 01-10-2020 9:29pm

Hubertj wrote: »

That’s fine but no need to make a stupid comment referring to an apartment as an open prison. You’re not stupid so it was definitely a comment intended to elicit a reaction.

We are speak about property here !

Mods, I think this person said enough to my address to be banned for week.
Time finish this permanent online bulling !

hometruths · 02-10-2020 6:59am

Help to buy just got literal:

The minister is proposing that the new scheme, which is aimed at young professionals, will impose no salary cap for those seeking to buy a new home.

Under the scheme, a percentage of the cost of a new home will be bought by the Government. It can then be bought back later by the homeowner. They will not be required to pay back the State's stake until five years after they buy the home.

It has yet to be decided whether homeowners will have to pay interest when buying out the State's part of the house, although a source said it would be either "low or no interest".

To be announced in the budget apparently. What could possibly go wrong?

Bubbaclaus · 02-10-2020 8:25am

neutral guy wrote: »

We are speak about property here !

Mods, I think this person said enough to my address to be banned for week.
Time finish this permanent online bulling !

Pretty clear that you are on a wind up at this point.

awec · 02-10-2020 12:16pm

schmittel wrote: »

Help to buy just got literal:

To be announced in the budget apparently. What could possibly go wrong?

Almost identical to the UK scheme.

If the state buys a percentage of the house, then as the value of the house changes so does the amount you need to pay to buy them out. So after 5 years you could end up paying back more than you borrowed if the value of the property increases.

hometruths · 02-10-2020 12:24pm

awec wrote: »

Almost identical to the UK scheme.

If the state buys a percentage of the house, then as the value of the house changes so does the amount you need to pay to buy them out. So after 5 years you could end up paying back more than you borrowed if the value of the property increases.

Sounds fine in theory. And I presume if the price goes down you have to pay back less?

Hubertj · 02-10-2020 12:45pm

schmittel wrote: »

Sounds fine in theory. And I presume if the price goes down you have to pay back less?

this would be my concern. I would have thought it would be a fixed amount pegged to inflation or some boll*x like that? Protects the tax payers investment?

awec · 02-10-2020 12:45pm

schmittel wrote: »

Sounds fine in theory. And I presume if the price goes down you have to pay back less?

Yea that's the way it works in the UK.

The UK scheme is essentially they'll buy up to 20% of your house. You pay no interest on this for 5 years, but after 5 years you pay interest on the money they gave you. You do not have to pay back any capital.

You pay back the 20% of the value when you either sell the house or finish paying the mortgage. The 20% is based on the value of the house, so if the value increases the amount you have to pay increases, and vice versa.

hometruths · 02-10-2020 12:47pm

awec wrote: »

Yea that's the way it works in the UK. It's not a loan or a grant where you pay back the amount they give you with interest, rather they become a co-owner of the property and you have to buy out their percentage.

I predict this will be a disaster whether prices rise or fall.

awec · 02-10-2020 12:48pm

schmittel wrote: »

I predict this will be a disaster whether prices rise or fall.

I updated my post as it was a bit misleading.

Hubertj · 02-10-2020 12:53pm

awec wrote: »

I updated my post as it was a bit misleading.

how long has the scheme been operating in the UK do you know? Is it working?

I don't whether its a good idea or not but would be good to compare with an actual working scheme

awec · 02-10-2020 1:02pm

Hubertj wrote: »

how long has the scheme been operating in the UK do you know? Is it working?

I don't whether its a good idea or not but would be good to compare with an actual working scheme

Was introduced in 2013 I think. It was supposed to finish this year, but they extended it.

Note when I said UK, it's actually only available in England. The UK actually has numerous different HTB options.

hometruths · 02-10-2020 1:30pm

Hubertj wrote: »

this would be my concern. I would have thought it would be a fixed amount pegged to inflation or some boll*x like that? Protects the tax payers investment?

i agree - but I suppose if the government is hell bent on policies designed to push prices higher they might as well have a vested interest.

awec · 02-10-2020 1:35pm

schmittel wrote: »

i agree - but I suppose if the government is hell bent on policies designed to push prices higher they might as well have a vested interest.

The interest you pay each month (after year 5) increases every year by 1% + RPI.

hometruths · 02-10-2020 1:38pm

Hubertj wrote: »

how long has the scheme been operating in the UK do you know? Is it working?

I don't whether its a good idea or not but would be good to compare with an actual working scheme

from what I have read about the UK, the biggest beneficiaries were the housebuilders, predictably enough.

hometruths · 02-10-2020 1:39pm

awec wrote: »

The interest you pay each month (after year 5) increases every year by 1% + RPI.

I didn't know that. I presume it is capped at some level?

Is this UK or have you seen this idea floated from an Irish source?

awec · 02-10-2020 1:46pm

schmittel wrote: »

I didn't know that. I presume it is capped at some level?

Is this UK or have you seen this idea floated from an Irish source?

Sorry, this is entirely UK. I have no idea what the Irish scheme is, only that the snippet you posted sounded pretty similar to what the UK does.

On the interest rate, I don't mean it goes up by a whole 1% every year, so it's not going to go from 1.75%->2.75% between year 6 and 7, otherwise the interest would be insane.

If the RPI is like 3%, then your interest rate will increase by 4%. So the 1.75% becomes 1.82% (104% of the previous).

There is no cap, as far as I know.

Browney7 · 02-10-2020 1:52pm

awec wrote: »

Almost identical to the UK scheme.

If the state buys a percentage of the house, then as the value of the house changes so does the amount you need to pay to buy them out. So after 5 years you could end up paying back more than you borrowed if the value of the property increases.

Seems a very pro cyclical scheme to me and stores up a world of hurt in the event that property prices drop and a borrower gets into financial difficulty.

If a borrower gets a loan of 400k, and a state share of 100k on a property worth 500k (not clear how any existing help to buy or customer deposit interacts with the overall scheme), what happens if property drops by 30% to 350k and the bank have to enforce security and repossess?

Does the government write off the 150k owed by Mary and Jim the hard pressed young couple who fell on hard times who couldn't pay for their dream house in portmarnock? Is the working assumption that the buyer will get a mortgage top up at year 5 to buy out the government?

This looks like a tax payer slush fund for underwriting frothy property values and making bank LTV ratios look good too (they have a loan of 400k on a 500k property)

awec · 02-10-2020 1:59pm

Browney7 wrote: »

Seems a very pro cyclical scheme to me and stores up a world of hurt in the event that property prices drop and a borrower gets into financial difficulty.

If a borrower gets a loan of 400k, and a state share of 100k on a property worth 500k (not clear how any existing help to buy or customer deposit interacts with the overall scheme), what happens if property drops by 30% to 350k and the bank have to enforce security and repossess?

Does the government write off the 150k owed by Mary and Jim the hard pressed young couple who fell on hard times who couldn't pay for their dream house in portmarnock? Is the working assumption that the buyer will get a mortgage top up at year 5 to buy out the government?

This looks like a tax payer slush fund for underwriting frothy property values and making bank LTV ratios look good too (they have a loan of 400k on a 500k property)

Mary and Jim don't owe 150k.

The government own 20% of the property, so if it falls in value by 30% then the government's portion is worth 30% less. In such a scenario, the government owned portion would be worth 105k.

In the case of a repossession and forced sale the government will get their 30% cut of whatever is available after the bank get whatever they're owed. If that's nothing, then that's nothing. Exact same as Mary and Jim.

Browney7 · 02-10-2020 2:07pm

awec wrote: »

Mary and Jim don't owe 150k. They owe 20% of the value.

Sorry, meant 100k.

Not expecting you to know by the way, I'm more thinking through how this scheme would work! So in a stress scenario, does the bank get the full proceeds of the property sale to cover their outstanding loan or a pro rata share?

If the sale proceeds are less than the bank loan plus the government loan, who eats the loss?

If they owe 20% of the value, it's 70 grand that they can't pay, plus the 30 grand loss (the 100k advanced originally) that the taxpayer has to eat on top. Do the government hold a debt over "the hard pressed homebuyer who was doing their best?" I can't see this being a good look for the government of the day

awec · 02-10-2020 2:12pm

Browney7 wrote: »

Sorry, meant 100k.

Not expecting you to know by the way, I'm more thinking through how this scheme would work! So in a stress scenario, does the bank get the full proceeds of the property sale to cover their outstanding loan or a pro rata share?

If the sale proceeds are less than the bank loan plus the government loan, who eats the loss?

If they owe 20% of the value, it's 70 grand that they can't pay, plus the 30 grand loss (the 100k advanced originally) that the taxpayer has to eat on top. Do the government hold a debt over "the hard pressed homebuyer who was doing their best?" I can't see this being a good look for the government of the day

Yea I don't know the specifics but I am pretty sure you owe your 20% either way. If that is obtained via the sale after repossession then you are in the clear, if not then you still have a debt to the government.

What level of enforcement they'd impose I do not know.

Browney7 · 02-10-2020 2:17pm

awec wrote: »

Yea I don't know the specifics but I am pretty sure you owe your 20% either way. If that is obtained via the sale after repossession then you are in the clear, if not then you still have a debt to the government.

What level of enforcement they'd impose I do not know.

So in Ireland the debtor (who is a normal Joe) will go to media and say how awful it all is, being put out on their ear by the government who is supposed to look after the vulnerable and huge hullabaloo ensues. Or else they lobby their own TD etc.

This scheme is grand if everything keeps going gangbusters. Launching it near the top of a property price cycle (in my opinion) looks quite risky to me. This really seems like a ruse to keep new build property prices inflated

hometruths · 02-10-2020 2:32pm

Browney7 wrote: »

Sorry, meant 100k.

Not expecting you to know by the way, I'm more thinking through how this scheme would work! So in a stress scenario, does the bank get the full proceeds of the property sale to cover their outstanding loan or a pro rata share?

If the sale proceeds are less than the bank loan plus the government loan, who eats the loss?

If they owe 20% of the value, it's 70 grand that they can't pay, plus the 30 grand loss (the 100k advanced originally) that the taxpayer has to eat on top. Do the government hold a debt over "the hard pressed homebuyer who was doing their best?" I can't see this being a good look for the government of the day

I agree - it might garner a few good headlines in the short term, but in reality it is a no win situation for the government.

Prices tank, forced sale - homeowner will wail government is just as bad as the nasty banks, they're no different Joe.

Prices tank, homeowner wishes to sell due to change in circumstances, homeowner will wail they can't afford to move because they have to pay back the big bad government, the government has me trapped in a living hell Joe.

If prices fall they'll write it off, at which stage people will not bother paying it and everyone will just expect it to be written off.

Prices rocket, homeowner wishes to trade up because their 300 grand house is now worth 600 grand, but then they realise the government is taking 120k of their equity meaning they can't actually afford to trade up after al. Homeowner will wail this is unfair - what I owed the bank went down, but my debt to the government doubled, they're like bleedin' loan sharks Joe, and now they have me trapped in a house that is too small etc etc

People who don't qualify for it will complain it is unfair etc etc etc.

There are so many different pitfalls for this, I cannot see it ending well.

hometruths · 02-10-2020 2:49pm

Having said all that if the governments objective is to increase prices by 20% it is actually a certain win for the government!

PropQueries · 04-10-2020 8:44pm

From the Irish Times in July 2019:

“How big is our national debt? It’s just over €200 billion. On a per capita basis that’s the third highest in the world, eclipsed only by the US and Japan. It equates to €42,000 for every man, woman and child in the State or nearly €90,000 for every worker in the economy.”

Link to Irish Times article here: https://www.irishtimes.com/business/economy/ireland-s-200bn-debt-burden-how-did-we-get-here-1.3943085

Timing belt · 04-10-2020 8:59pm

PropQueries wrote: »

From the Irish Times in July 2019:

“How big is our national debt? It’s just over €200 billion. On a per capita basis that’s the third highest in the world, eclipsed only by the US and Japan. It equates to €42,000 for every man, woman and child in the State or nearly €90,000 for every worker in the economy.”

Link to Irish Times article here: https://www.irishtimes.com/business/economy/ireland-s-200bn-debt-burden-how-did-we-get-here-1.3943085

Debt to GDP 57% 2019

source: https://www.ntma.ie/business-areas/funding-and-debt-management/investor-relations

Its worth having a read of the investors presentation as it highlights the risks to the economy and 7 slides specifically on the property market

Cyrus · 05-10-2020 3:05pm

PropQueries wrote: »

I suppose this is where we disagree with the data on future demand:

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

Central Bank report in December 2019 based their housing demand projections on net migration remaining at c. 30,000 per annum out until 2030:

https://centralbank.ie/news-media/press-releases/press-release-economic-letter-population-change-and-housing-demand-in-ireland-10-december-2019#:~:text=Today%20the%20Central%20Bank%20of,Thomas%20Conefrey%20and%20David%20Staunton.&text=Assuming%20a%20lower%20level%20of,per%20annum%20out%20to%202030

how many more times are you going to post this?

average age of a FTB is 34 so looks like there will be plenty demand.

mcsean2163 · 05-10-2020 3:13pm

I've been looking for a small industrial unit, reasonably priced in South side Dublin.

Despite all the doom and gloom, only one competitively priced. Does anyone know if that will ever change?

PropQueries · 05-10-2020 3:19pm

Cyrus wrote: »

how many more times are you going to post this?

average age of a FTB is 34 so looks like there will be plenty demand.

Well, we've also built c. 70,000 new residential units since then which at an average of 2 per unit would house 140,000 persons.

That doesn't include at least c. 10k - 15k probate homes re-entering the market per annum, so that would be another minimum of c. 40,000 units entering supply over the past 4 years or enough to house an additional 80,000 persons. Never mind the thousands of student accommodation beds. And, I won't mention the existing vacant properties.

beauf · 05-10-2020 4:05pm

PropQueries wrote: »

...so that would be another minimum of c. 40,000 units entering supply over the past 4 years ....

Many estimate we'd need at least that a year for many years to overcome the shortfall that has built up since before last crash.

To put that into perspective...

Over the period 2002 to 2006, the number of house completions rose each year to a peak of 88,200 in 2006.
The number of houses completed in 2007 decreased by 12% to 78,000.

I'm sure it will all work out though.

PropQueries · 05-10-2020 4:20pm

beauf wrote: »

Many estimate we'd need at least that a year for many years to overcome the shortfall that has built up since before last crash.

To put that into perspective...

I'm sure it will all work out though.

What's interesting is that a near enough same argument is taking place today regarding the supply/demand issue as took place back in 2005.

Back in 2005, Davy issued a report that stated:

"more than 40% of houses built in the past two years are lying vacant as second homes, holiday homes or unlet investment properties, adding that this rate must fall to nearer 10%."

However, in the same article, Hooke & MacDonald used the same excuse we're using today that we need plenty of more houses because of net migration:

"With net inward migration now averaging close to 50,000 per annum, it is critical the appropriate physical and social infrastructure is in place to accommodate the growth in population,' comments Geoff Tucker, Economist with Hooke & MacDonald.".

Link to RTE article on Davy report here: https://www.rte.ie/news/business/2005/0524/63495-construction/

beauf · 05-10-2020 5:45pm

If you can get a time machine and go back 2005 you're all sorted then.

enricoh · 07-10-2020 7:37pm

I heard mairead mc guinness on rte news there that she is in favour of tax harmonisation across the eu! Bring back phil hogan , we can do without her 'fighting' our corner. It really is the only show in town for us.

With the government buying up every second new house I reckon that'll be the get out of jail card for the builders this time around. Won't be as many foundations poured next year or the finance to pay for them.

With the hospitality industry in tatters there'll be more people looking for the government to pay the rent. Surely the government will cut the hap levels next year, hap is keeping rents artificially high as it is imo.
Eviction ban to be extended again , anyone thinking of becoming a landlord will be sent for medical assessment!!

Medium & Long Term Property Market Chat

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