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Property Market 2019

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    #3062
    kippy
    Registered Users Posts: 18,394 ✭✭✭✭kippy


    99problems1 wrote: »
    Your numbers sound impressive. However, it works out worse.

    if a house is 400k, a 10% deposit it 40k.

    A 5% increase is 20k.

    A 50% drop in deposit is 20k.

    Except you'll be paying interest for 30 years on that 20k so it costs more and extends people and puts them at more risk, driving up prices.

    It's better for things to cost lower for everyone, than to have some people have more money. It's called wealth inequality.
    While there's a lot of variables you've also neglected to take into account the cost of continuing to rent while you save that deposit. Less time renting, less
    costs.
    Although to be honest, the whole argument is moot enough, especially when you consider the amount of nonsense the whole thing is.


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    #3063
    Interested Observer
    Registered Users Posts: 13,004 ✭✭✭✭Interested Observer


    The_Conductor wrote: »
    The HTB and the lower deposit requirement for a FTB makes it increasingly difficult for a non FTB to buy a new property- from a financial perspective, most non-FTBs simply cannot compete for new properties. Put it this way- two identical people neither own property- but one can buy a new property with a 5% deposit- whereas the other needs a 20% deposit. Its stacked. Its not as bad for secondhand properties- because a FTB still needs a 10% deposit- which is an achievement.........

    Yes but again, for the third time, if a non FTB is buying a new house they need 20%. If they're buying a second hand house they need 20%. It makes absolutely no difference to them whether the house is new or not. They have the money or they don't.


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    #3064
    Star Lord
    Registered Users Posts: 30,123 ✭✭✭✭Star Lord


    Interested Observer wrote: »
    Yes but again, for the third time, if a non FTB is buying a new house they need 20%. If they're buying a second hand house they need 20%. It makes absolutely no difference to them whether the house is new or not. They have the money or they don't.

    It does if the house price is artificially inflated because of the HTB scheme.


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    #3065
    Blowfish
    Registered Users Posts: 5,112 ✭✭✭Blowfish


    The_Conductor wrote: »
    RTE went and compared the before and after HTB introduction about a fortnight after its introduction- the 20k had simply been incremented onto prices. Its not that dwellings would have been smaller, or builders would have had to be smarter- they simply got 20k per unit incremented onto their profit margins- simple as.
    Wasn't that the entire point of it though? The volume of new builds were low due to high costs leaving profit margins pretty low. The HTB was then brought in to increase profits, making stuff that previously wasn't worth building now profitable enough to complete, thus increasing the volume of new builds.


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    #3066
    Interested Observer
    Registered Users Posts: 13,004 ✭✭✭✭Interested Observer


    Star Lord wrote: »
    It does if the house price is artificially inflated because of the HTB scheme.

    Inflated by what, 20k? So for what should be a 500k house the second time buyer needs 104k instead of 100k. If they can get the 100k together they can probably get the other 4k together. This isn't pricing them out of anything.


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    #3067
    Giblet
    Registered Users Posts: 11,977 ✭✭✭✭Giblet


    Interested Observer wrote: »
    Inflated by what, 20k? So for what should be a 500k house the second time buyer needs 104k instead of 100k. If they can get the 100k together they can probably get the other 4k together. This isn't pricing them out of anything.

    I think it works the other way.

    If you had 30k deposit, you had 10% of 300k, with an additional 20k, that moves up to 500k (LTI being the factor now) You potentially have 200k more purchasing power, not just 20k.


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    #3068
    Bluefoam
    Registered Users Posts: 7,712 ✭✭✭Bluefoam


    Interested Observer wrote: »
    Inflated by what, 20k? So for what should be a 500k house the second time buyer needs 104k instead of 100k. If they can get the 100k together they can probably get the other 4k together. This isn't pricing them out of anything.

    Who are you to say whether 4k is valuable to someone... There seems to be an attitude that people buying houses are super wealthy and are somehow effecting the poor downtrodden first time buyer... People struggle at all levels, people need to save exteme amounts of money... that 4 grand could be the difference between being able to afford to put in floors or not...


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    #3069
    Interested Observer
    Registered Users Posts: 13,004 ✭✭✭✭Interested Observer


    Giblet wrote: »
    I think it works the other way.

    If you had 30k deposit, you had 10% of 300k, with an additional 20k, that moves up to 500k (LTI being the factor now) You potentially have 200k more purchasing power, not just 20k.

    That's fair enough for a FTB, but LTI does become a massive factor there, increase in (joint) salary of about 60k to go from a 300k house to a 500k house. That's more than most people earn in the first place, never mind supplementally. Still don't know how that factors into things for a second time buyer.


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    #3070
    99problems1
    Banned (with Prison Access) Posts: 391 ✭✭99problems1


    kippy wrote: »
    While there's a lot of variables you've also neglected to take into account the cost of continuing to rent while you save that deposit. Less time renting, less
    costs.
    Although to be honest, the whole argument is moot enough, especially when you consider the amount of nonsense the whole thing is.

    Many people I work with and many I have went to college with are now building, obtaining this money. Most of them have been living at home with one of their parents to save the money.

    Others are self building and saving a load of money.

    In fact, the ones in their 20's are not able to afford new houses at 400k. The ones who can afford it...do they really need help?

    If you're in your 30's, you should have a good deposit saved up...wtf were you doing for the last 10 years?

    There's a lack of personal responsibility. If banks offered 110% mortgages tomorrow you'd see great demand for them.


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    #3071
    awec
    Administrators Posts: 53,365 Admin ✭✭✭✭✭awec


    99problems1 wrote: »
    Many people I work with and many I have went to college with are now building, obtaining this money. Most of them have been living at home with one of their parents to save the money.

    Others are self building and saving a load of money.

    In fact, the ones in their 20's are not able to afford new houses at 400k. The ones who can afford it...do they really need help?

    If you're in your 30's, you should have a good deposit saved up...wtf were you doing for the last 10 years?

    There's a lack of personal responsibility. If banks offered 110% mortgages tomorrow you'd see great demand for them.

    Yes. This is a common soundbite on here, but these people are not above needing help. These are the people paying crazy rents.

    Living at home with the parents is the other lazy soundbite. Firstly, aside from the fact that no grown adult should have to live with mummy and daddy to get by in life, this is not an option for most people.


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    #3072
    whatever76
    Registered Users Posts: 1,007 ✭✭✭whatever76


    99problems1 wrote: »
    Many people I work with and many I have went to college with are now building, obtaining this money. Most of them have been living at home with one of their parents to save the money.

    Others are self building and saving a load of money.

    In fact, the ones in their 20's are not able to afford new houses at 400k. The ones who can afford it...do they really need help?

    If you're in your 30's, you should have a good deposit saved up...wtf were you doing for the last 10 years?

    There's a lack of personal responsibility. If banks offered 110% mortgages tomorrow you'd see great demand for them.

    Sorry but that's way easier said than done ….


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    #3073
    kippy
    Registered Users Posts: 18,394 ✭✭✭✭kippy


    99problems1 wrote: »
    Many people I work with and many I have went to college with are now building, obtaining this money. Most of them have been living at home with one of their parents to save the money.

    Others are self building and saving a load of money.

    In fact, the ones in their 20's are not able to afford new houses at 400k. The ones who can afford it...do they really need help?

    If you're in your 30's, you should have a good deposit saved up...wtf were you doing for the last 10 years?

    There's a lack of personal responsibility. If banks offered 110% mortgages tomorrow you'd see great demand for them.

    This is the point you made in the post I was responding to:
    "Except you'll be paying interest for 30 years on that 20k so it costs more and extends people and puts them at more risk, driving up prices."
    I suppose the question comes down to, is it easier/more cost efficient to "save up" 20K or pay it back over the period of 20-35 years.
    And again I'd suggest that in the Irish Market, and with a number of caveats it's more straightforward and most likely more cost efficient to pay it back over 30 years.


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    #3074
    elefant
    Registered Users Posts: 4,647 ✭✭✭elefant


    99problems1 wrote: »
    If you're in your 30's, you should have a good deposit saved up...wtf were you doing for the last 10 years?

    Living life?

    How grim that anyone could have this much of an expectation that people should be spending all their twenties living frugally at home with their parents for the privilege of being able to avoid homelessness in their retirement.


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    #3075
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    elefant wrote: »
    Living life?

    How grim that anyone could have this much of an expectation that people should be spending all their twenties living frugally at home with their parents for the privilege of being able to avoid homelessness in their retirement.

    I think people call this planning for the future. No reason you cant have a good time but be smart about it. You cant have everthing you want in life.


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    #3076
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    elefant wrote: »
    Living life?

    How grim that anyone could have this much of an expectation that people should be spending all their twenties living frugally at home with their parents for the privilege of being able to avoid homelessness in their retirement.

    To be fair, I don't think its absolutely one or the other. But I do think its prudent to have some savings behind you by the time you reach 30.

    I know plenty of people who are looking around aimlessly now but the reason for that is that they spent much of their 20's in South East Asia or South America living it up. Great experiences no doubt, but not much use to buy a home.

    I also know people who traveled for a year or two out of college, then came back and worked and now have the funds they need at the right time in their lives to be buying. I'm not talking about people living at home with their parents either to "crash save", rather just those who were in the habit of saving a few hundred per month and not touching those savings for holidays, cars, etc.

    Its absolutely right that people should have to demonstrate a history of savings before being loaned hundreds of thousands of euro.

    Someone will say that not everyone can afford to save, and that some live month to month, but really those people shouldn't be buying. There should be proper social housing provision for those on genuinely low incomes. Its never been the case apart from a brief period in the 00's that absolutely everyone had the expectation of being able to buy property.


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    #3077
    elefant
    Registered Users Posts: 4,647 ✭✭✭elefant


    SozBbz wrote: »
    Its absolutely right that people should have to demonstrate a history of savings before being loaned hundreds of thousands of euro.

    Someone will say that not everyone can afford to save, and that some live month to month, but really those people shouldn't be buying. There should be proper social housing provision for those on genuinely low incomes. Its never been the case apart from a brief period in the 00's that absolutely everyone had the expectation of being able to buy property.

    This works fine in other countries.

    Everyone should have the expectation to buy if they can afford it. Expectations are really plummeting.


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    #3078
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    elefant wrote: »

    Everyone should have the expectation to buy if they can afford it. Expectations are really plummeting.

    You've just made a catch all statement there.

    Everyone who can afford it, can buy, of course.

    What we're talking about though, is that not everyone will be able to afford it, and that is totally normal, especially when we're talking about Dublin.

    Low income workers in other capital cities don't have the expectation to be able to buy necessarily either.

    Its always been this way.

    Whats actually changing is what the modern household looks like. The number of people per household has been falling (rise of the single person) as well as an increased population and longer life expectancy. This means greater demand for housing, and yes, changed expectations.

    Just because you grew up in a 4 bed semi in a nice suburb, doesn't mean you will be able to buy one easy peasy if you're earning a below average wage. Theres greater demand for that same house because of all the demographic factors above.


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    #3079
    elefant
    Registered Users Posts: 4,647 ✭✭✭elefant


    SozBbz wrote: »
    You've just made a catch all statement there.

    Everyone who can afford it, can buy, of course.

    What we're talking about though, is that not everyone will be able to afford it, and that is totally normal, especially when we're talking about Dublin.

    Low income workers in other capital cities don't have the expectation to be able to buy necessarily either.

    Its always been this way.

    Whats actually changing is what the modern household looks like. The number of people per household has been falling (rise of the single person) as well as an increased population and longer life expectancy. This means greater demand for housing, and yes, changed expectations.

    Just because you grew up in a 4 bed semi in a nice suburb, doesn't mean you will be able to buy one easy peasy if you're earning a below average wage. Theres greater demand for that same house because of all the demographic factors above.

    I mean if you've worked to be in a job and a position to afford 1500 euro a month rent, it's sad that there's an expectation that you've also had to scrupulously save a consistent amount month-in, month-out for a decade to get a shot at paying the same amount for a mortgage. If you can afford to pay the mortgage, it's not an unreasonable expectation to be able to buy something.

    It's the reality now, of course. But it isn't the reality in other countries. And it's unfortunate that there are people in Ireland with the mindset of 'what the fcuk were you doing for the last 10 years' if you haven't saved 40 grand to buy a relatively modest apartment.


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    #3080
    Interested Observer
    Registered Users Posts: 13,004 ✭✭✭✭Interested Observer


    elefant wrote: »
    I mean if you've worked to be in a job and a position to afford 1500 euro a month rent, it's sad that there's an expectation that you've also had to scrupulously save a consistent amount month-in, month-out for a decade to get a shot at paying the same amount for a mortgage. If you can afford to pay the mortgage, it's not an unreasonable expectation to be able to buy something.

    It's the reality now, of course. But it isn't the reality in other countries. And it's unfortunate that there are people in Ireland with the mindset of 'what the fcuk were you doing for the last 10 years' if you haven't saved 40 grand to buy a relatively modest apartment.

    What other countries do you not need a deposit?

    I don't really care what people have been doing for the last 10 years but do I think we should be going back to 100%, or 110% mortgages? Absolutely not.


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    #3081
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    elefant wrote: »
    I mean if you've worked to be in a job and a position to afford 1500 euro a month rent, it's sad that there's an expectation that you've also had to scrupulously save a consistent amount month-in, month-out for a decade to get a shot at paying the same amount for a mortgage. If you can afford to pay the mortgage, it's not an unreasonable expectation to be able to buy something.

    It's the reality now, of course. But it isn't the reality in other countries. And it's unfortunate that there are people in Ireland with the mindset of 'what the fcuk were you doing for the last 10 years' if you haven't saved 40 grand to buy a relatively modest apartment.

    Well first time buyers need 10% deposit, so that would be a €400k property, so not the most modest apartment, probably a house but just not in the absolute best of areas.

    I think its reasonable enough to expect a person or a couple to have some money put away. Say even €20k per person, which over 10 years is €166 per month. Lots of people mange to save this and more. This may mean one less holiday per year or buying a 2nd hand car as opposed to new, but its doable for a lot of people in normal enough jobs.

    Also, paying rent of €1500 per month is not proof of affordability of a mortgage of a similar amount. When you're a home owner, if something goes wrong, then thats on you. New boiler? Leak in the water tank? Oven breaks? Thats a cost to you personally. You have to pay for other things to like LTP, bins and insurance which are included in most rentals.

    In other words, to own a home its not enough to show mere repayment capacity. The banks are also looking for financial resilience, and your ability to cope if/when things go wrong, so that they'll still get their money. To demonstrate this, you need to be renting and saving.


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    #3082
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    Interested Observer wrote: »
    What other countries do you not need a deposit?

    I don't really care what people have been doing for the last 10 years but do I think we should be going back to 100%, or 110% mortgages? Absolutely not.



    I agree with the deposit requirement. I think the deposit requirements with 3.5x is too strict. I think the 3.5x should be increased to 4. But deposit requirements should stay as they do protect you. It’s normal to have slight increases/decreases in a market but have a deposit in the property protects you against exposure.


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    #3083
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Dolbhad wrote: »
    I agree with the deposit requirement. I think the deposit requirements with 3.5x is too strict. I think the 3.5x should be increased to 4. But deposit requirements should stay as they do protect you. It’s normal to have slight increases/decreases in a market but have a deposit in the property protects you against exposure.

    If 3.5 becomes 4, then expect property prices to increase accordingly.

    Both sides of the rules (deposit and LTI ratio) are there to protect the consumer.

    By allowing more lending, the winners would be the banks and people with property to sell, other than the roof over their own head.

    A big part of the reason that prices have leveled off is because of the LTI ratio restrictions.


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    #3084
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    Dolbhad wrote:
    I agree with the deposit requirement. I think the deposit requirements with 3.5x is too strict. I think the 3.5x should be increased to 4. But deposit requirements should stay as they do protect you. It’s normal to have slight increases/decreases in a market but have a deposit in the property protects you against exposure.

    I think it should be reduced to 3x as 3.5x is already high IMO.


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    #3085
    zuhuraswa
    Registered Users Posts: 94 ✭✭zuhuraswa


    Interested Observer wrote: »
    What other countries do you not need a deposit?

    The Netherlands. My sister just bought a house there last year. All she had to do was save the monthly mortgage repayment amount for six months consistently without touching the savings. But no initial lump sum or any amount of initial deposit required.
    Interested Observer wrote: »
    I don't really care what people have been doing for the last 10 years but do I think we should be going back to 100%, or 110% mortgages? Absolutely not.

    I agree with this too.


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    #3086
    Humour Me
    Registered Users Posts: 360 ✭✭Humour Me


    99problems1 wrote: »

    If you're in your 30's, you should have a good deposit saved up...wtf were you doing for the last 10 years?.

    10 years ago they were coming into the workforce during the recession. They weren’t walking into jobs which would cover their accommodation, living expenses and allow them to save on a regular basis. They were being told to be happy to take any job they got or to leave the country.


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    #3087
    Amirani
    Moderators, Society & Culture Moderators Posts: 12,521 Mod ✭✭✭✭Amirani


    alwald wrote: »
    I think it should be reduced to 3% as 3.5% is already high IMO.

    I'd question your opinion on the matter if you think it's appropriate to be putting % signs after those numbers.


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    #3088
    Bigmac1euro
    Registered Users Posts: 1,455 ✭✭✭Bigmac1euro


    Amirani wrote: »
    I'd question your opinion on the matter if you think it's appropriate to be putting % signs after those numbers.

    This is what your up against lol.


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    #3089
    Bigmac1euro
    Registered Users Posts: 1,455 ✭✭✭Bigmac1euro


    I think if you haven’t got any money saved and you’re in your 30’s now that’s a pretty bad sign. It’s not that hard to save, rent and go out believe it or not. I wouldn’t be on a particularly strong salary either and when I came out of school I walked into the recession. Myself and my OH are currently saving what we’re paying in rent. We even went on holiday earlier this year including a wedding.
    No holidays now for the next 11 months but by then should be in a pretty good position to apply for a mortgage.

    Also it doesn’t take a decade to put away a deposit for a house unless your saving the bare minimum.

    I run a car and travelled for 6 months. People exaggerate how hard it is to save. I noticed friends of mine and people I know my age are constantly going to Japan, New York and Dubai etc. They are driving 2015 and up cars probably on pcp and seem to have the best (Instagram) life ever. Designer clothes the lot.

    They’ll be the ones pissing and moaning they couldn’t save for a deposit and giving out stink when things go tits up again claiming their rent was too expensive and they couldn’t save when in reality they were actually just blowing it all.


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    #3090
    Sheeps
    Registered Users Posts: 2,762 ✭✭✭Sheeps


    Bigmac1euro wrote: »
    I think if you haven’t got any money saved and you’re in your 30’s now that’s a pretty bad sign. It’s not that hard to save, rent and go out believe it or not. I wouldn’t be on a particularly strong salary either and when I came out of school I walked into the recession. Myself and my OH are currently saving what we’re paying in rent. We even went on holiday earlier this year including a wedding.
    No holidays now for the next 11 months but by then should be in a pretty good position to apply for a mortgage.

    Also it doesn’t take a decade to put away a deposit for a house unless your saving the bare minimum.

    I run a car and travelled for 6 months. People exaggerate how hard it is to save. I noticed friends of mine and people I know my age are constantly going to Japan, New York and Dubai etc. They are driving 2015 and up cars probably on pcp and seem to have the best (Instagram) life ever. Designer clothes the lot.

    They’ll be the ones pissing and moaning they couldn’t save for a deposit and giving out stink when things go tits up again claiming their rent was too expensive and they couldn’t save when in reality they were actually just blowing it all.

    You might be in for a rude awakening when you have your deposit, and you go for that mortgage approval. You'll be facing a 50-100k gap with where that leaves you and the bottom rung of the housing ladder. I'm 32, earning almost double the average wage in this country, have had savings that I've been adding to since college and I'm still only half way through bridging that gap. I've literally moved back to the parents home since January to put away 2-3k a month, living the most frugal life I can live, and I reckon it'll be another year of living like this before I can afford a reasonably sized home.


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    #3091
    Bigmac1euro
    Registered Users Posts: 1,455 ✭✭✭Bigmac1euro


    Sheeps wrote: »
    You might be in for a rude awakening when you have your deposit, and you go for that mortgage approval. You'll be facing a 50-100k gap with where that leaves you and the bottom rung of the housing ladder. I'm 32, earning almost double the average wage in this country, have had savings that I've been adding to since college and I'm still only half way through bridging that gap. I've literally moved back to the parents home since January to put away 2-3k a month, living the most frugal life I can live, and I reckon it'll be another year of living like this before I can afford a reasonably sized home.

    We shall see.
    Are you applying alone ?
    That might be your problem tbh. Your circumstances sound completely different to mine.

    Also if your on double the average salary you could apply for an exemption. Although if your a single buyer maybe they won’t go for this. I don’t know your circumstances. You seem to be assuming a lot here.


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