Property Market 2018

Zenify · 12-01-2018 8:50am

Samuel T. Cogley wrote: »

Might as well get it out of the way for this year. Working class people need to look at working class areas, obviously that are safe etc. Not everyone can live in Donnybrook and going by a thread here at the moment I see Postcode snobbery is as alive as it ever was.

Working class people salary combined = 70k

70k x 3.5 = 245k

245k + deposit 25k = 270k

It's not a case of choosing an area but being left with one or two. Unfortunately most working class aren't even left with an area they can afford.

Bob24 · 12-01-2018 11:41am

Zenify wrote: »

Working class people salary combined = 70k

70k x 3.5 = 245k

245k + deposit 25k = 270k

It's not a case of choosing an area but being left with one or two. Unfortunately most working class aren't even left with an area they can afford.

Personally I think there is also a social aspect to this being overlooked. It is all fine to say working class people should buy in working class areas and indeed not everyone should think they are entitled to live in Dublin 4. But the other flip of that coin is: what if overtime prices increase so much everywhere in the city that they are no working class areas left? Are we as a society OK with having a capital city which is only suitable for families which are either recipients of social welfare/housing, or on the very top income brackets (i.e. with the working and part of the middle classes being completely removed from the city). We are not there yet in Dublin, but if we just say people should buy where they can afford it and are not mindful of price increases it could happen (and it is already like that in some other European capital cities).

Cyrus · 12-01-2018 11:53am

Bob24 wrote: »

Personally I think there is also a social aspect to this being overlooked. It is all fine to say working class people should buy in working class areas and indeed not everyone should think they are entitled to live in Dublin 4. But the other flip of that coin is: what if overtime prices increase so much everywhere in the city that they are no working class areas left? Are we as a society OK with having a capital city which is only suitable for families which are either recipients of social welfare/housing, or on the very top income brackets (i.e. with the working and part of the middle classes being completely removed from the city). We are not there yet in Dublin, but if we just say people should buy where they can afford it and are not mindful of price increases it could happen (and it is already like that in some other European capital cities).

we are still stuck in the mindset that everyone HAS to buy, they dont, some people cant afford to.

That said the rental market would have to change to facilitate this.

draiochtanois · 12-01-2018 12:07pm

This post has been deleted.

KellyXX · 12-01-2018 12:13pm

Bob24 wrote: »

Personally I think there is also a social aspect to this being overlooked. It is all fine to say working class people should buy in working class areas and indeed not everyone should think they are entitled to live in Dublin 4. But the other flip of that coin is: what if overtime prices increase so much everywhere in the city that they are no working class areas left? Are we as a society OK with having a capital city which is only suitable for families which are either recipients of social welfare/housing, or on the very top income brackets (i.e. with the working and part of the middle classes being completely removed from the city). We are not there yet in Dublin, but if we just say people should buy where they can afford it and are not mindful of price increases it could happen (and it is already like that in some other European capital cities).

Build proper transport infrastructure and locations where people can live and work in the city will grow exponentially.

When I worked in London, I commuted 93km each way. It took me 1 hour and 5 minutes door to door. Why? Proper trains.

Browney7 · 12-01-2018 12:25pm

KellyXX wrote: »

Build proper transport infrastructure and locations where people can live and work in the city will grow exponentially.

When I worked in London, I commuted 93km each way. It took me 1 hour and 5 minutes door to door. Why? Proper trains.

What is this sorcery? Someone with ideas of improving infrastructure and strategic planning? Never going to happen in Ireland - we'll vote for the guys who can give us a fiver extra a week

quadrifoglio verde · 12-01-2018 12:31pm

Bob24 wrote: »

Personally I think there is also a social aspect to this being overlooked. It is all fine to say working class people should buy in working class areas and indeed not everyone should think they are entitled to live in Dublin 4. But the other flip of that coin is: what if overtime prices increase so much everywhere in the city that they are no working class areas left? Are we as a society OK with having a capital city which is only suitable for families which are either recipients of social welfare/housing, or on the very top income brackets (i.e. with the working and part of the middle classes being completely removed from the city). We are not there yet in Dublin, but if we just say people should buy where they can afford it and are not mindful of price increases it could happen (and it is already like that in some other European capital cities).

Social housing open to all. There's family's who can't afford to buy in Dublin where they work, yet aren't able to apply for social housing in Dublin because they earn too much. At the same time you've people who have never worked and never will work entitled to it. That is wrong.

You pay a set percentage of your income. Whether you're on 20k or 200k.
You build a community that isn't full of the low waged mixed with the dregs of society, but one that's quite mixed with the butcher Baker and candlestick maker living side by side. You don't have a ghetto. You don't have unemployment blackspots.

The housing can never be bought. You've secure tenancy until you die and you pay the same percentage throughout your life. However as your needs change so too does the housing. So while you're young and have two kids you're in a 3 bedroom apartment. When your kids are over 23, you're in a 1 bed apartment that is more suitable for your needs.

I'm a capitalist at heart but even I would support the above. It's certainly a better system than what's there at the moment and as anyone would be entitled to take advantage, it's fair and equitable.
Social housing shouldn't just be for the poor. It should be open to all citizens of the country

Cyrus · 12-01-2018 12:35pm

quadrifoglio verde wrote: »

Social housing open to all. There's family's who can't afford to buy in Dublin where they work, yet aren't able to apply for social housing in Dublin because they earn too much. At the same time you've people who have never worked and never will work entitled to it. That is wrong.

You pay a set percentage of your income. Whether you're on 20k or 200k.
You build a community that isn't full of the low waged mixed with the dregs of society, but one that's quite mixed with the butcher Baker and candlestick maker living side by side. You don't have a ghetto. You don't have unemployment blackspots.

The housing can never be bought. You've secure tenancy until you die and you pay the same percentage throughout your life. However as your needs change so too does the housing. So while you're young and have two kids you're in a 3 bedroom apartment. When your kids are over 23, you're in a 1 bed apartment that is more suitable for your needs.

I'm a capitalist at heart but even I would support the above. It's certainly a better system than what's there at the moment and as anyone would be entitled to take advantage, it's fair and equitable.
Social housing shouldn't just be for the poor. It should be open to all citizens of the country

does a functioning version of this exist anywhere?

mloc123 · 12-01-2018 3:19pm

The first handful of 'new' properties are now advertised in the areas I track (north Kildare). Asking prices up around 5-6% on what they were for the 4th quarter of 2017, interesting to see how quickly the move. Similar house were sale agreed within 2-3 weeks in 2017.

Bob24 · 12-01-2018 5:59pm

Cyrus wrote: »

we are still stuck in the mindset that everyone HAS to buy, they dont, some people cant afford to.

That said the rental market would have to change to facilitate this.

It is not everyone has to buy. The question more are we ok with te lower middle-class being pushed away from the city (whether they are renting or buying, but currently rising a family in rented accommodation isn’t exactly great in ireland). I personally don’t think it’s a good thing for social balance and clearly things like Brexit and Trump votes have a lot to do with that.

Cyrus · 12-01-2018 6:02pm

Bob24 wrote: »

It is not everyone has to buy. The question more are we ok with te lower middle-class being pushed away from the city (whether they are renting or buying, but currently rising a family in rented accommodation isn’t exactly great in ireland. I personally don’t think it’s a good thing for social balance and clearly things like Brexit and Trump votes have a lot to do with that.

the city just moves out to accommodate them, like it has in London, the infastructure will have to catch up.

plenty of the people i work with have bought in kildare / meath and commute into ballsbridge because thats what makes the best sense for them financially and house wise.

Bob24 · 12-01-2018 6:05pm

draiochtanois wrote: »

Yeah I'm perfectly ok with that.
I don't think it's all that different today.
There are houses and cars I won't ever buy.

I think people need to be disabused of the fairytale notions.

Spacial segregation has nothing to do with people buying luxury cars.

Having more wealthier neighbourhoods and bigger houses than others is obvious as will always exist, that’s fine. But if a class of people is completely expelled from a whole city, then you break social cohesion and start having issues.

Bob24 · 12-01-2018 6:06pm

Cyrus wrote: »

the city just moves out to accommodate them, like it has in London, the infastructure will have to catch up.

plenty of the people i work with have bought in kildare / meath and commute into ballsbridge because thats what makes the best sense for them financially and house wise.

And the more you move away from the city the more those suburbs vote for the likes of Brexit.

The problem is if different types of people gets more and more geographically segregated from each other they understand each other's point of view less and less and start building different societies within the same country which are drifting further and further appart. Implications on social cohesion can be very bad in the long term.

Incidentally you also end up with the hard task of explaining to low/middle earners things like why they need to have a 90 minutes commute in the morning while others who are not working have a free home provided right in the city partly paid by the tax money of the commuter (again Dublin is not there yet but other European capitals are). I am not ostracising anyone here or telling what is right or wrong, but those are real questions which can break a society.

Villa05 · 12-01-2018 7:43pm

Bob24 wrote:

On the second point, if this was not clear I was solely talking about renters having spare disposable income. What I am saying is that landlords still have some margin to squeeze even more out of tenants and thus this will increase the amount they are ready to pay for properties. I do of course agree rents are at a all times high and sucking-up up too much income already, but it doesnâ€™t mean they canâ€™t go higher. Realistically renters still have budget for at least some of the following: going out, savings, holidays, buying non essential entertainement items, etc. I am absolutely not saying it would be a good thing,

I think this has more to do with people becoming disillusioned and voting away from traditional voters. Being squeezed at every available opportunity.

I would bet any money that the lower middle class had better quality of life during the recession than they have now in the so called recovery.
It's inevitable that they would vote against a system that drains them

Bob24 · 12-01-2018 8:21pm

quadrifoglio verde wrote: »

Social housing open to all. There's family's who can't afford to buy in Dublin where they work, yet aren't able to apply for social housing in Dublin because they earn too much. At the same time you've people who have never worked and never will work entitled to it. That is wrong.

You pay a set percentage of your income. Whether you're on 20k or 200k.
You build a community that isn't full of the low waged mixed with the dregs of society, but one that's quite mixed with the butcher Baker and candlestick maker living side by side. You don't have a ghetto. You don't have unemployment blackspots.

The housing can never be bought. You've secure tenancy until you die and you pay the same percentage throughout your life. However as your needs change so too does the housing. So while you're young and have two kids you're in a 3 bedroom apartment. When your kids are over 23, you're in a 1 bed apartment that is more suitable for your needs.

I'm a capitalist at heart but even I would support the above. It's certainly a better system than what's there at the moment and as anyone would be entitled to take advantage, it's fair and equitable.
Social housing shouldn't just be for the poor. It should be open to all citizens of the country

The above would be a way to make it more fair to middle earners indeed ... but having said that to keep it working and make sure than anyone who qualifies can entitle to it would probably incure a very high cost.

I think they have something like that in Sweden?

Graham · 12-01-2018 9:11pm

KellyXX wrote: »

Build proper transport infrastructure and locations where people can live and work in the city will grow exponentially.

When I worked in London, I commuted 93km each way. It took me 1 hour and 5 minutes door to door. Why? Proper trains.

People moving to commuter towns has been happening for a while now, I expect that trend will continue. I don't expect public transport to catch up any time soon.

In the mean time, I expect 2018 will see property prices in Dublin to continue to rise only constrained by the central bank lending rules.

GGTrek · 12-01-2018 9:17pm

Bob24 wrote: »

quadrifoglio verde wrote: »

Social housing open to all. There's family's who can't afford to buy in Dublin where they work, yet aren't able to apply for social housing in Dublin because they earn too much. At the same time you've people who have never worked and never will work entitled to it. That is wrong.

You pay a set percentage of your income. Whether you're on 20k or 200k.
You build a community that isn't full of the low waged mixed with the dregs of society, but one that's quite mixed with the butcher Baker and candlestick maker living side by side. You don't have a ghetto. You don't have unemployment blackspots.

The housing can never be bought. You've secure tenancy until you die and you pay the same percentage throughout your life. However as your needs change so too does the housing. So while you're young and have two kids you're in a 3 bedroom apartment. When your kids are over 23, you're in a 1 bed apartment that is more suitable for your needs.

I'm a capitalist at heart but even I would support the above. It's certainly a better system than what's there at the moment and as anyone would be entitled to take advantage, it's fair and equitable.
Social housing shouldn't just be for the poor. It should be open to all citizens of the country

The above would be a way to make it more fair to middle earners indeed ... but having said that to keep it working and make sure than anyone who qualifies can entitle to it would probably incure a very high cost.

I think they have something like that in Sweden?

Sure they do, it is really working well

:D:D
https://www.thelocal.se/20150821/how-to-navigate-swedens-crazy-rental-market
https://www.thelocal.se/20170523/european-commission-urges-sweden-to-tackle-housing-crisis
And guess what Assar Lindbeck the Economist who said the famous quote about rent control: “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.” is Swedish (still alive), because he had first hand experience of bad welfare policies: https://en.wikipedia.org/wiki/Assar_Lindbeck
Sweden is a very shining example of socialist policies gone wrong on an enormous range of policies! To stay on topic I just pointed out only their housing policy. It is a wet dream for the socialists and communists of Ireland, but Sweden after decades with these policies still ended up with a housing crisis, because as all good commies and good socialists their ideological mental barriers obstruct the fact that no one will rent and no one will build if you regulate prices! It is economics 101!

Bob24 · 12-01-2018 9:40pm

KellyXX wrote: »

Build proper transport infrastructure and locations where people can live and work in the city will grow exponentially.

When I worked in London, I commuted 93km each way. It took me 1 hour and 5 minutes door to door. Why? Proper trains.

For sure better public transport is always a good thing (but that also implies different urbanism with less houses and more apartments so that population density is sufficient to justify all these trains/metro/light rail routes, I personally have no problem with that but I'd say many in Ireland would choose a small back garden over a nearby rail station).

But having said that facilitating the exile is not helping with the social cohesion issues I was mentioning.

KellyXX · 13-01-2018 9:01am

Bob24 wrote: »

For sure better public transport is always a good thing (but that also implies different urbanism with less houses and more apartments so that population density is sufficient to justify all these trains/metro/light rail routes, I personally have no problem with that but I'd say many in Ireland would choose a small back garden over a nearby rail station).

But having said that facilitating the exile is not helping with the social cohesion issues I was mentioning.

I was renting a 3 bed house with a back garden while commuting to Liverpool street in certain London over 90km I'm in an hour. The trains ram every 10 minutes and the stations had huge car parks so people could come from Mike's around and commute to London.

Of course you had those who wanted to live in apartment in the city too and pay more, but a lot of people preferred to live outside London. Cheaper for one thing.

One of the companies I worked for even had a policy that everyone worked from home and each team came into the office one day a week only. That allowed them to have a smaller office and must have done wonders for the traffic and demand on city properties. In that please they were people working as far away as Manchester and coming in for the one day a week in London.

The problem in Ireland is that we don't think about infrastructure being part of the housing cross when it is a huge part of it.

Bob24 · 13-01-2018 12:00pm

KellyXX wrote: »

I was renting a 3 bed house with a back garden while commuting to Liverpool street in certain London over 90km I'm in an hour. The trains ram every 10 minutes and the stations had huge car parks so people could come from Mike's around and commute to London.

Of course you had those who wanted to live in apartment in the city too and pay more, but a lot of people preferred to live outside London. Cheaper for one thing.

One of the companies I worked for even had a policy that everyone worked from home and each team came into the office one day a week only. That allowed them to have a smaller office and must have done wonders for the traffic and demand on city properties. In that please they were people working as far away as Manchester and coming in for the one day a week in London.

The problem in Ireland is that we don't think about infrastructure being part of the housing cross when it is a huge part of it.

Driving to a station, then getting a train with an hour commute is acceptable but not great (and actually many in Dublin would have a shorted commute). A good public transport network wouldn't imply people using their car to reach that network (btw in spite of our subpar network I've been working/commuting in Dublin for over 10 years and never needed a car).

But keep in mind that even with that you had it pretty good and you were not part fo those who were the most cast away from the city. Living close to a well connected station obviously involves a significant premium in property/rental cost that not everyone an afford, and from what I have heard monthly train passes from distant suburbs are not exactly cheap in London (I just checked Bracknell as this is a place I know and a monthly pass to London including use of underground seems to be 428 pounds, which comes on top of another few 100s of cost of ownership/maintenance/parking for the car ... keeping in mind we are talking about low to low/medium earners that is *a lot* of money).

And more importantly I will say it again, it is absolutely not just a problem of money and infrastructure, but very much so a question of social cohesion. Both the US and the UK have shown that removing lower/middle classes from large cities and in a way disconnecting them from the wealth and economic activity brought to these cities by globalisation is fragmenting countries and causing strong rejection for current social models.

KellyXX · 13-01-2018 4:43pm

Bob24 wrote: »

Driving to a station, then getting a train with an hour commute is acceptable but not great (and actually many in Dublin would have a shorted commute). A good public transport network wouldn't imply people using their car to reach that network (btw in spite of our subpar network I've been working/commuting in Dublin for over 10 years and never needed a car).

But keep in mind that even with that you had it pretty good and you were not part fo those who were the most cast away from the city. Living close to a well connected station obviously involves a significant premium in property/rental cost that not everyone an afford, and from what I have heard monthly train passes from distant suburbs are not exactly cheap in London (I just checked Bracknell as this is a place I know and a monthly pass to London including use of underground seems to be 428 pounds).

And more importantly I will say it again, it is absolutely not just a problem of money and infrastructure, but very much so a question of social cohesion. Both the US and the UK have shown that removing lower/middle classes from large cities and in a way disconnecting them from the wealth and economic activity brought to these cities by globalisation is fragmenting countries and causing strong rejection for current social models.

I lived 9Km from the station, in a different town.
In Dublin I lived 8KM from work and it took me 1 hour and 20 minutes on average door to door for my commute.

The ****ty infrastructure here does not allow people to live far from work, therefore they have to live closer, putting pressure on the where people must live. In the UK you can live much further out and still get to work in a decent time. PI R Squared.

Averagevegan · 13-01-2018 7:13pm

KellyXX wrote: »

I lived 9Km from the station, in a different town.
In Dublin I lived 8KM from work and it took me 1 hour and 20 minutes on average door to door for my commute.

The ****ty infrastructure here does not allow people to live far from work, therefore they have to live closer, putting pressure on the where people must live. In the UK you can live much further out and still get to work in a decent time. PI R Squared.

I for one would love to get out of the city if we had decent trains.

Unfortunately the car centric nature of dublin means location will always be king.

kippy · 13-01-2018 11:42pm

Averagevegan wrote: »

I for one would love to get out of the city if we had decent trains.

Unfortunately the car centric nature of dublin means location will always be king.

Location is ALWAYS king, anywhere.

theboringfox · 15-01-2018 10:52pm

kippy wrote: »

Location is ALWAYS king, anywhere.

Location is king yes.

I think it's great to see central bank rules working. Seems to have taken some heat of market.

No basis for it but think 2018 will be much more modest in price growth. Supply starting to improve and CV rules capping people.

LirW · 15-01-2018 11:54pm

The truth is that the department of Housing doesn't even know how many homes were built.
While the Department states a number of 27k, an independent body stated the number is closer to 8k.

It's a bit strong talking about increasing supply when the Department of Housing has no real clue what's going on, but it's more or less safe to say that they want to be painted as well as possible.

http://www.thejournal.ie/housing-report-3798102-Jan2018/

The_Conductor · 16-01-2018 7:41am

LirW wrote: »

The truth is that the department of Housing doesn't even know how many homes were built.
While the Department states a number of 27k, an independent body stated the number is closer to 8k.

It's a bit strong talking about increasing supply when the Department of Housing has no real clue what's going on, but it's more or less safe to say that they want to be painted as well as possible.

http://www.thejournal.ie/housing-report-3798102-Jan2018/

That is taking a worse case scenario- and specifically excludes housing association, AHB, Local Authority and several other categories of property which were completed in the last 12 months.

Traditionally- the number of electricty connections turned on was used as a figure to account for 'completions' however, this methodology has fallen into disrepute as it obviously also accounts for vacant property which has simply been reconnected to the network.

The CSO use statistical sampling to try to smooth out this- and their methodology assumes that 2.25% of ESB connections are reconnections- rather than new connections. On this basis- of the 19,320 connections turned on in 2018- there were in the region of 18,840 newly constructed builds.

The CSO figure- is a little below headline CIF figures- but would be within statistical significant levels of them.

The Minister should think carefully before he answers questions such as the one from yesterday- people are overanalysing what he actually said- and coming up with bizarre conclusions.

16-01-2018 3:12pm

Something is seriously wrong, or someone is fooling someone. So my local paper in Mayo had a headline on its Facebook feed, It stated something along the lines that auctioneers predict that house prices in Mayo will rise 10 percent in 2018.

Now here is the deal, entire villages / small to medium towns in Mayo are up for sale. The towns of Ballyhaunis, kiltimagh, Louisburgh, Swinford any of the North Mayo towns are suffering from depopulation.

I was talking to a guy from spectacular Leenane Galway, he tells me that his community at best has 70 people left in it. The GAA pitch has weeds growing in it.

The County town of Castlebar has tumble weed going up its main street yet the local paper and unnamed auctioneers think house prices will rise by 10 percent in Mayo.

Strange ....

Graham · 16-01-2018 4:11pm

6541 wrote: »

Something is seriously wrong, or someone is fooling someone. So my local paper in Mayo had a headline on its Facebook feed, It stated something along the lines that auctioneers predict that house prices in Mayo will rise 10 percent in 2018.

Ultimately nobody will be fooling anyone.

Auctioneers follow the market. If your analysis is correct then the market will fairly quickly re-educate overly optimistic auctioneers.

LirW · 16-01-2018 4:58pm

Also most counties have small spots where it's always popular to buy while in other parts shifting takes forever.
Traditionally where the jobs are property is more expensive. Same goes for anything that's located at good commuter spots.
Myself is living in a very rural area in the backbone of Wicklow and while houses here take forever to sell (vendors that overestimate the value of their own houses) we're still in Wicklow where you have popular areas close to Dublin where the shifting doesn't take long. So in theory we'd be in an area where houses would sell with a huge plus compared to last year while locally that's simply not true. Main reason is the limited job prospect and there are a lot of places where commuting to Dublin would be easier.

If you take Longford for example, this county is away from everything, commuting in whatever way will take long, therefore the prices weren't picking up for some time.

IF property locally won't sell it will adjust itself over time. But there's still a big disparity between urban, commutable and rural areas.

16-01-2018 5:12pm

Agreed - I suppose we can take it that the property market is a whole heap of micro markets as opposed to one property market.

draiochtanois · 16-01-2018 5:15pm

This post has been deleted.

Graham · 16-01-2018 6:02pm

LirW wrote: »

If you take Longford for example, this county is away from everything, commuting in whatever way will take long, therefore the prices weren't picking up for some time.

Longford had one of (if not the) largest increase outside of Dublin over the last year.

Prices haven't yet recovered sufficiently to make new builds viable and the supply of ghost estates has largely been soaked up.

Apartments in Longford town that were on the market for the mid €30k's 18 months ago are now mid €70k's

LirW · 16-01-2018 6:08pm

That's why I said they didn't pick up for a while. They are still under national average and there are loads of bargains out there. Probably still the cheapest place to buy a house for your family.
I looked briefly for houses in Longford and there is definitely a difference in the last 20 years but that said the prices there a year ago where incredibly low and it feels like they are just adjusting.

Bob24 · 16-01-2018 6:44pm

draiochtanois wrote: »

It's January 2010 John and Mary earn €60,000 and €40,000 respectively and start saving €1000 a month for a deposit for a house.

There salaries increase by 3% a year.

The bank gives them mortgage approval for 3.5 * John's salary + 1 * Mary's

So at the end of 2010 deposit 12,000 + 60,000 *3.5 + 40,000 = €262,000

And so on over the years

2011 Value of Mortgage + deposit €24,000 = €281,500
2012 Value of Mortgage + deposit €36,000 = €301,225
2013 Value of Mortgage + deposit €48,000 = €321,182
2014 Value of Mortgage + deposit €60,000 = €341,377
2015 Value of Mortgage + deposit €72,000 = €361,819
2016 Value of Mortgage + deposit €84,000 = €382,513
2017 Value of Mortgage + deposit €96,000 = €403,468
2018 Value of Mortgage + deposit €108,000 = €424,693

That is why house prices are still rising because the supply isn't there and the John and Marys of the world keep saving ....

Quote from https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/private-household-credit-and-deposits/trends-in-personal-credit-and-deposits-september-2017.pdf?sfvrsn=5

Household deposits grew by €3 billion (3.3 per cent) over the year to end-September 2017 (Chart 2). This was the twelfth consecutive quarter of positive net flows based on a 4-quarter sum.

Indeed but the sad thing is that each year and in spite of having more savings, the mortgage amount they need to buy the same property is increasing (i.e. while they have more savings they need to male more debts to buy that property).

Also it can’t keep going that way forever as at some point even with more savings they won’t be able to get much larger mortgage as they’ll be hitting the LTI threashold rather they the LTV threashold (and their income is not increasing that fast).

frefrefre · 16-01-2018 7:23pm

Bob24 wrote: »

Indeed but the sad thing is that each year and in spite of having more savings, the mortgage amount they need to buy the same property is increasing (i.e. while they have more savings they need to male more debts to buy that property).

Also it can’t keep going that way forever as at some point even with more savings they won’t be able to get much larger mortgage as they’ll be hitting the LTI threashold rather they the LTV threashold (and their income is not increasing that fast).

Surely as supply increases in commutable areas, prices will plateau? I know people love rising prices but surely this can't last more than a couple of years, the prices for 'starter homes' way outside the city are very expensive.

Cuddlesworth · 16-01-2018 7:28pm

Bob24 wrote: »

Indeed but the sad thing is that each year and in spite of having more savings, the mortgage amount they need to buy the same property is increasing (i.e. while they have more savings they need to male more debts to buy that property).

Also it can’t keep going that way forever as at some point even with more savings they won’t be able to get much larger mortgage as they’ll be hitting the LTI threashold rather they the LTV threashold (and their income is not increasing that fast).

John and Mary make 6k a net month. They can save far more then 1k if they want.

frefrefre · 16-01-2018 7:36pm

Cuddlesworth wrote: »

John and Mary make 6k a net month. They can save far more then 1k if they want.

Are paying 2 grand on rent, creche fees, insurance and tax on two cars etc etc

Bob24 · 16-01-2018 7:51pm

Cuddlesworth wrote: »

John and Mary make 6k a net month. They can save far more then 1k if they want.

Their saving capacity will depend on their circonstances and is really besides the point though. Regarless of them saving 1k, 2k, or 3k the same logic outlined by the OP applies.

scouserstation · 16-01-2018 8:18pm

theboringfox wrote: »

Location is king yes.

I think it's great to see central bank rules working. Seems to have taken some heat of market.

No basis for it but think 2018 will be much more modest in price growth. Supply starting to improve and CV rules capping people.

2018 will see modest price growth or even plateau, but there is still very poor supply of new homes and as a result of central bank rules making it harder for trader uppers there is now a slowdown in second hand homes coming onto the market, this will not help prices in the long term.

Bob24 · 16-01-2018 9:42pm

frefrefre wrote: »

Surely as supply increases in commutable areas, prices will plateau? I know people love rising prices but surely this can't last more than a couple of years, the prices for 'starter homes' way outside the city are very expensive.

I hope this is what will happen. But my gut feeling is that what we will see is yet another boom and crash cycle. There is still some margin for price too rise a couple more years (maybe at a slightly slower pace), and by then if we have lets say a combination of supply overshot and financial crisis (economic cycles will bring one every 10 years or so) we could see another bad crash.

Cuddlesworth · 16-01-2018 10:23pm

frefrefre wrote: »

Are paying 2 grand on rent, creche fees, insurance and tax on two cars etc etc

Or they have no car, no kids and no rent. I've gotten to know plenty of mid 30's couples and the amount of DINKS out there living frugally for a house is amazing.

Bob24 wrote: »

Their saving capacity will depend on their circonstances and is really besides the point though. Regarless of them saving 1k, 2k, or 3k the same logic outlined by the OP applies.

Not really. He is pointing out regular savings of multiple couples was driving, and is leading to, regular house price increases. I don't think its that black and white.

Bob24 · 16-01-2018 10:40pm

Cuddlesworth wrote: »

Not really. He is pointing out regular savings of multiple couples was driving, and is leading to, regular house price increases. I don't think its that black and white.

Yes it does.

The way I read the original post is that the price they can pay for a house is rising much faster than they are saving because they can leverage the extra savings to contract more debt. Hence house prices can increase faster than wages (because they are fulled by fast increasing borrowing capacity).

Regardless of the amount they are saving each month, that logic still applies (except it will stop once they hit the LTI limits as I was mentioning).

mick2311 · 16-01-2018 10:53pm

Bob24 wrote: »

Yes it does.

The way I read the original post is that the price they can pay for a house is rising much faster than they are saving because they can leverage the extra savings to contract more debt. Hence house prices can increase faster than wages (because they are fulled by fast increasing borrowing capacity).

Regardless of the amount they are saving each month, that logic still applies (except it will stop once they hit the LTI limits as I was mentioning).

I think you've misread the op. The LTI isn't changing the op assumes a salary increase of 3% each and the LTI is always 3.5x John's salary plus one times Mary's. The increases are cause by the 12k savings plus the 3.5x John's extra salary plus 1x Mary's extra salary

Bob24 · 16-01-2018 11:07pm

mick2311 wrote: »

I think you've misread the op. The LTI isn't changing the op assumes a salary increase of 3% each and the LTI is always 3.5x John's salary plus one times Mary's. The increases are cause by the 12k savings plus the 3.5x John's extra salary plus 1x Mary's extra salary

Yes you are right the OP didn't factor in the LTV ratio, my bad.

But than factoring it in (which is needed) would show even sharper increase in their borrowing capacity.

bleary · 17-01-2018 12:23am

It's 3.5 times both Incomes now

Villa05 · 17-01-2018 8:28am

Calling the bottom in the interest rate cycle. I envisage fixed rates to start rising in the near future.

Would strongly advise variable rate customers to consider fixing for 10 years. Boi and KBC offer good rates for 10 year fixed

Please note I'm not a financial adviser. This is only my reading of the market

KellyXX · 17-01-2018 8:40am

Cuddlesworth wrote: »

John and Mary make 6k a net month. They can save far more then 1k if they want.

We were taking home just over 6k and saving about €750 pm.
Once we made adjustments about 3 years ago when we decided to buy a house, and after that we started saving €3.5k a month. And God help anything that got in the way if us making our target savings every month after that. I even stressed out big time about the hit that a rent rise would of had on our target. I thought if the target as not our money. I didn't even count it and considered it gone, once it went into savings.
Any raises were instantly added to savings.

We were always chasing the market. Our mortgage afordability was rising, but so we're prices, so we couldn't quite get there even though what we could borrow kept increasing as did our savings, then we had a bit of a windfall that took us over the line so that we can comfortably buy now.
But the more you can afford by saving, the higher the prices go while you are saving, so it's hard. We were saving 40k a year, and the banks were saying we could increase our borriwng ability far beyond the 40k we save yet prices were rising that fast and faster.

KellyXX · 17-01-2018 8:42am

Villa05 wrote: »

Calling the bottom in the interest rate cycle. I envisage fixed rates to start rising in the near future.

Would strongly advise variable rate customers to consider fixing for 10 years. Boi and KBC offer good rates for 10 year fixed

Please note I'm not a financial adviser. This is only my reading of the market

When did you first think interest rates would start rising? I think it every year now for the last 6 or 7

. I still think it.

The_Conductor · 17-01-2018 8:45am

KellyXX wrote: »

When did you first think interest rates would start rising? I think it every year now for the last 6 or 7 . I still think it.

The ECB slashed its QE (quantitative easing) programme in half on the 1st of January- and are scheduled to reappraise it on the 1st of September.
Inflation rates in the Eurozone are already hovering above comfortable levels- with food and fuel recently soaring. The Fed in the US- have now had 3 interest rate rises- and its suggested there will be 2 there later this year...........

Interest rates rising are a foregone conclusion.

KellyXX · 17-01-2018 8:49am

The_Conductor wrote: »

Interest rates rising are a foregone conclusion.

I never heard that before

Property Market 2018

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