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Dublin is burning

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    #32
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    SkepticOne wrote: »
    Two incomes being used to pay a mortgage is not a particularly new thing. In the past it was 90% mortgages of 2.5 times one income plus 1.5 times the other or thereabouts being awarded.
    That still only comes to 4x average wage though, assuming both partners are on the average wage or in cash terms €130k, which won't get you much of anything. Its still got a long way to fall.


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    #33
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Yes it is 4x one income rather than 4 or 5x both incomes.


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    #34
    Kipperhell
    Closed Accounts Posts: 1,477 ✭✭✭Kipperhell


    SkepticOne wrote: »
    Two incomes being used to pay a mortgage is not a particularly new thing. In the past it was 90% mortgages of 2.5 times one income plus 1.5 times the other or thereabouts being awarded.

    A lot of people convinced themselves during the boom that we had entered a period of permanently relaxed credit and prices rose accordingly.

    What this fails to include is the other changes to society. Housing stock has changed from being 3 bed houses to a more varied stock. Less people live in each property as a result (1926 4.48 people in each household 2006 2.81). The ratio of mortgage rates would also have been radically different too.

    AFAIK the property bought in the last 10 years had a huge increase in single people purchasing which didn't involve double incomes. It seems likely to me that property bought by a couple will be based on what they can afford. So in some areas you will have a single income living in a place beside a couple with double income. I really don't see why some hypothetical average ratio is a rule we must return to especially when it has very little statistical data backing it up on a commodity that last at least two life times.

    Everything around me suggests the concept of a parent staying home while one main income earner stays in work has gone for the majority. Woman don't want to do and it is not expected of them and men have rarely done it period.

    So a double income family is more likely to buy a property in a better neighbourhood than their single income would allow is the most likely thing rather than one of them leaving the work force. Unemployment could force the situation I will grant that but that does not make it a fundamental of the "ratio theory" as it is it's own cause and effect.

    There doesn't seem to be any explanation of why the magic ratio will happen only crying about why it should. Is there a similar ratio for all things? I mean health insurance sounds like it should have such a ratio. Hasn't the ratio of food costs to average wage existed for a long time and noted for changing seems a lot more fundamental than house prices. Given things are changing constantly why will this ratio stay the same?


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