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Housing bargains

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    #32
    astrofool
    Registered Users Posts: 16,650 ✭✭✭✭astrofool


    You're still not getting it. People limit themselves based on what the banks let them borrow. The banks base this on the security of them getting the monthly mortage payment from that person, as job security drops, so does the amount that people are able to borrow, it is a system that feeds on itself (and is also being affected today by the general lack of credit available in the system). In the boom times, the banks were a driving force behind the high prices, because of the amount they let people borrow, if the banks never loaned those amounts, then prices would have been much lower.

    I hope you're not referring to me btw, I've been able to skip the "property ladder" entirely, live 15 minutes from work (Dublin), have a large house, and have a good LTV. I did save and rent when I needed to, so that I was able to do this.

    Unfortunately, most people don't do this, and that's not going to change, no matter how much YOU tell them to. The first thing people check is how much they can borrow, and then start looking from there. Very few people will settle for a smaller, cheaper home, given the choice (and the choice being available based on what the bank is willing to loan them).


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    #33
    spockety
    Moderators, Education Moderators Posts: 5,468 Mod ✭✭✭✭spockety


    astrofool wrote: »
    You're still not getting it. People limit themselves based on what the banks let them borrow. The banks base this on the security of them getting the monthly mortage payment from that person, as job security drops, so does the amount that people are able to borrow, it is a system that feeds on itself (and is also being affected today by the general lack of credit available in the system). In the boom times, the banks were a driving force behind the high prices, because of the amount they let people borrow, if the banks never loaned those amounts, then prices would have been much lower.

    I hope you're not referring to me btw, I've been able to skip the "property ladder" entirely, live 15 minutes from work (Dublin), have a large house, and have a good LTV. I did save and rent when I needed to, so that I was able to do this.

    Unfortunately, most people don't do this, and that's not going to change, no matter how much YOU tell them to. The first thing people check is how much they can borrow, and then start looking from there. Very few people will settle for a smaller, cheaper home, given the choice (and the choice being available based on what the bank is willing to loan them).

    I would tend to agree with most of what you said, and it really comes down to human nature at the end of the day.

    However, what we are witnessing now in relation to banks in particular, shows us that the policies they employed over the last 10 years were nothing short of out and out wreckless. They might have been offering 100% mortgages, 40 year mortgages, 8x annual salary, etc., but it was not a sustainable practice, and it has now come back to haunt them.

    They should have been more tightly regulated. It wasn't like people didn't know what was going on.

    I believe that banks should be forced into practices that mean:

    * Max 25 years on a home mortgage
    * Max 92% loan to value on a home mortgage
    * Max 35% disposable income stress tested against 2% increases in interest as the affordability calculator.


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    #34
    astrofool
    Registered Users Posts: 16,650 ✭✭✭✭astrofool


    spockety wrote: »
    I believe that banks should be forced into practices that mean:

    * Max 25 years on a home mortgage
    * Max 92% loan to value on a home mortgage
    * Max 35% disposable income stress tested against 2% increases in interest as the affordability calculator.

    Never going to happen. What will happen is that calculation of risk will have to change, but give it a few years, and they'll find another way around it (as they always do). All it takes is one bank to break ranks, and they all have to follow.


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    #35
    Eglinton
    Closed Accounts Posts: 992 ✭✭✭Eglinton


    spockety wrote: »

    I believe that banks should be forced into practices that mean:

    * Max 25 years on a home mortgage
    * Max 92% loan to value on a home mortgage
    * Max 35% disposable income stress tested against 2% increases in interest as the affordability calculator.

    I fully agree. It's the only way to ensure sustainable long term borrowing vs repayments and protect the 'family' unit from shocks to income levels.


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    #36
    spockety
    Moderators, Education Moderators Posts: 5,468 Mod ✭✭✭✭spockety


    astrofool wrote: »
    Never going to happen. What will happen is that calculation of risk will have to change, but give it a few years, and they'll find another way around it (as they always do). All it takes is one bank to break ranks, and they all have to follow.

    Not if we (the taxpayer) end up owning them all.

    :mad: :mad: :mad:


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    #37
    321654
    Closed Accounts Posts: 315 ✭✭321654


    punchestown wrote: »
    Funny that because a number of my friends are in serious trouble. One girl who took out an interest only mortgage on her home in Clonee 2 years ago has made no impact on the prinicpal sum of her mortgage. The apartment has dropped by €150,000 (realistical valuation)
    Another couple who took out the classic 35 year mortgage one monthly wage covering the mortgage payment for the month living off the other partners wage. He has just lost his well paid job. Her job is under serious threat.

    Sadly, I am fairly certain the above two scenarios are playing out in thousands upon thousands of households up and down the country.

    I guess we have different friends.


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    #38
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    spockety wrote: »
    Not if we (the taxpayer) end up owning them all.

    :mad: :mad: :mad:

    Its not going to happen- because the terms attached to the preference shares are too lucrative to the NTMA- where else will they get 8% return on investments- which looks like it will comprise almost half the entire pre-tax profits of the institutions for the forseeable future. Even if they have to borrow the money (at Euribor + 2.88%)- they are still making a profit on the transaction- providing they don't guarantee any of the non-performing loans (which look to be in the region of 40 billion from a combined commercial loan book of just over 82 billion).

    All hell will break loose when we loose our AAA credit rating- possibly as soon as tomorrow.......


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    #39
    punchestown
    Registered Users Posts: 660 ✭✭✭punchestown


    Freddie59 wrote: »
    It's an interest only mortgage?:confused: Might have something to do with it.....

    Apologies, the basic point being made was that the girl is down at least €125,000. :rolleyes:


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    #40
    Money Shot
    Closed Accounts Posts: 603 ✭✭✭Money Shot


    Freddie59 wrote: »
    It's an interest only mortgage?:confused: Might have something to do with it.....

    Strange as it may seem, there are lots of people who aren't very financial savvy, and didn't look past the short term to make assumptions on property values rising exponentially for the next two decades. Not clever, but the fact is that lots, and I mean lots of people got into these mortgages. Mainly single people who thought it was an investment that would set them up for life.

    Sadly, like all above average return investment opportunities, they do go down as well as up. I feel sorry for anyone in this situation with kids, but the wanna be mini property developers - my sympathy is limited.


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    #41
    JuliusCaesar
    Registered Users Posts: 4,882 ✭✭✭JuliusCaesar


    Slideshowbob wrote: »
    Anyone heard of remarkable reductions on guide prices against actual prices houses went for?

    having gone off topic again, could we go back to the original question?

    Has anyone had an offer accepted that was well below the asking price? Lots of would-be buyers would like to know!


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    #42
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    3 bed townhouse in Lucan village- originally valued at 475k (Aug2007) has been on the market for 14 months (executor sale) now advised asking price of 345k. Offer of 280k accepted, however fell through as bank valuation was below that offered, and the potential buyer was unable to access the necessary funds.

    Link here

    :eek:


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    #43
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    smccarrick wrote: »
    3 bed townhouse in Lucan village- originally valued at 475k (Aug2007) has been on the market for 14 months (executor sale) now advised asking price of 345k. Offer of 280k accepted, however fell through as bank valuation was below that offered, and the potential buyer was unable to access the necessary funds.

    Link here

    :eek:
    It would probably have been well over 500k at the peak in 2006. Do you know what the banks valuation was?


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    #44
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    SkepticOne wrote: »
    It would probably have been well over 500k at the peak in 2006. Do you know what the banks valuation was?

    No.
    I do know they're on their 3rd estate agent though.......


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    #45
    321654
    Closed Accounts Posts: 315 ✭✭321654


    smccarrick wrote: »
    3 bed townhouse in Lucan village- originally valued at 475k (Aug2007) has been on the market for 14 months (executor sale) now advised asking price of 345k. Offer of 280k accepted, however fell through as bank valuation was below that offered, and the potential buyer was unable to access the necessary funds.

    Link here

    :eek:

    Where did you find out all of this info about the potential buyer, what they offered and the state of their finances?


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    #46
    ionapaul
    Registered Users Posts: 5,297 ✭✭✭ionapaul


    astrofool wrote: »
    You were trying to base house prices on the same lending criteria as from the 80's, I was trying to point out that the demographics have changed in the mean time, and the old formula were useless, as the banks will never limit themselves to those criteria any more. Even now, during the credit crunch, banks lending practices still allow for 92% loans over 35 years.

    In other words, IRELAND IS DIFFERENT and there is a new paradigm?!!!!!! :rolleyes:

    We heard the exact same stuff during the last bubble - the new economy was different and the dotcoms had introduced a new paradigm for company valuations, right?


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    #47
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    321654 wrote: »
    Where did you find out all of this info about the potential buyer, what they offered and the state of their finances?

    From the management company and the brother of the former occupant.


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    #48
    astrofool
    Registered Users Posts: 16,650 ✭✭✭✭astrofool


    ionapaul wrote: »
    In other words, IRELAND IS DIFFERENT and there is a new paradigm?!!!!!! :rolleyes:

    We heard the exact same stuff during the last bubble - the new economy was different and the dotcoms had introduced a new paradigm for company valuations, right?

    eh, what? Are you trying to say that now, in the depths of recession, jobs being lost daily, with the bank system in tatters, that the banks will give credit more freely than in a few years time if/when we're coming out of it? And why mention Ireland, these are the criteria being used all over the world today.


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    #49
    321654
    Closed Accounts Posts: 315 ✭✭321654


    ionapaul wrote: »
    In other words, IRELAND IS DIFFERENT and there is a new paradigm?!!!!!! :rolleyes:

    We heard the exact same stuff during the last bubble - the new economy was different and the dotcoms had introduced a new paradigm for company valuations, right?

    This is fast becoming the mantra of the bears now.

    Its as bad as the same mantra of the bulls a couple of years ago.


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    #50
    321654
    Closed Accounts Posts: 315 ✭✭321654


    smccarrick wrote: »
    From the management company and the brother of the former occupant.

    Oh right. So nothing variable then. Pity.


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    #51
    JuliusCaesar
    Registered Users Posts: 4,882 ✭✭✭JuliusCaesar


    smccarrick wrote: »
    3 bed townhouse in Lucan village- originally valued at 475k (Aug2007) has been on the market for 14 months (executor sale) now advised asking price of 345k. Offer of 280k accepted

    Now THAT'S useful information for prospective buyers, who are wondering how much of an offer to make! Pity they have to wade through to page 3 to get an answer to the original post.....:rolleyes:

    (may be useful to prospective sellers too)

    PS lads, would you save the (off topic) discussion for the Housing Bubble forum where it more properly belongs.


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    #52
    ionix5891
    Closed Accounts Posts: 1,033 ✭✭✭ionix5891


    JuliusCaesar wrote: »
    Now THAT'S useful information for prospective buyers, who are wondering how much of an offer to make! Pity they have to wade through to page 3 to get an answer to the original post.....:rolleyes:

    (may be useful to prospective sellers too)

    PS lads, would you save the (off topic) discussion for the Housing Bubble forum where it more properly belongs.

    we have a housing bubble forum?


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    #53
    321654
    Closed Accounts Posts: 315 ✭✭321654


    JuliusCaesar wrote: »
    Now THAT'S useful information for prospective buyers, who are wondering how much of an offer to make! Pity they have to wade through to page 3 to get an answer to the original post.....:rolleyes:

    (may be useful to prospective sellers too)

    PS lads, would you save the (off topic) discussion for the Housing Bubble forum where it more properly belongs.


    Hardly something we can verify and get similar info on other properties for ourselves though. Also that property isnt even worth looking at. not even n the boom. Some chancer trying it on id say. €400k my ass, even in boom times.

    Timing the bottom is not going to be as easy as i thought it would be :)

    I'll have to wait for a varifiable trend i think.


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    #54
    ionapaul
    Registered Users Posts: 5,297 ✭✭✭ionapaul


    321654 wrote: »
    This is fast becoming the mantra of the bears now.

    Its as bad as the same mantra of the bulls a couple of years ago.
    The mantra that 'we've heard this sort of clap-trap before, it was wrong then and it is wrong now'?

    Ireland is NOT different - that is the bottom line. Those who believed so are proven more inaccurate with every passing month.


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    #55
    321654
    Closed Accounts Posts: 315 ✭✭321654


    ionapaul wrote: »
    The mantra that 'we've heard this sort of clap-trap before, it was wrong then and it is wrong now'?

    Ireland is NOT different - that is the bottom line. Those who believed so are proven more inaccurate with every passing month.



    There are Ups and downs.
    At the top of the ups everyone thinks the good times will never end.
    At the bottom everyone thinks the good times will never end.

    As good as it gets it will eventually turn down.
    As bad as it gets it will eventually turn up.

    In 2006 people said prices would never fall or wouldnt fall in the meduim term and some who said they would go on rising forever..
    Now you have people saying prices will never rise in the medeium term and some who say prices will fall forever.

    Its the same for ups and downs of house prices, industry, pubs, wages, retail, etc. The entire economy.

    Ireland is definitely not different. It will recover in time. I know it doesnt seem like it, but it will.


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    #56
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    The thread title says 'Housing Bargains'

    Well, where are they? ;)


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    #57
    JuliusCaesar
    Registered Users Posts: 4,882 ✭✭✭JuliusCaesar


    gurramok wrote: »
    The thread title says 'Housing Bargains'

    Well, where are they? ;)

    :D

    There's one :eek: got through this extention of the Housing Bubble thread...........


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    #58
    JuliusCaesar
    Registered Users Posts: 4,882 ✭✭✭JuliusCaesar


    http://www.irishpropertywatch.com/

    records drops in Asking Prices - don't give Price Accepted, unfortunately....


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    #59
    Freddie59
    Closed Accounts Posts: 6,679 ✭✭✭Freddie59


    JuliusCaesar wrote: »
    http://www.irishpropertywatch.com/

    records drops in Asking Prices - don't give Price Accepted, unfortunately....


    www.treesdontgrowtothesky.com

    Intersting reading. And bargains indeed.;):)


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