Central Bank to limit amount banks lend for home purchase

jester77

LordNorbury wrote: »

That sounds like the opinion of a classic Irish property investor who believes that someone should be grateful to rent in Tullamore, and commute to Dublin every day where they work. Why is this the extent of our vision in this country every time this comes up for discussion? What is so brazen about NOT wanting to spend 3 hours commuting to and from work every day of the week???

The problem here in this country is simply one of vision, there is a "go fúck yourself, who do you think you are?" attitude to people in this country who wish to have some basic security of tenure in this country that comes with residential property ownership, and who also wish to enjoy the smallest quality of life that comes with not having to spend 2-3 hours a day in your car driving to work.

I never said anything about commuting, your logic doesn't make sense. If you are in position where you can only afford to rent in Tullamore while working in Dublin, then why should that person be entitled or even afford to purchase a house in Dublin?

LordNorbury

drumswan wrote: »

You are confusing housing and property ownership. Its this hysterical need to own the property you live in that the rest of us need to be protected from.

That is the very lack of vision that I'm referring to. I know well what the difference is between property ownership and housing. The problem in this country is that it is full of gombeens, you have teachers and Gardai owning huge swaths of property in Dublin city and beyond. There are not even enforceable laws in relation to security of tenure in this country. Even if there were, if you end up in a dispute with a landlord in the capital of this country right now, renting another property and working through your dispute with your previous landlord via the PTSB, is not a realistic option for you due to the chronic unavailability of housing, you are facing straight into homelessness.

This is what life was like in the Dublin tenements in the 1900's, which were the slums of Europe back in those times, 100 years later, here we are back in the very same place!

jester77

GinaI wrote: »

will there be a pension in 30-40 years time is another question. I don't believe current pesnion is enough to pay rent.

No one should be relying on the government pension, start a private pension. This is one of the first things I did when I started working. I meet up with my pension advisor every few years and adjust the pension accordingly. If tomorrow was my retirement, my pension would start with roughly the same payments as my salary. I will adjust this as my career moves on and my earnings change.

mariaalice

I still think there is too much panic about this and the whole property market, you would think no one would every be able to buy a house every again and its panicking people in to buying before the new rules come in.

For example you can get a 3 bed semi in Clonsilla for under 200k, its not Castleknock, but its grand and more importantly its affordable for the average couple, its got good transports links and its only about 5km to the phoenix part which fabulous to have on you door step. There are still perfectly nice areas in Dublin that are affordable.

matt-dublin

i think you should check this out. unless you're in the public sector your pension will never be the same as your salary.

the majority of people i know on typical wages investing into their pensions are only coming out with €100-200 a week.

also if you own your house you will have a lesser requirement for a higher pension.

You will still have to pay water charges, property taxes, elextricity, tv licence, management fees, gas, oil etc but you won't have to pay rent.

LordNorbury

jester77 wrote: »

I never said anything about commuting, your logic doesn't make sense. If you are in position where you can only afford to rent in Tullamore while working in Dublin, then why should that person be entitled or even afford to purchase a house in Dublin?

I never said anyone would be "entitled" to live anywhere. The point I was obviously making is that it is not an audacious idea to have in your head, to wish to live in some sort of proximity to where you work. Yet in this country we treat that and perceive that as an audacious idea. Your logic being that if you can only afford to live in Tullamore (because of the unavailability of property in Dublin which probably suits you down to the ground as you are starting to sound like someone who owns investment property in Dublin!), then down to Tullamore or Edenderry with you and don't be making a nuisance out of yourself with your talk of wanting to live somewhere that isn't a 10 day camel ride from where you work!

This argument that you are making suits only one category or class of person, and that is the Dublin investment property owning class of person. Everyone else, pursuant to that argument you are making, can just go fúck themselves, and that is the part of what you are saying that I fundamentally disagree with. Unaffordable housing, (due the the wholesale unavailability of property in Dublin for sale or for rent), needs to stop being about the needs of a small cabal of investment property owners and needs to start being about the needs of people who have a fundamental human need called housing.

pwurple

LordNorbury wrote: »

Well you must not have been living in this country for the last 10 years if you can't see how greed and rampant and insane speculation (based upon nothing other than people buying numerous houses as a purely speculative exercise rather than them buying a house for them to reside in), has not been the central cause of the property crash in this country and the general unaffordability of housing both before and after the crash.

Am I imagining that the overnight queues for property in Dublin back around 2005 and 2006 and 2007 well packed full of fat greedy overweight dopey BMW 5 Series driving speculators who were buying off plans and leveraging equity from their housing portfolio against their next property, pricing those who wanted to buy the same property to live in, out of the market???

And pray tell me, how requiring smaller deposits is the solution to that? Because where I'm sitting, making credit as easy to get as a sandwich is a massive contributor to the issue.

This thread isn't even about speculation, or investment buyers, because it's a tighter set of rules again being proposed there (which I also welcome)

Deadwards.com

Sorry, slightly random rant and questions below:

Interesting thread but I see a few issues here.
BTW I have a house and my mother just downsized so none of us are looking to move just now.
Also I do agree that property pricing is insane currently having spent the last 8 months looking with my mother before she found her new home.

1. The impact of this new change by the CBI as people are stating, may rule out FTB and leave the market ripe for investors.

2. Investors may dry up and in time this could and should see a reduction in property pricing of existing stock – (less possible purchasers who can afford it).

3. We continue to leave the rental market as a cash rich investment bubble rather than property. (Just shifting the issue elsewhere).

Point 2 & 3, will investors dry up if it is a cash cow or will we see funds buying up all the available property if the returns are viable?

4. Existing home owners will never get near to their current mortgage value so will not sell thus restricting supply further.

How long do you predict it will take for property in the €400K+ segment to drop to mid €200K values which would be more achievable to the majority of average income workers? 5 years?

In the meantime, landlords rake it in, young people say fcuk this and move abroad furthering our current brain drain, leaving those not able, or good enough here? (Not great for society as a whole).

In terms of the new ‘case by case’ exceptions, having a public job will be seen as a risk worth betting on for the banks so the private sector worker can shag off. Come election time, how many voters are public sector?

A few other questions:

Will we start to see the adoption of generational mortgages along the lines of NYC?

Rental controls are in place throughout most areas in Europe but not here, are these being brought in?

Just seems like a well intentioned plan but as always, not thought through and rushed out leaving the public in fear and panic.

wonder what 'kite flying' we will see in the next few days about this pre-budget time.

noodler

About time this measure was introduced.

vinylbomb

drumswan wrote: »

Security of tenure can be delivered through rent legislation as it is elsewhere.

There is no sign of this being forthcoming. If the measures being mooted were in conjunction with legislation of this type it may make the whole thing more palatable, but that is not the case.

Whats happening is the CBI is using every tool it has to wash its hands of the problem, so there is absolutely no chance of accusations of "Sleeping behind the wheel" again. The problem then becomes a government issue, a political football, and damn the consequences.

gladrags

on_my_oe wrote: »

The investors win.

First Time Buyers are now less than 5% of the market in NZ, with investors (landlords and Funds) making up 65%. The remainder is repeat purchasers.

Sorry, I thought you were referring to Ireland,not New Zealand.

El_Dangeroso

The Spider wrote: »

well if prices drop, so will property taxes, and there wont be much water used in an unoccupied house. However I don't think this will bring down prices, it's just going to turn Dublin into New York, where everyone pays extortianate rent and only the very wealthy buy.

As you're so fond of reminding us, you bought at the bottom of the market in 2012. Now explain to us why prices were lower then than they are now. Did we have more supply in 2012? From what I can recall there was much less for sale, yet prices were lower. Explain.

drumswan

LordNorbury wrote: »

That is the very lack of vision that I'm referring to. I know well what the difference is between property ownership and housing. The problem in this country is that it is full of gombeens, you have teachers and Gardai owning huge swaths of property in Dublin city and beyond. There are not even enforceable laws in relation to security of tenure in this country. Even if there were, if you end up in a dispute with a landlord in the capital of this country right now, renting another property and working through your dispute with your previous landlord via the PTSB, is not a realistic option for you due to the chronic unavailability of housing, you are facing straight into homelessness.

This is what life was like in the Dublin tenements in the 1900's, which were the slums of Europe back in those times, 100 years later, here we are back in the very same place!

All this needs to be addressed by rental market reforms, not by driving another property bubble. You seem very confused.

jester77

LordNorbury wrote: »

I never said anyone would be "entitled" to live anywhere. The point I was obviously making is that it is not an audacious idea to have in your head, to wish to live in some sort of proximity to where you work. Yet in this country we treat that and perceive that as an audacious idea. Your logic being that if you can only afford to live in Tullamore (because of the unavailability of property in Dublin which probably suits you down to the ground as you are starting to sound like someone who owns investment property in Dublin!), then down to Tullamore or Edenderry with you and don't be making a nuisance out of yourself with your talk of wanting to live somewhere that isn't a 10 day camel ride from where you work!

This argument that you are making suits only one category or class of person, and that is the Dublin investment property owning class of person. Everyone else, pursuant to that argument you are making, can just go fúck themselves, and that is the part of what you are saying that I fundamentally disagree with. Unaffordable housing, (due the the wholesale unavailability of property in Dublin for sale or for rent), needs to stop being about the needs of a small cabal of investment property owners and needs to start being about the needs of people who have a fundamental human need called housing.

I'm not making any argument, you are the one stating that someone on a minimum wage job should be able to afford a house in Dublin. Unfortunately that is not how the market works and that person will either have to get a better paying job, commute or move to where there are jobs that are close to property they can afford. It's a free & competitive market in Ireland and you have to earn your way. Giving everyone a house at any cost is why Ireland is in the mess it is.

drumswan

vinylbomb wrote: »

There is no sign of this being forthcoming. If the measures being mooted were in conjunction with legislation of this type it may make the whole thing more palatable, but that is not the case.

If these measures move us more toward the European model with the majority renting there will be far more political will for rental reform. Another bonus.

LordNorbury

pwurple wrote: »

And pray tell me, how requiring smaller deposits is the solution to that? Because where I'm sitting, making credit as easy to get as a sandwich is a massive contributor to the issue.

This thread isn't even about speculation, or investment buyers, because it's a tighter set of rules again being proposed there (which I also welcome)

I don't know when you last bought a "sandwich" as you have put it, for 20K or 30K.

The issue here is affordability. This thread and the forum it is in, obviously there is a high degree of contribution on thread from the very class of people who are causing the issue here, which are Dublin investment property owners, whether they be accidental landlords or otherwise.

It doesn't suit that class of people to hear words like "rent control", or "affordable housing".

But where someone needed 35K to buy a house, and they now need 70K, that is going to do absolutely nothing except push hard working families who could afford a home under the 10% deposit rule, completely out of the market under the 20% rule! What else can it do except for that and what point is achieved by having such a rule?!?

vinylbomb

drumswan wrote: »

If these measures move us more toward the European model with the majority renting there will be far more political will for rental reform. Another bonus.

I'm assuming by "European" model you actually mean German model (which was borne out of very specific circumstances in the post WW2 era, when the country had been flattened and there basically was no housing.)

Because the majority of Europeans do not rent.

"In 2012 over one quarter (27.2 %) of the EU-28 population lived in an owner-occupied home for which there was an outstanding loan or mortgage, while more than two fifths (43.4 %) of the population lived in an owner-occupied home without a loan or mortgage. As such, just over seven out of every 10 (70.6 %) persons in the EU-28 lived in owner-occupied dwellings, while 18.5 % were tenants with a market price rent, and 10.9 % tenants in reduced-rent or free accommodation"
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Housing_statistics

hmmm

hmmm wrote: »

There's no constraint on housing, there's a constraint on people's ability to borrow. You can either rent or buy somewhere cheaper. Human rights and "EU agenda", I ask you.

What's an "Irish agenda"? Allow people to borrow 6 times their income again? Is that your plan for the future?

Firstly, and let's say this loud and clear and make sure it is understood - joe soap not repaying his or her mortgage did not cause the economic crisis. The "we all partied" myth is just that. Most people put a roof over their head - or more likely their children's heads. And most did not default. In fact consumer mortgage default was almost non-existent at the time of the bailout, at the time of the housing crash, and at the time of massively increasing unemployment. Mortgage default is a symptom, not the disease.

On to the topic at hand, the 'Irish agenda', as aways, is the ongoing running of this country in the interests of landowners, developers, gombeens and cute hoors at the expense of people with proper jobs adding rather than subtracting value.

That is why this government has encouraged investment in property (!) in order to boost prices at the same time as (now) cutting off hope for young families who want shelter. Great policy.

As said above - if the government wants to reduce house prices, there are ways. There are ways that could be introduced NOW (90% CGT on all non owner-occupied property profits) that would make that happen. But it won't happen (see gombeens etc above)

I speak btw as a very comfortably off 40 something with no problems paying off my ridiculous tracker mortgage but who cares about the future of this country.

pwurple

LordNorbury wrote: »

I don't know when you last bought a "sandwich" as you have put it, for 20K or 30K.

The issue here is affordability. This thread and the forum it is in, obviously there is a high degree of contribution on thread from the very class of people who are causing the issue here, which are Dublin investment property owners, whether they be accidental landlords or otherwise.

It doesn't suit that class of people to hear words like "rent control", or "affordable housing".

I'm not a dublin property owner at all, so I don't know who the heck you are talking to when you quote my posts and start this chip-on-shoulder stuff?

But where someone needed 35K to buy a house, and they now need 70K, that is going to do absolutely nothing except push hard working families who could afford a home under the 10% deposit rule, completely out of the market under the 20% rule! What else can it do except for that and what point is achieved by having such a rule?!?

70k! That's what's needed to buy a 350k house. How on earth do you think this is reasonable for someone 3 to 5 years out of college is just mind boggling.

The rule, bluntly, is being put there to protect people from their own non-existant financial planning. It is not prudent to buy a home with no wiggle room. Things go belly up, often.

hmmm

hmmm wrote: »

T
If you can't save a 20% deposit, you're a bad credit risk. Interest rates will never be as low as they are now.

You are aware that low interest rates make it harder to save a 20% deposit?

Barely Hedged

LordNorbury wrote: »

you have teachers and Gardai owning huge swaths of property in Dublin city and beyond.

I want figures for that statement otherwise its nothing but hyperbole and nonsense

LordNorbury wrote: »

if you end up in a dispute with a landlord in the capital of this country right now, renting another property and working through your dispute with your previous landlord via the PTSB, is not a realistic option for you due to the chronic unavailability of housing, you are facing straight into homelessness.

I think you'll find the whole process is heavily weighted towards sitting tenants.

LordNorbury wrote: »

This is what life was like in the Dublin tenements in the 1900's, which were the slums of Europe back in those times, 100 years later, here we are back in the very same place!

Yet more hyperbole

gladrags

jester77 wrote: »

What constraint? All I see are sensible lending criteria. If you are unable to meet them then there are other options available that doesn't deny anyone their basic needs.

That's part of the problem,all YOU see.

Lending in this case,is only sensible for the lender.

They hold the trump cards.

You are correct, there are other options, to corrupt banks,developers and various other parasites and greed merchants.

We need other alternitaves.

LordNorbury

jester77 wrote: »

I'm not making any argument, you are the one stating that someone on a minimum wage job should be able to afford a house in Dublin. Unfortunately that is not how the market works and that person will either have to get a better paying job, commute or move to where there are jobs that are close to property they can afford. It's a free & competitive market in Ireland and you have to earn your way. Giving everyone a house at any cost is why Ireland is in the mess it is.

Can you please quote me where I said that?

The Spider

El_Dangeroso wrote: »

As you're so fond of reminding us, you bought at the bottom of the market in 2012. Now explain to us why prices were lower then than they are now. Did we have more supply in 2012? From what I can recall there was much less for sale, yet prices were lower. Explain.

Prices were lower in 2012 because no one was buying, they were holding out for more drops. This time there's limited supply and high rents which will go higher, investors stand to get a fantastic return so will continue to snap up property and rent it out to the people who can't save a 20% deposit, and theareas that people want to live will always remain high.

Michael D Not Higgins

Do gifts still count for the 20% deposit? The deposit is supposed to demonstrate a capability to save in line with the cost of the purchase. Being handed that by your parents demonstrates nothing.

jester77

gladrags wrote: »

That's part of the problem,all YOU see.

Lending in this case,is only sensible for the lender.

They hold the trump cards.

You are correct, there are other options, to corrupt banks,developers and various other parasites and greed merchants.

We need other alternitaves.

Of course it's sensible for the lender, they are the ones taking the risk by offering loans over 30 years. Look at what happened when they didn't apply sensible lending criteria. Unfortunately there are too many clueless people out there who don't understand basic finances.

Long term steady savings will build up a decent deposit once it comes to around to the time a person wants to buy a house. The idea of being able to walk into a bank and walk out with a 100% mortgage was just stupid from both sides.

El_Dangeroso

The Spider wrote: »

Prices were lower in 2012 because no one was buying, they were holding out for more drops. This time there's limited supply and high rents which will go higher, investors stand to get a fantastic return so will continue to snap up property and rent it out to the people who can't save a 20% deposit, and theareas that people want to live will always remain high.

Investor returns are already at 4% in most cases, so the only thing that will encourage them is... price drops.

Time will tell, but if prices slip back in the new year based on a now decimated FTB cohort, who's to say the same thing won't happen.

As you say, supply and demand, you can't just ignore a drop in demand.

vinylbomb

jester77 wrote: »

Unfortunately there are too many clueless people out there who don't understand basic finances.

This line is being trotted out again and again, but youre only exposing your own ignorance in saying it.
In reality the reason that we had a bust last time was because of imprudent lending to developers, and to a lesser degree mortgage lending to individuals.

IF the proposed regulations were coupled with strong renter-friendly legislation, zero-tolerance for loans that are in repossession criteria and inducement of developers to put housing on standing land banks then it may make sense.

But as ever in Ireland, the left hand doesnt know what the right is doing.

The Spider

El_Dangeroso wrote: »

Investor returns are already at 4% in most cases, so the only thing that will encourage them is... price drops.

Time will tell, but if prices slip back in the new year based on a now decimated FTB cohort, who's to say the same thing won't happen.

As you say, supply and demand, you can't just ignore a drop in demand.

Agree with that I suppose, however I do stand by the fact that rents are going to skyrocket. Whether it'll lead to price drops remains to be seen as has been said that this isn't a credit driven bubble, banks have been lending more prudently than ever.

I wouldn't like to put a bet on it, but I do think that you may have people who've got a twenty percent deposit together holding back until they see which way it looks like it's going to go.

gladrags

jester77 wrote: »

Unfortunately there are too many clueless people out there who don't understand basic finances.

Right, are these the same ones who were educated in the finest institutions,and who populated every corner of the property market?

Who were cheerled during the Celtic tiger for their "genius", and in return,ransacked the coffers?