Central Bank to limit amount banks lend for home purchase

matt-dublin

matt-dublin wrote: »

<snip>
So basically everything is against the buyers.

Not everything (although I take your point and I hate both my landlord and their crappy gaff from which I write:mad:). The day before the new rules are to come in, the Capital Gains Tax exemption for investors will end. I don't know how big an impact that will have (guess: bigger in city centres, near hospitals and colleges) but it's something.

Fewer investors and buyers with less credit must have a negative effect on price rises. Whether that means -5% instead of +2%, or +5% instead of +12% hardly changes the point. It's better to dampen things down before they go off the chart.

I have sympathy for people who have just pulled together 10% of what they hope to spend. But if you had 5% you'd be screwed because prices this year have risen faster than most people can save.

Even the guy with 10% of, say, 350k is bunched if next year is the same as this year. If he can't find something quickly (and we all know supply is scant) then his 350k house will cost 400k next December and will spiral out of reach forever - until there's a full-on property bust which is bad for the economy in a very real way!

AusterityII: The Sequel We Could Have Been Spared
Coming to an episode of Prime Time near you in 2020?

El_Dangeroso

Deleted User wrote: »

The day before the new rules are to come in, the Capital Gains Tax exemption for investors will end. I don't know how big an impact that will have (guess: bigger in city centres, near hospitals and colleges) but it's something.

Fewer investors and buyers with less credit must have a negative effect on price rises. Whether that means -5% instead of +2%, or +5% instead of +12% hardly changes the point. It's better to dampen things down before they go off the chart.

I really did think that the end of CGT exemption would have an effect. Now I'm not so sure any more. I'd say most investors are buying for the % return on rent rather than capital appreciation (well the smart ones should be).

In this case, the new rules (which I am totally in favour of as a long term measure towards prudence), could cause an investor swoop and bouy the market that way.

As I said these rules are very necessary, but where I thought there would be drops in prices, now I'm not so sure. Hope to be wrong as I'm planning to buy next year.

Michael D Not Higgins

[Deleted User] wrote: »

Even the guy with 10% of, say, 350k is bunched if next year is the same as this year. If he can't find something quickly (and we all know supply is scant) then his 350k house will cost 400k next December and will spiral out of reach forever - until there's a full-on property bust which is bad for the economy in a very real way!

But someone looking to buy at 350k should have 90k income with 10% deposit. How are they having so much trouble saving a deposit at that income?

MysticalRain

The Spider wrote: »

London may be a bit of a stretch, but those other cities you mention are an even bigger stretch. A few things need to be taken into account when comparing Dublin to other cities in Europe and not just the demographic size.

Dublin's/Ireland's main export markets are with the UK and US, more than any other European country, so you really need to look west not east when making comparisons. The other thing that needs to be taken into account and it's a big one, is that Dublin is pretty much established as the technology headquarters for all the big players, Facebook, Google, SAP, Intel, Groupon...

I could go on but you get the idea, and every indigenous Irish Tech company, now the fact of the matter is that these companies command high salaries, 50k is considered a low wage in these companies (outside of tech support).

On top of that you have the IFSC and the pharma companies.

Dublin is as has been pointed out smaller than London, however the amount of big firms located in Dublin paying large salaries dwarfs the other cities you mentioned, point me in the direction of the burdgeoning tech centre in Glasgow please.

Because Dublin is so much smaller and contains so much, house prices are going to be high, and possibly higher if more and more tech companies set up here, you only have to look at the Web Summit to get an idea of how many future companies are looking towards Dublin.

Shares are given to employees in tech companies all of them have share save schemes which allows people to get big deposits together much quicker than saving alone.

In terms of property try buying a house or apartment in San Francisco and you'll see how much room there could be left for prices to rise. I think Dublin prices are going to be beyond the average worker for the forseeable future.

I think you're buying into too much of the media hype about tech companies, and I say that as someone who happens to work for one of them. Tech workers represent a very small fraction of the Irish workforce. In a typically tech company, about 80% of the workforce are non-nationals, most of whom are unlikely to ever settle down in the country, never mind build a house here (especially when they can buy much cheaper houses back in their home countries).

Secondly, most companies put restrictions on how many stock options you can cash out in a given time period. So blowing the whole lot on a deposit isn't a realistic option for most workers. Having part of your salary given to you as stock options actually works against you when seeking a mortgage because the banks quite rightly don't count it as base income.

Finally, Dublin might be a small city, but it's property scarcity is an artificial one due to restrictive planning laws that encourage inefficient use of land. We're still stuck in the year 1800 when it comes to building upward, not outward.

The Spider

MysticalRain wrote: »

I think you're buying into too much of the media hype about tech companies, and I say that as someone who happens to work for one of them. Tech workers represent a very small fraction of the Irish workforce. In a typically tech company, about 80% of the workforce are non-nationals, most of whom are unlikely to ever settle down in the country, never mind build a house here (especially when they can buy much cheaper houses back in their home countries).

Secondly, most companies put restrictions on how many stock options you can cash out in a given time period. So blowing the whole lot on a deposit isn't a realistic option for most workers. Having part of your salary given to you as stock options actually works against you when seeking a mortgage because the banks quite rightly don't count it as base income.

Finally, Dublin might be a small city, but it's property scarcity is an artificial one due to restrictive planning laws that encourage inefficient use of land. We're still stuck in the year 1800 when it comes to building upward, not outward.

Agree with some of the above and disagree with some of it, in relation to stock options, nope you can't cash them in at once the minimum is usually three years, but in a company of any reasonable size you'll have people being eligible to cash out options every year.

Yes there are a lot of foreign workers and you're right in that they may never buy. However I don't think for a second 80 percent are foreign, certainly not where I work or in other companies I've been involved with, you'd be doing well to get 20 percent.

In relation to building upwards in Dublin, how high would you build and where would you locate the buildings? Genuine question as has been seen Irish people like to have the three bed semi and a garden, I honestly think it's almost an impossible task to convince people to live in apartments long term.

Most people will always see them as 'starter homes' and I'd have to put my self amongst that number, I could never see myself permanently in an apartment, I've done it and I can safely say having your own front door and garden beats it by a million miles, in my opinion anyway.

MysticalRain

The Spider wrote: »

Agree with some of the above and disagree with some of it, in relation to stock options, nope you can't cash them in at once the minimum is usually three years, but in a company of any reasonable size you'll have people being eligible to cash out options every year.

Yes there are a lot of foreign workers and you're right in that they may never buy. However I don't think for a second 80 percent are foreign, certainly not where I work or in other companies I've been involved with, you'd be doing well to get 20 percent.

Again, I'm speaking from first hand experience here (and the company I work for is quite large too). You can't cash out shares en masse. At least not unless you retire or leave the company. That would defeat the purpose of long term staff retention from the company's perspective.

Also, 80% foreign workers is no exaggeration (and might be a tad conservative at the company I work for). I'm surprised that you seem to disagree with that (and companies like Google went on public record with their 20% figure a few years ago). I thought everyone here would know that Irish people have shunned careers in tech and don't have foreign language skills either. Hence why we have to recruit workers from abroad to do jobs that Irish people are unwilling or unable to do.

Of course it's a moot point anyway as a handful of techies allegedly rolling in money isn't going to sustain another property bubble in Dublin.

In relation to building upwards in Dublin, how high would you build and where would you locate the buildings? Genuine question as has been seen Irish people like to have the three bed semi and a garden, I honestly think it's almost an impossible task to convince people to live in apartments long term.

Most people will always see them as 'starter homes' and I'd have to put my self amongst that number, I could never see myself permanently in an apartment, I've done it and I can safely say having your own front door and garden beats it by a million miles, in my opinion anyway.

Why have height restrictions for buildings in the first place? Why not just build as high as developers want to build? You don't see that kind of non-sense in other cities around the planet. Aside from the old Georgian quarter in D2/D4, let developers put them in wherever the like.

If you are not planning on having kids, then I don't see much wrong with living in an apartment.

I tend to agree somewhat in the case of families wanting back gardens. But of course more people would actually want to live in apartments if they were made more appealing to begin with. The government could legislate for minimum sizes (like they are thinking of doing at the moment), and better facilities like play grounds for larger complexes as well. That's where the planning laws should be focused instead of nonsensical height restrictions.

matt-dublin

MysticalRain wrote: »

Again, I'm speaking from first hand experience here (and the company I work for is quite large too). You can't cash out shares en masse. At least not unless you retire or leave the company. That would defeat the purpose of long term staff retention from the company's perspective.

Also, 80% foreign workers is no exaggeration (and might be a tad conservative at the company I work for). I'm surprised that you seem to disagree with that (and companies like Google went on public record with their 20% figure a few years ago). I thought everyone here would know that Irish people have shunned careers in tech and don't have foreign language skills either. Hence why we have to recruit workers from abroad to do jobs that Irish people are unwilling or unable to do.

Of course it's a moot point anyway as a handful of techies allegedly rolling in money isn't going to sustain another property bubble in Dublin.





Why have height restrictions for buildings in the first place? Why not just build as high as developers want to build? You don't see that kind of non-sense in other cities around the planet. Aside from the old Georgian quarter in D2/D4, let developers put them in wherever the like.

If you are not planning on having kids, then I don't see much wrong with living in an apartment.

I tend to agree somewhat in the case of families wanting back gardens. But of course more people would actually want to live in apartments if they were made more appealing to begin with. The government could legislate for minimum sizes (like they are thinking of doing at the moment), and better facilities like play grounds for larger complexes as well. That's where the planning laws should be focused instead of nonsensical height restrictions.

I don't think it makes any difference, my apartment was of significant size with excellent features and amenities within minutes walk including 3 or 4 playgrounds.

I would still never live in an apartment again. Ever.

Barely Hedged

Larry Wildman wrote: »

Nobody could have predicted the scale of the collapse of the Irish economy.

In a world where tenants have f..k all protection, the people who bought apartments were prudent and responsible. Agent provocateurs hurl accusations of attempts to "flip" the apartments but that's horse manure. Those people were just doing what generations before them had done. When society is forced to hold off on having kids because of a pinch in the property market (e.g. a cohort trapped in apartments), other societal issues arise. The heartlessness of some people is breathtaking.

Buying an apartment with the aim of a few years down the line trading up to a house without considering how price differentials might affect your ability to do this is breathtaking in its ignorance of personal responsibility for a personal choice.

The scale of the collapse of the economy has nothing to do with it. Your friend(s) could have been as easily put out by a 20% fall and to not consider that - well theyve nobody to blame but themselves.

Barely Hedged

matt-dublin wrote: »

Sure look at London where a dingy 1 bed flats in Balham go for over a million pounds!!!

Nonsense.

matt-dublin wrote: »

3 bed houses in excess of several million. For absolute sh1tholes!

Nonsense x 2.

Adds nothing to the debate

Michael D Not Higgins

Barely Hedged wrote: »

Buying an apartment with the aim of a few years down the line trading up to a house without considering how price differentials might affect your ability to do this is breathtaking in its ignorance of personal responsibility for a personal choice.

The scale of the collapse of the economy has nothing to do with it. Your friend(s) could have been as easily put out by a 20% fall and to not consider that - well theyve nobody to blame but themselves.

In fairness, many people were suckered into 'getting onto the property ladder'. Now I've seen that phrase being used again in places, because people genuinely believe in it. They want to get whatever they can afford right now because renting is 'dead money' and trade up later.

gaius c

Barely Hedged wrote: »

Buying an apartment with the aim of a few years down the line trading up to a house without considering how price differentials might affect your ability to do this is breathtaking in its ignorance of personal responsibility for a personal choice.

The scale of the collapse of the economy has nothing to do with it. Your friend(s) could have been as easily put out by a 20% fall and to not consider that - well theyve nobody to blame but themselves.

Ordinary Joe Soaps shouldn't be buying apartments. They should be owned by BTL landlords to provide cheaper and flexible accommodation options for young people straight out of college (wider 20-30 age bracket basically).

One huge problem with the Irish rental sector is that apartments are way way too expensive and the people who should be living in them end up cramming into houseshares for what should be family homes thus creating further pressure on stock there.

NAMA are trying to offload 500 apartments out in Tallaght Cross. The vast majority of them are completely empty. With the news that it now costs over a grand of post-tax income to live in a sinkhole like Jobstown, the fact that these apartments are deliberately being left empty is a national scandal.

lima

MysticalRain wrote: »

Again, I'm speaking from first hand experience here (and the company I work for is quite large too). You can't cash out shares en masse. At least not unless you retire or leave the company. That would defeat the purpose of long term staff retention from the company's perspective.

Also, 80% foreign workers is no exaggeration (and might be a tad conservative at the company I work for). I'm surprised that you seem to disagree with that (and companies like Google went on public record with their 20% figure a few years ago). I thought everyone here would know that Irish people have shunned careers in tech and don't have foreign language skills either. Hence why we have to recruit workers from abroad to do jobs that Irish people are unwilling or unable to do.

Of course it's a moot point anyway as a handful of techies allegedly rolling in money isn't going to sustain another property bubble in Dublin.





Why have height restrictions for buildings in the first place? Why not just build as high as developers want to build? You don't see that kind of non-sense in other cities around the planet. Aside from the old Georgian quarter in D2/D4, let developers put them in wherever the like.

If you are not planning on having kids, then I don't see much wrong with living in an apartment.

I tend to agree somewhat in the case of families wanting back gardens. But of course more people would actually want to live in apartments if they were made more appealing to begin with. The government could legislate for minimum sizes (like they are thinking of doing at the moment), and better facilities like play grounds for larger complexes as well. That's where the planning laws should be focused instead of nonsensical height restrictions.

The tech co I work for has at least 80% foreign workers and you can only cash out about 10-20% max of your shares after about a year, and from then on every 6 or so months. They are paid high salaries and some of them spend 1200-1300 for a 1br apt and will never buy here. In fact, many of them come from other EU countries that are worse off than us and they have mortgages in those countries already.

Personally I have no issues living in an apartment. Your commuting costs are low, your mortgage is low, running an apt is cheaper (ok apart from mgmt fees). You are closer to the city for a better quality of life etc.

I just bought a repossession apt in the city centre so I'm committed to what I just said!

lima

gaius c wrote: »

Ordinary Joe Soaps shouldn't be buying apartments. They should be owned by BTL landlords to provide cheaper and flexible accommodation options for young people straight out of college (wider 20-30 age bracket basically).

One huge problem with the Irish rental sector is that apartments are way way too expensive and the people who should be living in them end up cramming into houseshares for what should be family homes thus creating further pressure on stock there.

What!!? I just outbid an investor on an apt, I should just give it back to the nice old miser so he can rent it out to me for extortionate rates..

:rolleyes::rolleyes::rolleyes:

Eldarion

lima wrote: »

What!!? I just outbid an investor on an apt, I should just give it back to the nice old miser so he can rent it out to me for extortionate rates..

:rolleyes::rolleyes::rolleyes:

Grand. Just don't complain to the government when you have more than 2 kids and you've "outgrown" the apartment but can't get a mortgage for that 4 bed house in SCD.

We see this complaint daily at this stage. It usually goes:-

"I have to pay huge rent on a 4 bed house for my family and the rent from the apartment I bought doesn't even cover the mortgage repayments! How am I supposed to save a 20% deposit and get out of this rental trap?? The government should do something!"

Maybe the key point here would be to not have bought that apartment :rolleyes::rolleyes::rolleyes:

jay0109

OMG....Lima has bought a gaff!!!!:eek:

Michael D Not Higgins

jay0109 wrote: »

OMG....Lima has bought a gaff!!!!:eek:

And it's an apartment! Outside of D6! :eek:

jay0109

And a repossessed Apt at that....he'll be stealing our women next!

Michael D Not Higgins

Lima, don't leave us hanging here, how much did you scoop up the apartment for?

Barely Hedged

Michael D Not Higgins wrote: »

In fairness, many people were suckered into 'getting onto the property ladder'. Now I've seen that phrase being used again in places, because people genuinely believe in it. They want to get whatever they can afford right now because renting is 'dead money' and trade up later.

That's fine, if you're just willing to get a property because you believe contributing to that is preferable to paying someone's rent.

Please don't tell me that the situation described by the poster i replied to was unfair. It was not unfair. They made a personal decision and must bare the responsibility of such.

lima

Eldarion wrote: »

Grand. Just don't complain to the government when you have more than 2 kids and you've "outgrown" the apartment but can't get a mortgage for that 4 bed house in SCD.

We see this complaint daily at this stage. It usually goes:-

"I have to pay huge rent on a 4 bed house for my family and the rent from the apartment I bought doesn't even cover the mortgage repayments! How am I supposed to save a 20% deposit and get out of this rental trap?? The government should do something!"

Maybe the key point here would be to not have bought that apartment :rolleyes::rolleyes::rolleyes:

Unlike other people, I plan to live within my means and choose to have 1 or 2 kids, leaving plenty of spare cash for a rainy day. I have no plans to ever purchase a house in "SCD" so I'm not sure what that refers to!

Michael D Not Higgins

Barely Hedged wrote: »

That's fine, if you're just willing to get a property because you believe contributing to that is preferable to paying someone's rent.

Please don't tell me that the situation described by the poster i replied to was unfair. It was not unfair. They made a personal decision and must bare the responsibility of such.

I'm not defending the position. I refused to buy in 2008 despite pressure from my family to 'get on the property ladder'. If I had I'd be burdered with a 300k mortgage for a 2 bed box apartment in negative equity.

Many other believed (and now still believe despite the bubble and burst) that prices will continue to rise forever and the only way to ever own property is to buy immediately.

El_Dangeroso

Lima, congrats on taking the plunge, I thought we'd never see the day I am also curious about what and where you bought!

Eldarion

lima wrote: »

Unlike other people, I plan to live within my means and choose to have 1 or 2 kids, leaving plenty of spare cash for a rainy day. I have no plans to ever purchase a house in "SCD" so I'm not sure what that refers to!

I do take it back, I was very much generalising.

Congrats on the purchase though!

gaius c

Eldarion wrote: »

Grand. Just don't complain to the government when you have more than 2 kids and you've "outgrown" the apartment but can't get a mortgage for that 4 bed house in SCD.

We see this complaint daily at this stage. It usually goes:-

"I have to pay huge rent on a 4 bed house for my family and the rent from the apartment I bought doesn't even cover the mortgage repayments! How am I supposed to save a 20% deposit and get out of this rental trap?? The government should do something!"

Maybe the key point here would be to not have bought that apartment :rolleyes::rolleyes::rolleyes:

Amen.

lima

Thanks, It's not a shipping container anyway :-)

The Spider

lima wrote: »

Thanks, It's not a shipping container anyway :-)

So are prices going to rise or fall in the next year Lima?

MysticalRain

lima wrote: »

The tech co I work for has at least 80% foreign workers and you can only cash out about 10-20% max of your shares after about a year, and from then on every 6 or so months. They are paid high salaries and some of them spend 1200-1300 for a 1br apt and will never buy here. In fact, many of them come from other EU countries that are worse off than us and they have mortgages in those countries already.

Personally I have no issues living in an apartment. Your commuting costs are low, your mortgage is low, running an apt is cheaper (ok apart from mgmt fees). You are closer to the city for a better quality of life etc.

I just bought a repossession apt in the city centre so I'm committed to what I just said!

Congrats. I personally prefer living in a city centre apartment as well for all those reasons (although I understand why people with kids may not).

lima

The Spider wrote: »

So are prices going to rise or fall in the next year Lima?

Have I jumped to the other side?

I think they will probably fall for the first half of the year and then pick up/stabilize.

There is a huge difference in apt prices right now, with Google Docks 2br's going for e400k whereas nearby there are 2br apts going for anywhere from e230-e280 so there might be a drop at the top and a rise at the bottom

The Spider

lima wrote: »

Have I jumped to the other side?

I think they will probably fall for the first half of the year and then pick up/stabilize.

There is a huge difference in apt prices right now, with Google Docks 2br's going for e400k whereas nearby there are 2br apts going for anywhere from e230-e280 so there might be a drop at the top and a rise at the bottom

Give it time I reckon you'll be talking about price rises in a couple of months.

Barely Hedged

Michael D Not Higgins wrote: »

I'm not defending the position. I refused to buy in 2008 despite pressure from my family to 'get on the property ladder'. If I had I'd be burdered with a 300k mortgage for a 2 bed box apartment in negative equity.

Many other believed (and now still believe despite the bubble and burst) that prices will continue to rise forever and the only way to ever own property is to buy immediately.

I dont really understand what your position is...