Central Bank to limit amount banks lend for home purchase

dearg lady

audi12 wrote: »

Dont know I know I hear them on the radio acting as if they are hereos do talking about everyone should do it makes me sick.. I have lived on nothing after going back to college with loans scraping by well worth it easy to give up for some people

tbh without numbers, it's a bit of a moot point. I'd actually be interested to know.

audi12

dearg lady wrote: »

tbh without numbers, it's a bit of a moot point. I'd actually be interested to know.

not really if one person has gone its one two many and we both know its more than one

audi12

RecordStraight wrote: »

If you want to buy a property, you need to save some money. This is known - or at least it was until the bubble.

Imagine a person earning 2500 per month after tax - not far off the average industrial wage. There's no reason why this person could not save 800-1000 per month if they are not going for expensive holidays or spending a couple of hundred euros on booze every weekend.

Hardly anyone has bought since 2007 - 8 years ago now. 8*12*800 = 76,800. This does not include any interest on savings. A couple who saved like this since 2007 will have over 150,000 plus interest in the bank.

However, most people want to spend their money on the latest phone, the Vegas trip, the new car, the boozy weekends, the expensive wedding, etc. etc., and then complain when they aren't handed the property of their dreams when they hit 30. Those clowns are in competition with with sensible couples with 150k in the bank already.

Good post

dearg lady

audi12 wrote: »

not really if one person has gone its one two many and we both know its more than one

Indeed, but it's something that has always happened. Without proof that it went up post boom time it's irrelevant to the discussion

audi12

dearg lady wrote: »

Indeed, but it's something that has always happened. Without proof that it went up post boom time it's irrelevant to the discussion

i didnt say it just because of the boom its wrong whenever it went on

dearg lady

audi12 wrote: »

i didnt say it just because of the boom its wrong whenever it went on

it was in response to the 'last generation' supposedly being greedy and retarded

Edit: getting off topic, apologies!

The_Morrigan

audie12 - stop all the gross generalisations and sweeping statements please - you are adding nothing to the debate on the new lending rules. We do not allow soapboxing in this forum.

Sala

The rules are designed to tighten lending and protect us from another bubble burst scenario. They are not supposed to make it easier for people to buy property. Everyone complaining is giving their own scenario- they can't make exceptions for everyone, and sadly for them, there will be people who just can't afford to buy.

I personally am delighted with the new rules. The 3.5 times income is the best- the more they lend the higher prices go. I can see how people got pressurised into accepting 4, 5, 6 times income or more in the bubble. I would like to say I wouldn't succumb to that pressure trying to get on the "ladder" but I can see how it happens so I'm glad they took that choice away from me. In theory now they will lend me X and I will need Y for a deposit. If I can't afford to buy with that, I either save for longer, increase my income, or both. I do not have the choice of saying just lend me another 100k coz I really want that house! That's a good thing.

Akrasia

handlemaster wrote: »

I think prices will move up from the 150 mark to the bench marking of 220. Alot of people are not taking into account the expectations of sellers will have. It doesnt have to be an exact science setting the house price ,the sentiment can be enought to push the lower priced housing up as it is only 10% deposit

you're forgetting the 3.5 times income rule, if your household income is 50k you'll only be allowed to borrow 175k so you're not likely to be able to afford a house for more than 200k and there are a lot of family incomes lower than 50k who are in the first time buyers market

jester77

PRAF wrote: »

All well and good recommending that people simply save more and for longer. However, what if they are now 35 and the bank wont give them a 30 year mortgage in 5 years time. They'll be told they can't afford the repayments over a 25 year term. Also, what if prices increase by 10-15% over that period.

These moves, while I am broadly in favour, have some unintended consequences and are particularly harsh on trader uppers in Dublin in their 30s.

Someone who is 35 has already been working for at least 10-15 years, so they should have a sizeable deposit built up. They won't need such a big mortgage.

ElizKenny

I think we are headed back to pre bubble times.
The times when people actually realized that not everybody can afford to own their own home.
Back in the day people were aware of this, but during the boom times anybody who wanted could have a loan for whatever house they wanted.

hurlsey

Personally as a FTB I'm happy with the new rules incl the 3.5x salary


When it was looking like 20% I planned accordingly, and I think more prudent buyers will try and come up with more than the 10% *in so far as possible

These new rules give me an excellent chance to have my own home and deal with a lot of issues I.e unsustainable credit, BTL properties and also estate agents!!

I think the last 2 especially needed attention there are plenty of people who invested in BTL properties who simply shouldn't have(it was the culture at the time) most of the mortgages in arrears are BTL properties! Also estate agents pushing up house prices is a particular problem which has been dealt with as people now have a limit the shortfall must be dealt with by a deposit!!

On another note I believe the government need to look at the rental market as a social issue and need to look to Europe in terms of rent control and lifetime leasing!! (Personally if I knew right now I could lease a property till I died at an affordable rate I wouldn't look to buy, but I certainly am not going to be paying 1200-1500/month on a property I could mortgage for half of that!!

We have too much invested in property in this country and as a culture I think we need to change that!!

Supply is also another issue that need to be seriously addresses, however I wonder how many developers will look to build new housing estates when they cannot charge 3-400,000 for 4 walls and a roof that was never worth that in the first place!!

MayBea

RecordStraight wrote: »

If you want to buy a property, you need to save some money. This is known - or at least it was until the bubble.

Imagine a person earning 2500 per month after tax - not far off the average industrial wage. There's no reason why this person could not save 800-1000 per month if they are not going for expensive holidays or spending a couple of hundred euros on booze every weekend.

Hardly anyone has bought since 2007 - 8 years ago now. 8*12*800 = 76,800. This does not include any interest on savings. A couple who saved like this since 2007 will have over 150,000 plus interest in the bank.

However, most people want to spend their money on the latest phone, the Vegas trip, the new car, the boozy weekends, the expensive wedding, etc. etc., and then complain when they aren't handed the property of their dreams when they hit 30. Those clowns are in competition with with sensible couples with 150k in the bank already.

The force majeure factors should be taken into account - this was a peak of the recession and people were getting laid off work, but I would agree with the figures in general - it is achievable.
But, it doesn't explain the all-cash phenomenon, with every second buyer having enough cash in full to buy a property.
The same is happening in the US now "Nearly half of all home purchases in the month of September were paid for in cold hard cash across the U.S" (Forbes)

audi12

The_Morrigan wrote: »

audie12 - stop all the gross generalisations and sweeping statements please - you are adding nothing to the debate on the new lending rules. We do not allow soapboxing in this forum.

I said some people im giving my view backed up with some facts that everyone knows ..

Will house prices fall now is what i want to know any views

RecordStraight

MayBea wrote: »

The force majeure factors should be taken into account - this was a peak of the recession and people were getting laid off work, but I would agree with the figures in general - it is achievable.
But, it doesn't explain the all-cash phenomenon, with every second buyer having enough cash in full to buy a property.
The same is happening in the US now "Nearly half of all home purchases in the month of September were paid for in cold hard cash across the U.S" (Forbes)

It's interesting alright. A lot of public sector workers (and other workers, of course) would have taken generous severance packages when they were let go. Older people might have gotten very large lump sums. And of course while much of the windfall profits of the bubble (e.g. people who sold land, people who had property inheritances, etc.) were blown on bank shares and BTLs, some people undoubtedly sat on the cash until recent times. And other people will, as I have said, have been saving for perhaps a decade or more - my partner and I have over 300k in cash, having started saving in the early 2000s.

Whether that adds up to the approx. 50%, I don't know - but it's 50% of a fairly small number compared to more 'normal' market conditions.

hurlsey

audi12 wrote: »

I said some people im giving my view backed up with some facts that everyone knows ..

Will house prices fall now is what i want to know any views

IMHO no they won't, we still have a serious supply issue, that and anyone who has there house on the market now looking at the 20% deposit rule who cannot sell their house and have enough equity to support their new purchase will in my view pull their house from the market.... Which leads us to less supply!!

It will most likely push rental properties up further!!

The CB has dealt with the unsustainable credit issue, pity the horse has bolted, but it's the government which now need to deal with the tea talk market!!

There is also the matter of banks holding on to repossessed properties until house prices reach a level where they can balance their books, never mind the billions pumped in by us, the taxpayer, but as long as they can break even or profit from it that's the main thing!!

*and yes I do realise from a business point of view this makes sense however it ignores the elephant in the room that they themselves, along with various other groups caused the problem in the first place!

audi12

hurlsey wrote: »

IMHO no they won't, we still have a serious supply issue, that and anyone who has there house on the market now looking at the 20% deposit rule who cannot sell their house and have enough equity to support their new purchase will in my view pull their house from the market.... Which leads us to less supply!!

It will most likely push rental properties up further!!

The CB has dealt with the unsustainable credit issue, pity the horse has bolted, but it's the government which now need to deal with the tea talk market!!

There is also the matter of banks holding on to repossessed properties until house prices reach a level where they can balance their books, never mind the billions pumped in by us, the taxpayer, but as long as they can break even or profit from it that's the main thing!!

*and yes I do realise from a business point of view this makes sense however it ignores the elephant in the room that they themselves, along with various other groups caused the problem in the first place!

Surely less buyers now then before for a while at least

walshyn93

hurlsey wrote: »

IMHO no they won't, we still have a serious supply issue, that and anyone who has there house on the market now looking at the 20% deposit rule who cannot sell their house and have enough equity to support their new purchase will in my view pull their house from the market.... Which leads us to less supply!!

It will most likely push rental properties up further!!

The CB has dealt with the unsustainable credit issue, pity the horse has bolted, but it's the government which now need to deal with the tea talk market!!

There is also the matter of banks holding on to repossessed properties until house prices reach a level where they can balance their books, never mind the billions pumped in by us, the taxpayer, but as long as they can break even or profit from it that's the main thing!!

*and yes I do realise from a business point of view this makes sense however it ignores the elephant in the room that they themselves, along with various other groups caused the problem in the first place!

It will push rental properties up until more come on the market. In fact I think Dublin is reaching its peak rental price. People simply won't pay more, they'll move elsewhere even if that means out of the country. High earners are paying 55+% tax and paying over 30% of the discretionary on accommodation not to mention all the other costs of living in Ireland. They'd be better off moving elsewhere and earning less and that is what they'll begin to do. You're thinking in the immediate short term. In the long term, deposit limits will bring house prices way down towards cost price.

audi12

walshyn93 wrote: »

It will push rental properties up until more come on the market. You're thinking in the immediate short term. In the long term, deposit limits will bring house prices way down towards cost price.

lets hope so might make sure there is value for us investors

MayBea

RecordStraight wrote: »

It's interesting alright. A lot of public sector workers (and other workers, of course) would have taken generous severance packages when they were let go. Older people might have gotten very large lump sums. And of course while much of the windfall profits of the bubble (e.g. people who sold land, people who had property inheritances, etc.) were blown on bank shares and BTLs, some people undoubtedly sat on the cash until recent times. And other people will, as I have said, have been saving for perhaps a decade or more - my partner and I have over 300k in cash, having started saving in the early 2000s.

Whether that adds up to the approx. 50%, I don't know - but it's 50% of a fairly small number compared to more 'normal' market conditions.

THis is impressive, RecordStraight! Hats off Thanks, you laid out the reasons nicely.
May I ask what was the reasons for not buying a property in 2011/2012?

RecordStraight

MayBea wrote: »

THis is impressive, RecordStraight! Hats off Thanks, you laid out the reasons nicely.
May I ask what was the reasons for not buying a property in 2011/2012?

Emigration.

Not sure if we would have bought even if in the country though - so much uncertainty.

johnp001

dearg lady wrote: »

I think (although stand to be corrected!) that most people ARE paying their mortgages, I'm not sure what mortgages taxpayers are paying?

For PDH

Central Bank wrote:

A total of 117,889 accounts were in arrears at end-Q3 2014

For BTL

Central Bank wrote:

Some 38,463 of these accounts were in arrears at the end of June 2014

Borrower doesn't pay the bank. Taxpayer bails out the bank.
Ergo taxpayer is paying these 150,000 odd mortgages.

mrmitty

matt-dublin wrote: »

all i can say is that I'm devastated....

I want to address this post because it seems that a lot of folks posting on this topic seem "devastated" and I can assure you that in the grand scheme of happenings in life that this will not be a remarkable event.

People will survive and thrive and yes, it may take some a few years longer to start home ownership but that's all.
The term "Devastation" should be saved for events like the loss of a child, divorce, cancer or events like that that we all will face in life.

RoboRat

Jeremyr wrote: »

Well no offense but the excuse that grown adults who blame the banks for their own reckless borrowing is obsurd to say the least

No one put them at gunpoint and marched them into the nearest bank and made them take out 110% mortgages for crazy priced houses


People still need to think for themselves and do the math eg i earn 3k per month my mortgage is 1.5k per month for the next 30 years , what happens if i lose my job etc


Temptations and offerings are everywhere around you ,you still have to think for yourself at the end of the day especially if you an Adult taking out a 20+year loan


My generation did not cause this mess so i for one feel no sympathy for people in NE afterall it was them who put us in this position in the first place and screwed the whole country up

Well I am sure you are delighted with your smug grin, must be nice to never made a mistake. At least fcuking criminals serve their time and get a second chance. People like you piss me off. You would probably be in the same boat bar for the fact that you were born a few years later. I done the math and if you bothered your hole to read my comments you would see that I bought within my means and even after a 35 percent paycut, still never missed a payment.

I do wonder about people like yourself, would you have the balls to say you have yourself to blame to my face? Seriously doubt it in the same way you wouldn't tell someone suffering from lung cancer who smoked that its their own fault.

People like you piss me off no end, and there are far too many smug 'told you so' people on this thread.

audi12

mrmitty wrote: »

I want to address this post because it seems that a lot of folks posting on this topic seem "devastated" and I can assure you that in the grand scheme of happenings in life that this will not be a remarkable event.

People will survive and thrive and yes, it may take some a few years longer to start home ownership but that's all.
The term "Devastation" should be saved for events like the loss of a child, divorce, cancer or events like that that we all will face in life.

Agreed who said they were devasted stupid thing to say

dr.fuzzenstein

Kangoo Man wrote: »

2007 average asking price for houses was €378,000 with 100% mortgages available.
2015 average asking price for houses is €193,000 with 80% mortgages available.

Talk about closing the stable door when the horse has bolted!

We just LOVE sitting idly by while everything is going down the swanny and once it's all over and way to late, we then introduce draconian legislation that solves nothing. Then stand around, slap each other on the back, saying what a grand job that was. We do self-delusion and self-satisfaction sooo well in this country.
All in all, this could be worse, but as I keep saying (I notice you get no thanks for the truth), 90% mortgages and borrowing 4-5 times salary was not the problem.
Maybe Bausparverträge will come in in this country, where you save with your bank specifically for a house. of course in Germany those are encouraged and supported by the state.
We don't do encourage or support, if that was the case, the state would invent a special levy to screw the people saving for houses even more, beside the absolutely outrageous theft that is DIRT tax.

audi12

RoboRat wrote: »

Well I am sure you are delighted with your smug grin, must be nice to never made a mistake. At least fcuking criminals serve their time and get a second chance. People like you piss me off. You would probably be in the same boat bar for the fact that you were born a few years later. I done the math and if you bothered your hole to read my comments you would see that I bought within my means and even after a 35 percent paycut, still never missed a payment.

I do wonder about people like yourself, would you have the balls to say you have yourself to blame to my face? Seriously doubt it in the same way you wouldn't tell someone suffering from lung cancer who smoked that its their own fault.

People like you piss me off no end, and there are far too many smug 'told you so' people on this thread.

Or maybe he just made a wise decision not to buy just because the banks offers you money doesnt seem you should take it .A word called value comes to mind

RecordStraight

Kangoo Man wrote: »

2007 average asking price for houses was €378,000 with 100% mortgages available.
2015 average asking price for houses is €193,000 with 80% mortgages available.

Talk about closing the stable door when the horse has bolted!

Funny thing is, if you look at how much interest is payable now (no trackers available) and consider the increases in taxes and fees for services, there's actually not much difference between how affordable houses were then and now.

The_Morrigan

RoboRat wrote: »

Well I am sure you are delighted with your smug grin, must be nice to never made a mistake. At least fcuking criminals serve their time and get a second chance. People like you piss me off. You would probably be in the same boat bar for the fact that you were born a few years later. I done the math and if you bothered your hole to read my comments you would see that I bought within my means and even after a 35 percent paycut, still never missed a payment.

I do wonder about people like yourself, would you have the balls to say you have yourself to blame to my face? Seriously doubt it in the same way you wouldn't tell someone suffering from lung cancer who smoked that its their own fault.

People like you piss me off no end, and there are far too many smug 'told you so' people on this thread.

If you use that tone towards another member of this forum, you will be lose your posting rights. This is the only warning you will get.

MayBea

RecordStraight wrote: »

Emigration.

Not sure if we would have bought even if in the country though - so much uncertainty.

I see, the housing stock was absolutely appalling in these years also. Good luck with your search:)