Property Market 2015

gaius c

Bob24 wrote: »

I got my first AIP recently. There are a few conditions and a short list of documents that will be needed to actually get the mortgage. Are you saying that even if all the conditions listed on the AIP are fulfilled, it would be common for bank to decline a full mortgage approval at a later stage.

Not worried about my own situation as I fit the new rules anyway, but if AIPs are as worthless as you are mentioning - what purpose do they serve?

They allow the bank to claim they are open for business and approving loads of mortgages while kicking the much lower drawdowns figure under the table where nobody can see it.

farrerg

Bob24 wrote: »

if AIPs are as worthless as you are mentioning - what purpose do they serve?

They're really just meant to give a ball park idea of what you can get and what other information you might need to provide, for example if you are non PAYE

Basically it stops you looking at houses for 500k if all you can afford is 400k, and from looking at all if there's no chance of you getting a mortgage

johnp001

gaius c wrote: »

They allow the bank to claim they are open for business and approving loads of mortgages while kicking the much lower drawdowns figure under the table where nobody can see it.

And also, none of the banks will want to be the bank that proved that they really needed the regulation in order not to bankrupt themselves again.
i.e. gave out the biggest loans they could up until the new rules were implemented, then continued to give out as much money as possible using pre-existing AIPs to circumvent the rules.

Banks also don't want to lend money into a falling market. If prices swing back by the same amount this year as they rose last year even with 20% deposits their mortgage assets wont allow repossession without a loss to the bank.

I think drawing down a mortgage on >3.5x income or <20% deposit is going to be difficult in the future.

MayBea

farrerg wrote: »

Some of the ads are saying 10 month approvals but this includes something like 4 months at loan offer stage i.e. deposit paid, valuation completed etc. So really, the AIP element is just the standard 6 months that the rest of the banks are doing.

I heard the same thing, the phrase '10 month approval' is misleading.

yankinlk

The_Conductor wrote: »

Big time...... Think of Atlantic city, Detroit- and other failed experiments. Some states in the US are in big trouble- think of New Jersey- and some of their experiments like Camden.......

Have you ever been to those shítholes? A.C.?? Thats not a city, its not even a shítty. The best thing about NJ is its proximity to NYC. What those places have in common with Dublin...cmon i mean seriously. Put me on the prices go up bandwagon for this year.

Glenbhoy

farrerg wrote: »

They're really just meant to give a ball park idea of what you can get and what other information you might need to provide, for example if you are non PAYE

Basically it stops you looking at houses for 500k if all you can afford is 400k, and from looking at all if there's no chance of you getting a mortgage

It depends on the institution, the regulations clearly state that AIP's which have been subject to credit verification are exempt, banks do want to lend money, they may well see these pre-existing AIP's as a good opportunity to lend as much as they can before demand falters somewhat.
In OP's case, it sounds like an actual AIP and not the type of worthless rubbish which as you rightly say can be churned out in 10 mins in branch.

That's not to say that the bank won't baulk when it comes to drawdown, but remember, they do want to lend, especially since new loans are at a nice margin unlike those pesky trackers!!

farrerg

Glenbhoy wrote: »

It depends on the institution, the regulations clearly state that AIP's which have been subject to credit verification are exempt, banks do want to lend money, they may well see these pre-existing AIP's as a good opportunity to lend as much as they can before demand falters somewhat.
In OP's case, it sounds like an actual AIP and not the type of worthless rubbish which as you rightly say can be churned out in 10 mins in branch.

That's not to say that the bank won't baulk when it comes to drawdown, but remember, they do want to lend, especially since new loans are at a nice margin unlike those pesky trackers!!

Definitely, they do want to lend and I'd say the underwriters were kept busy in the last few weeks as they tried to get everything officially approved, but some people whose applications from last year were never properly reviewed might be dissappointed when they go back

Same as people have reported above, there was a small development we looked at, all 6 of the 3 bed semi's and terraced went sale agreed on the first week of viewing, since then 3 have gone back up for sale, at least one of these was an issue getting formal offer rather than just a change of mind

Barely Hedged

gaius c wrote: »

They require less investment than the shell with steel boarded windows you posted earlier and you estimated that one as needing €200-250k so you're saying that these houses which are actually somewhat habitable need the same amount of money spent on them?

Actually we're using your figures here. We both agreed that the NCR house is effectively a site with added demolition costs and you proposed that it would take up to €250k to make it liveable bringing the cost of the property up to €700k. And that's not far off the houses linked, which actually do already have access to the amenities of Ranelagh.

As somebody who has had a surveyor and two builders around to quote on the renovation of two pre-63 properties, you dont know what youre talking about.

The person(s) buying houses in Ranelagh are not going to buy and leave them as is. The money to be spent to bring these properties up to the standard that is expected in Ranelagh is in the 200k - 250k range. To do this they need to be completely gutted back to a shell and this is pretty much the same state that NCR is in - a shell.

Nope, your maths is awful. The only comparable house in size in Ranelagh is 925k. This needs 200k - 250k spent on it, regardless if it is habitable or not. No matter what way you spin it or overlook the odd 400k/500k your point doesnt stand.

gaius c wrote: »

Still quite some way off the €2 million you claimed though, isn't it?

Ill admit, a bit. Answer me this though. If the 925k property is bought for asking and there is 250k spent on it. How much do you think it would be worth then? Id say in the 1.4mio - 1.5mio area. Deducing from your point above considering youre playing fast and loose with the odd 400k/500k, id say i wasnt far off.

gaius c wrote: »

You think a near doubling of mortgage repayments is decent and affordable?

Taken completely out of context as it was meant as a relative comparison to the size of the initial repayments when the poster was saying there was no affordability below 350k in Dublin. Its the same as saying a mortgage repayment of €100 per month, doubling to €200 per month is unaffordable. Youre stretching to find points now

Barely Hedged

The_Conductor wrote: »

Big time...... Think of Atlantic city, Detroit- and other failed experiments. Some states in the US are in big trouble- think of New Jersey- and some of their experiments like Camden.......

Ive never heard of Camden? Whats its story?

The @rse fell out of the Detroit economy. I dont understand how its a failed experiment in gentrification? Its an example of a failed economy if nothing?

seamus

Seeing a couple of properties back on the market in the last couple of days which went sale agreed in the last two months. One of them looking like a seller in a panic too (probably gone sale agreed elsewhere).

Wonder if this is the beginning of it...

I'm bidding on a house. House has been up three times. First time was a couple of years ago - no bidders. Second time was last year - bidding war frenzy, went sale agreed way above asking. 'Winning' bidder could come up with the dough; underbidders weren't interested when it came back to market.

Three bidders now but it's stalled at 55k less than it went sale agreed for in autumn. It may go further if we bid again but, reading the tea leaves, I think we'll just sit it out. House is nice but I feel like we'll get more for our money in three months.

The Spider

Ah one for all those who extol the benefits of living in Dublin.....and the reality!

(Warning humour alert, probably the wrong forum, I'll await the slap on the wrist)

http://www.dailyedge.ie/expectations-versus-reality-of-moving-up-to-dublin-1003636-Aug2013/

Kinet1c

seamus wrote: »

Seeing a couple of properties back on the market in the last couple of days which went sale agreed in the last two months. One of them looking like a seller in a panic too (probably gone sale agreed elsewhere).

Wonder if this is the beginning of it...

Seeing properties on our watch list go sale agreed, only to be re-listed on an alternative site. While we're not buying now but keeping an eye on our saved searches is showing that things in our desired area and price range are not selling as quickly or at all.

helimachoptor

the bid we made 25% or so below the asking..

The EA came back this morning to say there is a bid 10% below the asking, we wont be upping ours.. interesting to see if its legit.

gaius c

helimachoptor wrote: »

the bid we made 25% or so below the asking..

The EA came back this morning to say there is a bid 10% below the asking, we wont be upping ours.. interesting to see if its legit.

Good luck.

It may well be legit. Lowball bids tend to attract other interest.

helimachoptor

Wife went to see a house today, executor sale.

Estate agents words for the vendor "greedy. Confirmation from him he's seeing a 2 tier market.

Walk in condition which is selling at asking or up to 10% below
Re-furbs which are generally executor sales where they are expecting to get asking price + 10% due to media and i quote "the rag that is the indo".

Chap basically said the media is setting a lot of unrealistic expectations, re-furbs and the market in general are expecting a drop off towards mid-year when peoples approval runs out with less than 20%

The_Conductor

Talk about biting the hand that feeds you........

helimachoptor

The_Conductor wrote: »

Talk about biting the hand that feeds you........

house has been up for 7 months, offers from 20% - 10% below asking, refused immediately he said.
Expectation from vendor that they'll sell for above asking

The_Conductor

helimachoptor wrote: »

house has been up for 7 months, offers from 20% - 10% below asking, refused immediately he said.
Expectation from vendor that they'll sell for above asking

Ah- gottcha.

So- the estate agent has had it on his hands for 7 months- and has put more time and effort into the property than he should have had to do to sell it- but the vendor is proving intractable, and refusing what are reasonable offers, on totally spurious grounds- because of wholly unrealistic expectations of what they might get for the property.........

If there are another couple of months of price drops (as there was last month) then the tide can go out very quickly.

Even the Indo would get on board with a new narrative. They'd be busy blaming the Central Bank, of course, but 'Property Crash II' would seep into the public mind sharpish - probably out of proportion with reality but then it becomes self-fulfilling as confidence tumbles.

Obviously if prices hold up then 'spring selling season' could take off.

The_Conductor

The_Conductor wrote: »

Ah- gottcha.

So- the estate agent has had it on his hands for 7 months- and has put more time and effort into the property than he should have had to do to sell it- but the vendor is proving intractable, and refusing what are reasonable offers, on totally spurious grounds- because of wholly unrealistic expectations of what they might get for the property.........

Had an agent say something similar to me recently. They were actually showing us two houses at similar price levels. But one of them needed work and they openly said they had urged the seller to drop their price and/or be open to reasonable offers. The other one was in good nick and worth the money, they reckoned.

Maybe they were just trying to sell me the turnkey house for top price and were spinning the opposite yarn to the next sucker(!) but it felt genuine and I appreciated their honesty (presuming that's what it was).

Barely Hedged

Deleted User wrote: »

If there are another couple of months of price drops (as there was last month) then the tide can go out very quickly.

Even the Indo would get on board with a new narrative. They'd be busy blaming the Central Bank, of course, but 'Property Crash II' would seep into the public mind sharpish - probably out of proportion with reality but then it becomes self-fulfilling as confidence tumbles.

Obviously if prices hold up then 'spring selling season' could take off.

The only thing thats happening here is over ambitious asking prices being reigned in. Who can blame people when theyre making what is arguably the largest financial transaction of their lives trying to get more than what they saw the Jones's get for their house.

Houses priced with non ambitious asking prices will sell and continue to sell for the next few years. There is a comfortable certainty around the variables that affect peoples ability to buy a house and thats not going away any time soon.

In summary - if youre looking and find somewhere go for it. Dont be holding out for a crash

Barely Hedged

Barely Hedged wrote: »

In summary - if youre looking and find somewhere go for it. Dont be holding out for a crash

I agree with that. Have been house-hunting for a fair while and average prices are only interesting for academics. Even if I expected a dip later in the year, if a specific house that fits the bill and is affordable comes to market, I would buy tomorrow.

That said, there is not currently the sense of panic people had in 2005 - and spring 2014 - i.e. if I don't stretch myself by borrowing the absolute max possible then prices will just spiral faster than we can save.

handlemaster

interesting to see what that selling figures will say coming into the summer.

Barely Hedged

handlemaster wrote: »

interesting to see what that selling figures will say coming into the summer.

There's nothing interesting about it. The disproportionate asking prices are just that - disproportionate. They'll be realigned once the reality of the situation passes that nobody will pay them for their asking price. However, houses will still sell at reasonable asking prices. There will be no crash. If you find something good, buy it otherwise you're just being foolish

gmisk

I am definitely noticing a change the last few weeks or so.
Less people at viewings, plus I have had 3 phone calls the last week or so from EAs following up or enquiring if I was still looking etc.....this hasn't happened for a long time!

Bob24

gmisk wrote: »

I am definitely noticing a change the last few weeks or so.
Less people at viewings, plus I have had 3 phone calls the last week or so from EAs following up or enquiring if I was still looking etc.....this hasn't happened for a long time!

I have slowed down on viewings myself so can't talk on that front - but I can echo what you are saying about the follow-up calls, same experience on my side.

handlemaster

gmisk wrote: »

I am definitely noticing a change the last few weeks or so.
Less people at viewings, plus I have had 3 phone calls the last week or so from EAs following up or enquiring if I was still looking etc.....this hasn't happened for a long time!

must be a fat finger ! estate agents never call back

seamus

There is some sense of panic in the market with some buyers though.

We went in just over asking on a property. A little more than we thought it was worth, but we told the EA it was being offered on the basis that we wanted to lock it down rather than drag on the bidding for weeks and we'd close on it within weeks (we knew the vendor is eager to close). It was beating out the next bidder by €10k.

Within an hour the other bidder had come back and thrown another €10k on it, the EA said they too were looking to close quickly.

The property now being priced well above what it's worth, we left them to it

In this case we don't suspect any dodginess on the part of the EA, probably a buyer with approval about to run out.

gaius c

seamus wrote: »

There is some sense of panic in the market with some buyers though.

We went in just over asking on a property. A little more than we thought it was worth, but we told the EA it was being offered on the basis that we wanted to lock it down rather than drag on the bidding for weeks and we'd close on it within weeks (we knew the vendor is eager to close). It was beating out the next bidder by €10k.

Within an hour the other bidder had come back and thrown another €10k on it, the EA said they too were looking to close quickly.

The property now being priced well above what it's worth, we left them to it

In this case we don't suspect any dodginess on the part of the EA, probably a buyer with approval about to run out.

Houses priced well are getting plenty of interest. The ones that are not priced so well linger for ages and get noticeably lower numbers at viewings and bidding is much slower.

Mortgage approval is only half the story. If the end of CGTE has affected cash buyers, that will have a much bigger effect on the market.

handlemaster wrote: »

must be a fat finger ! estate agents never call back

They do now!
My wife got 5 phonecalls over the space of a fortnight about a house we viewed but thought was over-priced for what it was.
And then I got two phonecalls asking me if I wanted to counter when they got a bid at the asking.