Property Market 2015

Barely Hedged

gosplan wrote: »

Is it that the new rules more or less don't change anything?

Exactly. In 2010-2013 and early 2014, if you asked for a mortgage the banks would approve you for less than what you asked effectively making it a 85% or 80% LTV mortgage. It was then publicised by the banks that they were open for lending, that they'd approved x amount of new mortgages where in reality they were restricting heavily the size of the LTVs to spread their limited mortgage pots around and massage mortgage stats for the CB

Barely Hedged

seamus wrote: »

Please tell me these banks who consider liquid assets to be an "equity safeguard" so I can remember not to keep any savings with them.

It counts towards your credit worthiness. Surplus cash looks good

gaius c

Barely Hedged wrote: »

Not everybody spunks their entire cash savings on a property.

Cash isn't equity and still doesn't provide a "significant equity safe guard" to the bank handing out a loan at a higher LTV. Your point is muddled. Can you clarify it please?

gosplan

Barely Hedged wrote: »

Exactly. In 2010-2013 and early 2014, if you asked for a mortgage the banks would approve you for less than what you asked effectively making it a 85% or 80% LTV mortgage. It was then publicised by the banks that they were open for lending, that they'd approved x amount of new mortgages where in reality they were restricting heavily the size of the LTVs to spread their limited mortgage pots around and massage mortgage stats for the CB

OK.

seamus

Barely Hedged wrote: »

It counts towards your credit worthiness. Surplus cash looks good

No question, but you know full well that wasn't what I was asking

Barely Hedged

seamus wrote: »

No question, but you know full well that wasn't what I was asking

That's what I meant with my initial point so I'm not sure what you're getting at?

Villa05

Barely Hedged wrote:

Exactly. In 2010-2013 and early 2014, if you asked for a mortgage the banks would approve you for less than what you asked effectively making it a 85% or 80% LTV mortgage.

Have you evidence to back this up regarding LTV?

athtrasna

Guys if you want to debate a point yourselves please take it to PM. There's too much back and forth going on in here today.

Thanks

Mod

Barely Hedged

Villa05 wrote: »

Have you evidence to back this up regarding LTV?

For what I've described, you know full well I can't produce evidence for it. It was the reality of the situation back then given my experience talking and applying to mortgage assessors in UB, BOI and AIB and brokers.

You can either believe what I say or buy into this cobblers and delusionment people have that there will be a drop off in house prices due to the CB. It's all about the economy. Let's stop the delusion already. The CB will have a limiting effect, not cause a drop

FortySeven

seamus wrote: »

Please tell me these banks who consider liquid assets to be an "equity safeguard" so I can remember not to keep any savings with them.

Not sure about 'equity safeguard' but my bank were concerned that we were contributing all our savings towards our deposit and were wary even with over 20% deposit. (House needing modernising). We were not all in but it was all they could 'see'. They changed their tune significantly when I showed them invoices for gold purchases over the years. Didn't need proof that it was in a vault in Switzerland. They took it on the invoices. It's about as liquid as it gets and held offshore but it certainly moved the process along quite sharpish.

L'Enfer du Nord

Indo must have been caught telling porkies on this very subject on their front page, they must have had to change it:








Picked this rag up in a cafe with original headline, looking at their own stats even in my ageing head I could calculate that the headline was incompatible with there own stats which show that for county Dublin as a whole new builds are up slightly. Its worse than Pravda. Their main aim in life seems to be to get the central bank to row back on its lending rules. Why? Popular sentiment with its reads? Maybe. Vested interest amongst staff in rising property prices? More likely.

athtrasna

Papers often have different front pages for different editions with later editions having more depth on stories that were breaking when the national edition went to press. Not sure there's more to it than that?

Archaeoliz

Barely Hedged wrote: »

It's none more complicated than that.

Like any market, it experiences dips and surges. People just get emotionally charged about it because they could be transacting in the middle of a surge and can't do anything about it. They're right to be emotional about it - for the majority of people it's the largest financial transaction in their lives.

However, what you describe is nothing more than a utopia when looking at the property market over a period of time. Do you honestly believe what you're saying can be realised?

I referred and quoted a previous post, hence the 'more complicated after the quote'. Are you disagreeing with me or with alastair's post?

I was describing what I considered would be sustainable as I said "...the level of growth sustainable would IMHO need to be closer to 1 or 2% increases YOY".

So, yes I do believe that a sustainable market increase ought to be closer to 1 or 2% rather than 10-20%. Not saying that's going to happen. Utopian economics - now wouldn't that be nice.

The_Conductor

L'Enfer du Nord wrote: »

Picked this rag up in a cafe with original headline, looking at their own stats even in my ageing head I could calculate that the headline was incompatible with there own stats which show that for county Dublin as a whole new builds are up slightly. Its worse than Pravda. Their main aim in life seems to be to get the central bank to row back on its lending rules. Why? Popular sentiment with its reads? Maybe. Vested interest amongst staff in rising property prices? More likely.

They've banned me from commenting on the Indo's website- after I kept pointing out the serious flaws in their stats. I went into quite a bit of detail- the articles got nuked- and I got banned. Doesn't seem fair- but hey- why am I wasting my time giving their journalists lessons in elementary statistics.

Archaeoliz

gosplan wrote: »

1: Gain and lose 10 people. This is assuming there's an even spread of wages across the range as they wouldn't be grouped around a mean or something like that.

2: It's filtering through. If you focus close enough in on a curve you see a straight line.

3: OK, but there's a lot more at play than just equity, LTV, stock etc.

If you're going to model it I would disagree with the gain 10 and lose 10 method because price brackets for volume of buyers are more of a pyramid.

To go back to the original example:

Barely Hedged wrote: »

10 people can afford 350k houses before the regulations, 10 can afford 400k houses and 10 can afford 450k houses. Each group's affordability is reduced by 50k post regulations. What happens demand in the 300k, 350k and 400k brackets post regulations?

It would be more realistic in my mind with an example of 10 - €350k, 9 - €400k, 8 - €450k. Then it's more obvious to me of what happens to demand in those price brackets when €50k is wiped from their budget.

jmayo

Barely Hedged wrote: »

Where does the delusion of price drops end with people. As I said a few posts ago it was cash buyers, then CGT and now the CB even though most people needed to have a 15% to 20% deposit for the past 4/5 years to get a mortgage.

Ever clinging to the next outlier that might cause a price drop instead of using logic

Well maybe if the elephant in the room i.e. all those mortgages in default even if only the BTL ones, were dealt with then we might have some price drops.
Of course if you ignore that huge percentage then I suppose you could say we have a semi functional property market.

The_Conductor wrote: »

They've banned me from commenting on the Indo's website- after I kept pointing out the serious flaws in their stats. I went into quite a bit of detail- the articles got nuked- and I got banned. Doesn't seem fair- but hey- why am I wasting my time giving their journalists lessons in elementary statistics.

Of all the mods I would like to see banned you are at the bottom of the list I will admit.:D
Maybe some of the mods on this site moonlight for the indo.

OfflerCrocGod

gaius c wrote: »

PPR is showing a massive spike for July so far. The July average for Dublin is €45k higher than the June average. Lots more data to be added yet but it will take some serious movement to bring that average to lower than June's figure.

What I'm watching though are the transaction volumes. Early days but it does look like things are starting to slow up.

Very interesting. It might be that it's the last cohort of buyers with approvals from before the CB rules came into force? That's a hefty increase, over 10%? Well outside any +/-5% I was expecting. I don't see how that's sustainable. Where is the money coming from to keep the market so strong for the rest of the year?

castle2012

OfflerCrocGod wrote: »

Very interesting. It might be that it's the last cohort of buyers with approvals from before the CB rules came into force? That's a hefty increase, over 10%? Well outside any +/-5% I was expecting. I don't see how that's sustainable. Where is the money coming from to keep the market so strong for the rest of the year?

I'm noticing big rises in my area on daft.ie . I live in the north east (Meath)

gaius c

OfflerCrocGod wrote: »

Very interesting. It might be that it's the last cohort of buyers with approvals from before the CB rules came into force? That's a hefty increase, over 10%? Well outside any +/-5% I was expecting. I don't see how that's sustainable. Where is the money coming from to keep the market so strong for the rest of the year?

Hefty caveat is that July data is far from complete and it will be the end of august before we have a more reliable picture.

handlemaster

http://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/residential-sales-in-republic-up-one-third-on-last-year-1.2307735

Irish times take on the figures for the first half of the year

L'Enfer du Nord

athtrasna wrote: »

Papers often have different front pages for different editions with later editions having more depth on stories that were breaking when the national edition went to press. Not sure there's more to it than that?

In this case it's different headlines for the same story. As I said the original head line was false. This has nothing to do with breaking news.

johnp001

Irish Times
Home repossessions accelerate to 60 each week

gaius c

handlemaster wrote: »

http://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/residential-sales-in-republic-up-one-third-on-last-year-1.2307735

Irish times take on the figures for the first half of the year

Interesting that they've spotted the slowdown. Papers are usually last to the party in terms of figuring out what is going on. Expect lots of "CB rules are bad" editorials as the slowdown digs in.

alastair

gaius c wrote: »

Interesting that they've spotted the slowdown. Papers are usually last to the party in terms of figuring out what is going on. Expect lots of "CB rules are bad" editorials as the slowdown digs in.

The IT spotted the slowdown the same time as everyone else -

http://www.irishtimes.com/business/economy/property-market-slows-but-not-for-long-1.2299026

Property market slows but not for long

Agents are reporting a definite cooling in the Dublin market, with property prices falling for two months in a row

...

As for the mortgage-lending restrictions, they seem to be having an impact, but how long can any slowdown actually last?

Data is showing that Dublin’s population has picked up strongly with people flocking to the capital for jobs.

With housebuilding currently at a standstill in the capital, and more and more people arriving into the city, there will still be upward pressure on prices in the long run.

gosplan

Interesting that the last two days have seen both IT and Indo talk about te slowing property market.

I would have expected a few more months of '10% YOY growth' stories.

Surprised they're not trying harder to talk it up.

Thargor

Im all for falling prices aswell but there just isn't any construction going on, and even if there was its not the high rise stuff that alleviates pressure in other countries and people continue to pour into Dublin from Ireland and abroad as the article points out, its hard to keep a bearish outlook even with the new rules.

Bob24

Thargor wrote: »

Im all for falling prices aswell but there just isn't any construction going on, and even if there was its not the high rise stuff that alleviates pressure in other countries and people continue to pour into Dublin from Ireland and abroad as the article points out, its hard to keep a bearish outlook even with the new rules.

Overall agreed, but for reference there are (limited) plans for high rise in the docklands: http://www.thejournal.ie/capital-dock-development-plans-2027892-Apr2015/

gaius c

alastair wrote: »

The IT spotted the slowdown the same time as everyone else -

http://www.irishtimes.com/business/economy/property-market-slows-but-not-for-long-1.2299026

Not me. I flagged it last week or the week before based on PPR figures alone.

P.S. Not being entirely serious here!

Bob24

gaius c wrote: »

Not me. I flagged it last week or the week before based on PPR figures alone.

By "everyone" I guess he meant other Irish journalists.

You're playing in a different league ;-) (the one of people who actually take time to look at available data rather than just being a parrot)

L'Enfer du Nord

Bob24 wrote: »

By "everyone" I guess he meant other Irish journalists.

You're playing in a different league ;-) (the one of people who actually take time to look at available data rather than just being a parrot)

In simple terms average property prices are either going up or down. In response to this the media message flips between:

Prices are going up now's the time to buy before they go up even more.

Prices are going down, but they aren't going to go down any more now's the time to buy before they start going up (which will be very soon).