Who's buying all the Million Euro houses?

Zascar

When I drive around any of the nice areas in Dublin, and look at some of the houses, it always baffles me how so many fairly ordinary 3 bed houses going for 600k, 700k and more sometimes. If I look for a really really nice house, detached, 5 bed, garage etc - they've got to be approaching a million and sometimes more. I do pretty well for myself but I cant afford anything like what I'd like and nowhere near an area I'd like to live in. But I have to wonder - who is buying these? I struggle to believe there are that many people earning several hundred k salaries. Their mortgages must be 3-4k+a month. Is it people who bought 15 years ago and are just trading up a little from a house they have massive equity in?

With the sheer number of houses priced miles and miles out of the reach of even moderately successful people - you have to wonder, who's buying them all and how?

Slydice

Not many.

In the whole country, there's only been around 1437 above 500k sold so far this year.



Source: https://www.propertypriceregister.ie

alastair

Slydice wrote: »

Not many.

Enough tbh - pretty much every day a million euro plus house sells on those figures.

OP - you'd have to assume the vast majority are trading up, and their property investment has done a lot of the heavy lifting, so they don't need massive salaries.

the groutch

2,510 houses under 50k?

jon1981

Personally know of two people buying in the 800k-1m mark and one are funding it based on inheritance and the other made 200-300k on a property sale 6 yrs ago and have been renting until they bought recently. There is an awful lot of money out there.

For every buyer out there that spent mad money on shoe boxes and the likes during the boom there was a seller on the other side that was happy to pocket the money, rent and sit pretty... I gather these types of buyer are still entering the market.

MouseTail

Very few of these houses are bought with a mortgage only. As said above, there is a lot of cash on deposit in Ireland, so a mix of money made on property, shares, inheritances or parental gift.

mariaalice

The only people I know who have a circa 8000k house, make a lot of money from their first property so they had a very large deposit on the new property, they both work and I would say have an income over 160k if not more, while I don't know the details I would say they have a large mortgage.

jon1981

With out combined incomes we probably could have a mortgage in excess of 500k, more under the old rules. So I guess if you are coming in with the proceeds of a previous sale or inheritance, an 800k house is achievable. However We (or more I) are pretty risk averse so didn't take a mortgage anywhere near the max.

There are many couples out there with combined salaries of well over 140k.

Eugene Norman

alastair wrote: »

Enough tbh - pretty much every day a million euro plus house sells on those figures.

OP - you'd have to assume the vast majority are trading up, and their property investment has done a lot of the heavy lifting, so they don't need massive salaries.

That doesn't make much sense given the reality since 2008.

Larbre34

Theres a pox load of cash hoarded away in this place for the last 8 years, though you won't hear about it from the people who have it. Look at all the cash purchasing that sustained a comatose property market for 4 full years. Many people took little or no hit to their personal consolidated assets in the crisis and anyone with diversified interests is probably even recovering losses on equities at this stage.

If 2,000 households set themselves up in a house worth a million euro plus each year, thats a lot of homes, but its still only 0.1% of households in the land. Those homes are concentrated in 5 or 6 wealthy districts in the Country, so it just appears more disproportionate than it really is.

Ush1

Are you asking are they first time buyers? I'd imagine most aren't.

delahuntv

Anyone working for Google / Facebook etc have had HUGE increases in their employee shares. I know of one FB employee who cashed half her shares and bought a very nice pad without the need of a mortgage. And she would not be considered a high ranking staff member either.

Add to that inheritances and other high earners and you have a decent market of people with decent money to spend.

jon1981

delahuntv wrote: »

Anyone working for Google / Facebook etc have had HUGE increases in their employee shares. I know of one FB employee who cashed half her shares and bought a very nice pad without the need of a mortgage. And she would not be considered a high ranking staff member either.

This is true, a lot of people working for tech companies are making a killing in stock rewards. Coupled with the USD/Eur exchange rate it's a good time for these people that have stock in USD.

seamus

There's a not insignificant number of millionaires still in Ireland. Some buy multiple properties because they just like to have multiple properties, others still see them as investments. Plenty of people in their 50s with equity of €700k+ in their properties who don't need that big a mortgage to go over the €1m mark.

Former neighbour of my in-laws were particularly wealthy, the husband worked in an area that did particularly well because of the recession. Went out to Palmerston Park one day as a family. On the way home, saw a nice house in Rathgar, asking 2.5m or something, and had a look. Bought it on the spot, moved in two weeks later. They weren't at any stage thinking about moving, the wife just took a shine to this house.
Sold their existing house to another neighbour who decided that buying was easier than renovating their current house, so they moved a few doors down.

It's how the other half lives. Many don't even need bank involvement and consider putting their money into a house on the same level that we think about putting it in a savings account.

mariaalice

Ush1 wrote: »

Are you asking are they first time buyers? I'd imagine most aren't.

Its most unlikely to be first time buyers or someone on a single income, it is usually a couples second home and one they intend to stay in.

On the income issue, lots of pharmacist's, doctors, IT, accountancy, business owners generally have a good income you would be surprised the income you would have from a well looked centre type shop. Then you have to take in account its often two incomes buying the houses.

sebcity

seamus wrote: »

On the way home, saw a nice house in Rathgar, asking 2.5m or something, and had a look. Bought it on the spot, moved in two weeks later.

Someday!!

jon1981

30% of top tax rate payers earn over 100k ( granted the top rate threshold is too low) with equals about 130k people. I would say a larger percentage earn between 70k and 100k. Assuming alot of these individuals may form relationships with people earning similar amounts...that's alot of couples with combined high purchasing power.


http://www.irishtimes.com/business/economy/the-real-life-numbers-behind-populist-tax-rates-1.2104873

According to Revenue, an increase of the top rate of tax by 1 per cent will raise €225 million in a full year. But of the 433,600 people who pay the top rate, only 30 per cent earn €100,000 or more.

According to some very helpful datasets recently supplied by Revenue there will be 129,919 people (more technically tax-paying “units”) earning over €100,000 this year. (There are a total of 2,341,200 tax units/payers in the country).

The stats seem to focus on those over 100k and then group everyone else. I would argue as many ,if not more, earn between 75-100k.

Barely Hedged

jon1981 wrote: »

30% of top tax rate payers earn over 100k ( granted the top rate threshold is too low) with equals about 130k people. I would say a larger percentage earn between 70k and 100k. Assuming alot of these individuals may form relationships with people earning similar amounts...that's alot of couples with combined high purchasing power.


http://www.irishtimes.com/business/economy/the-real-life-numbers-behind-populist-tax-rates-1.2104873





The stats seem to focus on those over 100k and then group everyone else. I would argue as many ,if not more, earn between 75-100k.

As per the answers above, analysing fixed income levels and trying to interpret the original posters question based on this, pardon the pun, doesn't add up

jon1981

Barely Hedged wrote: »

As per the answers above, analysing fixed income levels and trying to interpret the original posters question based on this, pardon the pun, doesn't add up

Combine this income with some level of inheritance or profit off a sale of a previous house and it becomes very achievable. To my point previously, if you have read the thread, this scenario is not uncommon.

alastair

Eugene Norman wrote: »

That doesn't make much sense given the reality since 2008.

Of course it does. You've rather more purchasing years totted up prior to 2008, than the seven years since. Buyers are rather more likely to trade up with older/cleared mortgages, than recent purchases.

We're currently selling/buying. Property bought in 1999. While we're not anywhere near the million euro gaff territory, there's enough equity in the house to trade up/sideways and borrow very little for the priviledge. The same principle would apply for those with more valuable fish to fry.

gaius c

The answer is not many. Stock of the million plus houses is increasing and some of them are not shifting.

alastair

gaius c wrote: »

The answer is not many. Stock of the million plus houses is increasing and some of them are not shifting.

Which ignores the fact that one million+ € house sells every day - which is a substantial number in my book.

P. Breathnach

I did a back-of-an-envelope exercise a few months ago (can't remember my methodology) and came to the conclusion that €1m+ properties remained on the market about twice as long as properties priced under €1m.

So if you break down the market on the basis of what is currently for sale, you might get a distorted view.

I'd buy into the idea that when you are dealing with properties priced over a certain level (my guess: about €650k) you are looking at buyers who have substantial capital to aid in the purchase. These are not people not looking for 90% LTV.

Dob74

jon1981 wrote:

For every buyer out there that spent mad money on shoe boxes and the likes during the boom there was a seller on the other side that was happy to pocket the money, rent and sit pretty... I gather these types of buyer are still entering the market.

I wouldn't say that's necessarily true. Most of the time when you are selling your house you have to buy another. And if you are renting you are spending 15k plus a year for a house anyway decent.
Expensive house prices are just a tax on labour and do not benefit productive workers. I still can't figure out how people can pay that much for housing in Dublin. Wages and salaries are not that good. 700k for a semi on the south side. insane

Barely Hedged

Dob74 wrote: »

I still can't figure out how people can pay that much for housing in Dublin. Wages and salaries...

There's your answer. Stop focusing on wages and salary stats. Variable compensation, share awards, business owners and inheritance

GreeBo

Dob74 wrote: »

I wouldn't say that's necessarily true. Most of the time when you are selling your house you have to buy another. And if you are renting you are spending 15k plus a year for a house anyway decent.
Expensive house prices are just a tax on labour and do not benefit productive workers. I still can't figure out how people can pay that much for housing in Dublin. Wages and salaries are not that good. 700k for a semi on the south side. insane

15k in rent makes it pretty easy to save a wedge if you have been paying 30k in mortgage.

A tax on labour how?
Not benefiting productive workers how?

Wages and salaries clearly ARE that good, thats why the market rate on the south side is that high.

jon1981

I'd argue that if a couple are bringing in 150k+, over 4/5 years you could easily save 30k+ a year. I think salaries do factor somewhat.

gaius c

alastair wrote: »

Which ignores the fact that one million+ € house sells every day - which is a substantial number in my book.

And you're ignoring my post which is that stock of them is increasing, i.e. they are being put up for sale faster than they are selling. Supply > demand in that segment.

There's a tongue-in-cheek thread on the pin monitoring the glut of €1 million plus houses in Malahide that are not selling and will probably require price cuts to sell.

Barely Hedged

jon1981 wrote: »

I'd argue that if a couple are bringing in 150k+, over 4/5 years you could easily save 30k+ a year. I think salaries do factor somewhat.

For 1mio house's, not so much.

For anything more than 1 mio, it becomes everything else but fixed salaries

Barely Hedged

gaius c wrote: »

And you're ignoring my post which is that stock of them is increasing, i.e. they are being put up for sale faster than they are selling. Supply > demand in that segment.

There's a tongue-in-cheek thread on the pin monitoring the glut of €1 million plus houses in Malahide that are not selling and will probably require price cuts to sell.

I thought > 95% of the property pin threads were tongue in cheek, there's so many clueless and the world is going to end people on there

gaius c

jon1981 wrote: »

I'd argue that if a couple are bringing in 150k+, over 4/5 years you could easily save 30k+ a year. I think salaries do factor somewhat.

So it will take nearly 7 years to save the deposit and they'll still be breaking the LTI rules by a factor of 50%.

So our dastardly plan to live in Crumlin and then move direct to Killiney isn't going to go as smoothly as we had hoped.