Property Market 2016

Cuddlesworth

TOEJOE wrote: »

Its interesting reading this thread , the sympathy I have is for the young couple living in Dublin with say a combined income of 60k.
There only chance of getting a house is to live with parents or possible rent, (have children) and the look for social housing.

Net income of roughly 4,100 a month. Can borrow a max of 240. Plenty of houses for 200k around Dublin, I can see a fair number in Blanch where I used to live. 20k deposit on 4,100 a month is impossible?

So their only chance of getting a house is to live with their parents, rent forever or social housing? Or their only chance of getting a house in areas where they compete with people who earn twice the amount they do, is to continue renting, live with parents or hope for social housing in very old estates?

What I have some slight sympathy for is the guy with 4 kids and the stay at home Mom who is earning minimum wage. There is your social housing candidate.

PhoenixParker

Rew wrote: »

Combined income sure its not uncommon, savings and ability to save is a whole other thing though. Even if they don't have kids/child care they have rent/mortgage, car loans or debits.

Unless the increase in income is a recent thing, there should be no reason for a couple on a combined income of E100k to have car loans. Their take home would be just shy of E6k/pcm and you can rent a comfortable apartment for two people in Dublin for E1500pcm.

Even allowing for cars, the odd holiday and general living expenses, it's pretty easy to save E3k or more a month.

Michael D Not Higgins

PhoenixParker wrote: »

Unless the increase in income is a recent thing, there should be no reason for a couple on a combined income of E100k to have car loans. Their take home would be just shy of E6k/pcm and you can rent a comfortable apartment for two people in Dublin for E1500pcm.

Even allowing for cars, the odd holiday and general living expenses, it's pretty easy to save E3k or more a month.

People's expenditure generally scales with income. If you're taking 6k/month, you're less worried about going to Donnybrook Fair for the shopping, buying a designer bag worth 4 figures or splashing out on a lease for a luxury vehicle.

Santy2015

PhoenixParker wrote: »

Even if the CB figures only refer to "approved" they could well be correct and still in line with the mortgage brokers comments. We applied for our mortgage in the first week of January and got approval in the second week of February. It was a straightforward application with only four easy to gather missing pieces of information.

January applications could be up massively without affecting January approvals. January approvals would be the result of December applications and many people (including ourselves) ready in December would have waited til the New Year to apply. The mortgage approval centres are basically closed from the 23rd December, people were waiting for exemptions to be available again in the new year before applying and few people start house hunting/go sale agreed in December.

It took that long for approval? Who did you go with if you don't mind me asking? We applied this time 2 weeks ago and heard nothing back yet

PhoenixParker

Santy2015 wrote: »

It took that long for approval? Who did you go with if you don't mind me asking? We applied this time 2 weeks ago and heard nothing back yet

Looking back through my email chain.
We met the broker on 5th January and gave her all the details and paper we'd gathered since before Christmas.
On the 8th she came to me with a few queries which I think I had answered by the end of the day. The applications were then submitted to AIB & KBC pretty much that day.

Jan 15th we had a response from AIB - approval subject to a few documents
Jan 20th we had a response from KBC - approval subject to a few documents

We decided to go with KBC but the docs took a few days to gather (one was a salary cert and my boss was away). That seems to have been done by the 30th.

KBC also organise their own valuation which was carried out the 29th and then repeated (they got it wrong on the house details) on the 2nd or 3rd February.

Official full approval & loan offer was February 11th.

The impression I got from the broker was that we were just ahead of the curve in terms of applications and she was calling daily to chase it as we were under pressure from our estate agent.

Bob24

Latest stats on mortgage approvals: http://blog.myhome.ie/2016/03/01/mortgage-approval-rate-falls-10-2-between-november-and-january/

10% drop between November - January. Also a 14% drop YOY.

SarahMollie

Bob24 wrote: »

Latest stats on mortgage approvals: http://blog.myhome.ie/2016/03/01/mortgage-approval-rate-falls-10-2-between-november-and-january/

10% drop between November - January.

Its well documented that the banks were out of exceptions to the CB rules before the end of 2015 and this impacted approvals.

Bob24

SarahMollie wrote: »

Its well documented that the banks were out of exceptions to the CB rules before the end of 2015 and this impacted approvals.

Indeed - having said that if there was a large backlog of people from last year were waiting to grab exceptions this year - banks will run out even faster in 2016 than they did in 2015. i.e. supporting a downwards trend fro approvals (the -14% YoY figure for January 2015 - January 2016 also seems to point towards that direction).

And I don't know how significant exceptions are to the market as a whole, but if they have a material impact it could lead to a strange situation with artificially boosted demand one half of the year and artificially muted one in the other half.

PhoenixParker

Bob24 wrote: »

And I don't know how significant exceptions are to the market as a whole, but if they have a material impact it could lead to a strange situation with artificially boosted demand one half of the year and artificially muted one in the other half.

That definitely happened last year. There seems to be an expectation that this year the banks will be more cautious with handing out exemptions overall and will also allot a quarter of their exemptions to each quarter so that the same situation doesn't recur.

Not sure if that's what's happening in practice.

johnp001

SarahMollie wrote: »

Its well documented that the banks were out of exceptions to the CB rules before the end of 2015 and this impacted approvals.

If this was the case surely all the mortgages that could not be approved in 2015 due to CB regulation would have been approved on the 4th of January when the banks re-opened in the new calendar year?
According to the BFPI figures the month on month fall was 5% in December but was 10% in January which would suggest the this was not the case.

Theboinkmaster

Cuddlesworth wrote: »

What I have some slight sympathy for is the guy with 4 kids and the stay at home Mom who is earning minimum wage. There is your social housing candidate.

No sympathy - why should my hard-earned tax subsidise his lifestyle and give him social housing? Children are a life choice and if you can't afford your own home and have decent savings there's no way you should be having 4 of them :cool:

Having children isn't an automatic right.

mooreman09

I've been approved for a Mortgage.

The bank in question literally tried to encourage me to borrow as much as I needed. We aren't huge earners. 75k p/a but I suppose they see some potential in our professions. We only required 190k - they approved us for over 260 on the spot and told us if we wanted 300k that it would be very possible with their new 2016 exception limits.

Crazy stuff... No way should people start falling into the traps that were out there 7/8 years ago.

I always stated that I was blessed to not be 5 years older as I would have fallen into the exact turmoil others found themselves in and I want to learn from that!

You can see the cycle in full swing again.

saggart26

Theboinkmaster wrote: »

No sympathy - why should my hard-earned tax subsidise his lifestyle and give him social housing? Children are a life choice and if you can't afford your own home and have decent savings there's no way you should be having 4 of them :cool:

Having children isn't an automatic right.

What would you do if you had kids and you were let go and you needed a place and you couldn’t rely on your family/friends for a dig out?
Would you apply for social housing?

Cuddlesworth

mooreman09 wrote: »

I've been approved for a Mortgage.

The bank in question literally tried to encourage me to borrow as much as I needed. We aren't huge earners. 75k p/a but I suppose they see some potential in our professions. We only required 190k - they approved us for over 260 on the spot and told us if we wanted 300k that it would be very possible with their new 2016 exception limits.

Crazy stuff... No way should people start falling into the traps that were out there 7/8 years ago.

I always stated that I was blessed to not be 5 years older as I would have fallen into the exact turmoil others found themselves in and I want to learn from that!

You can see the cycle in full swing again.

From the actuary or the mortgage adviser?

mooreman09

Cuddlesworth wrote: »

From the actuary or the mortgage adviser?

Its passed through underwriting. Our AIP was 260k. We reduced this to 190 for the actual mortgage. Its subject to confirmation of salary via cert which I have not handed in yet.

They are definitely ''selling'' again.

Rew

mooreman09 wrote: »

Its passed through underwriting. Our AIP was 260k. We reduced this to 190 for the actual mortgage. Its subject to confirmation of salary via cert which I have not handed in yet.

They are definitely ''selling'' again.

Last year when we talked to AIB they were offering us exemption to CB rules without being asked.

The Mulk

mooreman09 wrote: »

Its passed through underwriting. Our AIP was 260k. We reduced this to 190 for the actual mortgage. Its subject to confirmation of salary via cert which I have not handed in yet.

They are definitely ''selling'' again.

I got offered a mortgage recently, to trade up, "unfortunately" they said they couldn't offer me the full term of 35 years, only a 34 year term, based on my age.
I'm 36!

Rew

The Mulk wrote: »

I got offered a mortgage recently, to trade up, "unfortunately" they said they couldn't offer me the full term of 35 years, only a 34 year term, based on my age.
I'm 36!

Yeah thats normal

The Mulk

Rew wrote: »

Yeah thats normal

God, I was hoping to be mortgage free long before I was 70:pac:

SarahMollie

The Mulk wrote: »

God, I was hoping to be mortgage free long before I was 70:pac:

Well you can always pay if off early if you so choose. I've recently upped my payments by 10% and its going to clear my mortgage more than 5 years earlier, not to mention the savings in interest!

Probably won't actually keep the property that long - but also want to have as much equity built up as I can for when I do decide to trade up!

The Mulk

SarahMollie wrote: »

Well you can always pay if off early if you so choose. I've recently upped my payments by 10% and its going to clear my mortgage more than 5 years earlier, not to mention the savings in interest!

Probably won't actually keep the property that long - but also want to have as much equity built up as I can for when I do decide to trade up!

Yeah, we've a few options/ideas of which way to proceed. That was Option 1, max out the mortgage,highest amount/ longest term.
We're still not too sure which way to proceed.

handlemaster

There seems to be a few more properties coming on in Dublin this last week than had been since the start of the year.

mel123

mooreman09 wrote: »

I've been approved for a Mortgage.

The bank in question literally tried to encourage me to borrow as much as I needed. We aren't huge earners. 75k p/a but I suppose they see some potential in our professions. We only required 190k - they approved us for over 260 on the spot and told us if we wanted 300k that it would be very possible with their new 2016 exception limits.

Crazy stuff... No way should people start falling into the traps that were out there 7/8 years ago.

I always stated that I was blessed to not be 5 years older as I would have fallen into the exact turmoil others found themselves in and I want to learn from that!

You can see the cycle in full swing again.

OMG :eek: what bank offered you that??

ckblackrock

The Mulk wrote: »

Yeah, we've a few options/ideas of which way to proceed. That was Option 1, max out the mortgage,highest amount/ longest term.
We're still not too sure which way to proceed.

Just make sure there are no penalties for early repayment of mortgage if you might be in a position to make large lump sum repayments.

Shedite27

mooreman09 wrote: »

The bank in question literally tried to encourage me to borrow as much as I needed. We aren't huge earners. 75k p/a but I suppose they see some potential in our professions. We only required 190k - they approved us for over 260 on the spot and told us if we wanted 300k that it would be very possible with their new 2016 exception limits.

That's not approval, that's Approval In Principle, which is worthless. I got one for silly money last year from TSB. It's only once they've crunched the figures and go through the documents you submitted that you know what you are really approved for.

johnp001

Shedite27 wrote: »

That's not approval, that's Approval In Principle, which is worthless. I got one for silly money last year from TSB. It's only once they've crunched the figures and go through the documents you submitted that you know what you are really approved for.

Yes, the way AIP works is that banks have to compete for customers. They will tell them what they want to hear in order that they choose "that" bank for their mortgage approval.
They can then cherrypick the best risks from among those they have issued AIP to issue their CB rule exemptions to, refusing the less desirable customers who can then go take their business to their competitors.
Any bank that didn't broadly and indiscriminately issue AIPs would be left with the slim pickings of those rejected by the banks that did!

gaius c

Cuddlesworth wrote: »

Bit patronising? Combined 100k base is 6k a month after tax. Without kids, its pretty easy to save upwards of 30k a year, even with Dublin rents. You throw in living with parents or renting far out for a while and you can get that to 40/45k a year. The people I know with good jobs and relationships are not having kids, but even with kids it just takes a little while longer. I'm 31 and I can tell you now that a 100k deposit is very achievable.

Sure but you're looking at the top 14% of Irish households so 86% of households take in less. Those 100k+ households may spend the kind of money you are talking about and support that segment of the market but only a segment.

Bob24

gaius c wrote: »

Sure but you're looking at the top 14% of Irish households so 86% of households take in less. Those 100k+ households may spend the kind of money you are talking about and support that segment of the market but only a segment.

Agreed, but most people who need that kind of deposit will be in Dublin, and while I don't have the numbers for Dublin I assume if the national figure is 14% the Dublin one is quite higher?

(not saying everything is al-right btw - just wondering how bad it is :-))

Cuddlesworth

gaius c wrote: »

Sure but you're looking at the top 14% of Irish households so 86% of households take in less. Those 100k+ households may spend the kind of money you are talking about and support that segment of the market but only a segment.

Top 14% of all households, or top 14% of 30-40 year old couples living in South Dublin? Because those are the ones competing for those houses, not pensioners in the country.

gaius c

Cuddlesworth wrote: »

Top 14% of all households, or top 14% of 30-40 year old couples living in South Dublin? Because those are the ones competing for those houses, not pensioners in the country.

All households in the state. I would expect the number of 30-40 households on 100k+ to be significantly lower than 14% of that age group because they are still early in their careers.