Proposal for a Generous New Grant for First Time Buyers

_Kaiser_

dearg lady wrote: »

I fully appreciate all those points, but everyone (even those who took out Celtic Tiger loans!) has had to deal with those issues. The only one unique to renters is the current cost of rents. However rents were at historically low levels up until around 2 years ago, so swings and roundabouts on that one.

I just find it hard to understand how someone who never took out a mortgage, whose career went from strength to strength doesn't have significant savings.

As a one income family you will simply have to buy at the cheaper end of the market, that's a given.

Just to give an example, let's assume a salary of 50,000, by 3.5 times is 175,000. This along with a deposit of 25,0000 gives total purchasing power of 200,000. There are 2 beds and even some 3 beds available within this price range. Certainly a year or two ago there would have been a lot more available at this level.

I already covered the savings points above... redundancy + children + renting in Dublin/inter-county commuting will make it very hard to save after everything is paid if you have only 1 income, and not everyone can rely on parents for hand-outs/help with deposits or live at home while they save. €50k is also a fairly large salary by all accounts that many people (even in long term permanent jobs) are nowhere near earning.

Don't forget that you're competing against couples where both work, and may be sharing living expenses, and while yes, there are still properties at the "cheaper" end thee are mostly 1 bed apartments (unsuitable if you have kids - even "part time" kids) or in places that are miles out or in areas that (let's be honest here) you wouldn't want to live in.

Really though the focus shouldn't be on giving people cash/grants/rebates to get them up to the ever-increasing property prices... it should be focused on finding ways to REDUCE these prices by way of increased supply and sorting out the rental sector PROPERLY by addressing the regulation and appeals processes, but also making long-term rental attractive to those who can't afford or maybe don't WANT to buy through things like long-term leases, rental property that is suitable for long-term occupation etc. It seems to work pretty well elsewhere.

In short, no-one should NEED to own a house to feel secure in their home. For those who choose to it should be affordable and sustainable, but those who prefer to rent shouldn't be treated as "second class", nor should the sector they operate in.

68 lost souls

dearg lady wrote: »

I fully appreciate all those points, but everyone (even those who took out Celtic Tiger loans!) has had to deal with those issues. The only one unique to renters is the current cost of rents. However rents were at historically low levels up until around 2 years ago, so swings and roundabouts on that one.

I just find it hard to understand how someone who never took out a mortgage, whose career went from strength to strength doesn't have significant savings.

As a one income family you will simply have to buy at the cheaper end of the market, that's a given.

Just to give an example, let's assume a salary of 50,000, by 3.5 times is 175,000. This along with a deposit of 25,0000 gives total purchasing power of 200,000. There are 2 beds and even some 3 beds available within this price range. Certainly a year or two ago there would have been a lot more available at this level.

There are zer0 0 no new build houses/apartments on the island of Ireland available under 200k.

_Kaiser_

Villa05 wrote: »

They know the results of what they are doing and it was said in the debate. This is greedy self intrest from politicians nothing more or less. Economic treason

The problem is the parochial nature of our political system (and property IS political, make no mistake). How many times have we heard the complaints that Dublin "gets everything" - forgetting of course that Dublin is subsidising the rest of the country.

As a result rural politicians are hardly going to vote in favour to measures (no matter how much they're needed) to increase that investment even further as it will crucify them at home come polling day. This is why we have a sub-standard public transport system in Dublin - certain corridors aside - for example.

Don't forget either that many politicians are also landlords. It's in their interest to see prices rising beyond reason.

Plus we don't "do" strategic and long-term planning in this country, as we've seen time and again when they have to patch up (at huge expense of course) whatever half-assed measure was originally put in.

dearg lady

_Kaiser_ wrote: »

I already covered the savings points above... redundancy + children + renting in Dublin/inter-county commuting will make it very hard to save after everything is paid if you have only 1 income, and not everyone can rely on parents for hand-outs/help with deposits or live at home while they save. €50k is also a fairly large salary by all accounts that many people (even in long term permanent jobs) are nowhere near earning.

Don't forget that you're competing against couples where both work, and may be sharing living expenses, and while yes, there are still properties at the "cheaper" end thee are mostly 1 bed apartments (unsuitable if you have kids - even "part time" kids) or in places that are miles out or in areas that (let's be honest here) you wouldn't want to live in.

Really though the focus shouldn't be on giving people cash/grants/rebates to get them up to the ever-increasing property prices... it should be focused on finding ways to REDUCE these prices by way of increased supply and sorting out the rental sector PROPERLY by addressing the regulation and appeals processes, but also making long-term rental attractive to those who can't afford or maybe don't WANT to buy through things like long-term leases, rental property that is suitable for long-term occupation etc. It seems to work pretty well elsewhere.

In short, no-one should NEED to own a house to feel secure in their home. For those who choose to it should be affordable and sustainable, but those who prefer to rent shouldn't be treated as "second class", nor should the sector they operate in.

Apologies, I was still referencing the original post, not yours specifically. I do agree with most of what you say.

68 lost souls wrote: »

There are zer0 0 no new build houses/apartments on the island of Ireland available under 200k.

I never mentioned new builds

68 lost souls

dearg lady wrote: »

I never mentioned new builds

The grant applies to new bulids only and so they are what is relevent

Lux23

I am delighted. I am due a significant pay rise in the next couple of months so its possible I could own my own home in the next 18 months!

Tigger

68 lost souls wrote: »

The grant applies to new bulids only and so they are what is relevent

There are loads of new builds in Ireland for less than 200k

http://touch.daft.ie/ireland/new-homes-for-sale/?s%5Bmnp%5D=25000&s%5Bmxp%5D=200000&s%5Bsort_type%5D=a&offset=10

68 lost souls

Tigger wrote: »

There are loads of new builds in Ireland for less than 200k

http://touch.daft.ie/ireland/new-homes-for-sale/?s%5Bmnp%5D=25000&s%5Bmxp%5D=200000&s%5Bsort_type%5D=a&offset=10

I checked on myhome and there were none

http://www.myhome.ie/residential/ireland/new-homes/property-for-sale?type=55|98&minprice=0&maxprice=175000

Of those there are 2 in Dublin both 2 beds in Hampton woods, Finglas. I'm sure that leaves plenty of options for the hundreds of first time buyers looking to be within Dublin.

The_Conductor

Tigger wrote: »

There are loads of new builds in Ireland for less than 200k

Not where the majority of people want to live.
The vast majority of the new builds that the scheme is to cover- are anticipated to be in the various SDZs around Dublin- the largest of which is to be Cherrywood.

Also- the average construction cost of a newbuild is currently 330k- which outside of Dublin- is significantly above the current property price.

Key to all of this- is bringing the construction cost down from its frankly ridiculous levels- to a more realistic level- probably around the 200k mark.

Note- the newbuilds are anticipated to be a minimum 3 bed semi- not an apartment- and of a reasonable size and spec- in a location where people want/need to live.

You will find cheaper outside of the Dublin area- however, the property shortages at the moment are focused on Dublin/Cork/Waterford/Galway - there are thousands of units elsewhere- that estate agents can't even give away.

Tigger

The_Conductor wrote: »

Not where the majority of people want to live.
The vast majority of the new builds that the scheme is to cover- are anticipated to be in the various SDZs around Dublin- the largest of which is to be Cherrywood.

Also- the average construction cost of a newbuild is currently 330k- which outside of Dublin- is significantly above the current property price.

Key to all of this- is bringing the construction cost down from its frankly ridiculous levels- to a more realistic level- probably around the 200k mark.

He said there are no new builds on the island of Ireland
It's simply not true.
A construction price of 330 must include a massive site cost I'd love to see the breakdown

Ok so I went on this https://www.scsi.ie/advice/house_rebuilding_calculator
If you plug in a 120m2 semi it gives a rebuild cost of 220 in rural Ireland and of 330 in Dublin
What's that about

68 lost souls

Tigger wrote: »

He said there are no new builds on the island of Ireland
It's simply not true.
A construction price of 330 must include a massive site cost I'd love to see the breakdown

https://www.scsi.ie/news/view?id=73

The_Conductor

Tigger wrote: »

He said there are no new builds on the island of Ireland
It's simply not true.
A construction price of 330 must include a massive site cost I'd love to see the breakdown

There are thousands of new builds on the island of Ireland @ under 200k- if you're willing to look at the border counties- you could even buy an entire apartment block for this price- the fact of the matter is- this is not the cost of construction of the units- and most of the units for sale at these prices- are not where people want to live.

He never mentioned 'the island of Ireland'- though it would have been helpful had he clarified his comments somewhat.

The average construction cost of a 3 bed in Dublin is currently 330k (which includes an 11% margin for the builder). The largest cost- wholly independent of site costs- for developers- is actually finance- the only finance developers can draw on from Irish lenders is at between 15 and 20% (aka- they are paying credit card levels of interest on their borrowings- and obviously they need cash to fund building works- they only get paid for the units at the end of the cycle.

Irish lenders- do not want to lend to developers- under anything other than punitive interest rates- this is the knux of the problem. Site costs are a minor irritant in comparison.

listermint

The_Conductor wrote: »

There are thousands of new builds on the island of Ireland @ under 200k- if you're willing to look at the border counties- you could even buy an entire apartment block for this price- the fact of the matter is- this is not the cost of construction of the units- and most of the units for sale at these prices- are not where people want to live.

He never mentioned 'the island of Ireland'- though it would have been helpful had he clarified his comments somewhat.

The average construction cost of a 3 bed in Dublin is currently 330k (which includes an 11% margin for the builder). The largest cost- wholly independent of site costs- for developers- is actually finance- the only finance developers can draw on from Irish lenders is at between 15 and 20% (aka- they are paying credit card levels of interest on their borrowings- and obviously they need cash to fund building works- they only get paid for the units at the end of the cycle.

Irish lenders- do not want to lend to developers- under anything other than punitive interest rates- this is the knux of the problem. Site costs are a minor irritant in comparison.

What happened to the Credit Union offer of finance that they put out into the public domain. No one seemed to even consider that mantle .

The_Conductor

listermint wrote: »

What happened to the Credit Union offer of finance that they put out into the public domain. No one seemed to even consider that mantle .

The League of Credit Unions in Ireland- had the riot act read to them by the Central Bank- and a number of their members have had to be rescued by other members in recent times. The credit unions are awash in cash- however, it is not their prerogative to throw money at property- and they do not necessarily have the inhouse expertise to properly evaluate the risks associated with this sector (however, the flipside of the coin- is they don't have the legacy issues that many of the other lenders have in the sector).

One way or the other- other than in limited circumstances- it isn't going to happen.......... (despite the fact that they have historical amounts of cash sitting on deposit doing nothing- and nowhere to park it).

listermint

The_Conductor wrote: »

The League of Credit Unions in Ireland- had the riot act read to them by the Central Bank- and a number of their members have had to be rescued by other members in recent times. The credit unions are awash in cash- however, it is not their prerogative to throw money at property- and they do not necessarily have the inhouse expertise to properly evaluate the risks associated with this sector (however, the flipside of the coin- is they don't have the legacy issues that many of the other lenders have in the sector).

One way or the other- other than in limited circumstances- it isn't going to happen.......... (despite the fact that they have historical amounts of cash sitting on deposit doing nothing- and nowhere to park it).

Well perhaps its something that should be tapped into, But of course that would be contrary to the popular plan in Government Circles to seek private investment external to the Island isnt it.


Laughable. Just Laughable.

68 lost souls

The_Conductor wrote: »

He never mentioned 'the island of Ireland'- though it would have been helpful had he clarified his comments somewhat.

To be fair I did say the island of Ireland, that was based off the myhome search I did rather than Daft but yes you are right, those that are available at that price are so due to the fact that they are in areas where pretty much no one would choose to live in.

mel123

There are people here saying **** it, i'm going to jump on the bandwagon.
I'm just curious to know what has happened to these people who jumped on the bandwagon way back and are now suffering? Genuine question. The reports I read always seem to be about the bankers and millionaires, but whats happened/happening to the normal joe soap who just cant pay their mortgage now for whatever reason?

Claw Hammer

mel123 wrote: »

There are people here saying **** it, i'm going to jump on the bandwagon.
I'm just curious to know what has happened to these people who jumped on the bandwagon way back and are now suffering? Genuine question. The reports I read always seem to be about the bankers and millionaires, but whats happened/happening to the normal joe soap who just cant pay their mortgage now for whatever reason?

The normal Joe Soap is being harrassed by his bank, threatened with court proceedings and being evicted.

Idbatterim

Irish lenders- do not want to lend to developers- under anything other than punitive interest rates- this is the knux of the problem. Site costs are a minor irritant in comparison.

I appreciate this is one of the the problem areas, that and the interest rates here being charged on mortgages being far more lucrative for the banks than on the continent. Could the state set up a state bank simply for financing of property? and at rates that would simply have it break even or so?

If you look at the breakdown of property prices and the biggest waste, the biggest waste is that going to the bank. At least the rest of it goes back to government coffers or mostly into the construction industries back pockets, much of it back to the state in taxes and then the rest circulated around the economy...

listermint

Idbatterim wrote: »

I appreciate this is one of the the problem areas, that and the interest rates here being charged on mortgages being far more lucrative for the banks than on the continent. Could the state set up a state bank simply for financing of property? and at rates that would simply have it break even or so?

If you look at the breakdown of property prices and the biggest waste, the biggest waste is that going to the bank. At least the rest of it goes back to government coffers or mostly in the construction industries back pockets...

Biggest problem is we own the Banks, we'll at least thats what we are being told. Yet we have zero power to lower their rates to assist getting real money back into the economy in terms of peoples spending power.

Claw Hammer

Idbatterim wrote: »

I appreciate this is one of the the problem areas, that and the interest rates here being charged on mortgages being far more lucrative for the banks than on the continent. Could the state set up a state bank simply for financing of property? and at rates that would simply have it break even or so?

If you look at the breakdown of property prices and the biggest waste, the biggest waste is that going to the bank. At least the rest of it goes back to government coffers or mostly into the construction industries back pockets, much of it back to the state in taxes and then the rest circulated around the economy...

The continental banks don't have the bad debt experience and legal regime the Irish banks have.

seamus

mel123 wrote: »

There are people here saying **** it, i'm going to jump on the bandwagon.
I'm just curious to know what has happened to these people who jumped on the bandwagon way back and are now suffering? Genuine question. The reports I read always seem to be about the bankers and millionaires, but whats happened/happening to the normal joe soap who just cant pay their mortgage now for whatever reason?

Not a lot tbh. Their banks are probably annoying them, but the number of repossession actions being taken are extremely low (or at least have been in the recent past).

It seems likely that the banks were unofficially told to do everything they can to help restructure peoples' debts, but hold off on the repossession actions against Joe Soaps until the economy and wages picked up again.

Most of the repossessions thus far have been against landlords and second homes.

Slight aside, a facebook friend wrote a long rant in response to some article, about the trauma he endured having to go through a repossession, losing a home, being hounded by banks, the stress and worry it brought into his life. And he duly received hundreds of sympathetic and angry responses about what he "had been put through".
Which confused me considering his facebook feed was chocked full of smiley happy photos and pictures of dinner at Chez Max ad Roly's.

Offline I find out that the "home" he lost, was in fact someone else's home that he was renting out. It was his second property for which he just stopped paying the mortgage when his wife lost her job. :rolleyes:

Idbatterim

Biggest problem is we own the Banks, we'll at least thats what we are being told. Yet we have zero power to lower their rates to assist getting real money back into the economy in terms of peoples spending power.

that appears to be true. So who in the banks is setting the rates? Surely the government as massive majority shareholder, can simply replace the board etc and get in staff to do what it wants?

Funny how the Neary wasnt meant to be influenced by government, but they sure got him to do what they wanted :rolleyes:

I mean getting AIB to simply lower rates of lending to developers and consumers, even at far more reasonable rates, would force BOI to follow suit...

The continental banks don't have the bad debt experience and legal regime the Irish banks have.

what are they worried about, sure as night follows day, the "systemic banks" AIB and BOI would be bailed out again if we had another crisis! They are totally profiteering and I get why they are. But the banks are too important to let them do as they please... Not just in times of crisis, but even now that we are out of the crisis, they are causing issues! There is a never a middle ground in Ireland, its always one extreme to the other!

listermint

Idbatterim wrote: »

that appears to be true. So who in the banks is setting the rates? Surely the government as massive majority shareholder, can simply replace the board etc and get in staff to do what it wants?

Funny how the Neary wasnt meant to be influenced by government, but they sure got him to do what they wanted :rolleyes:

I mean getting AIB to simply lower rates of lending to developers and consumers, even at far more reasonable rates, would force BOI to follow suit...

We need to offload the shares for profit, (i think we already are in profit if im not mistaken) so removing that conflict quicker would be the best option.

Idbatterim

ok so we offload the share and then what? lose any influence? Who appoints the banks board?

The Government should do as little as is humanly possible in the way of interfering with the banks.

We don't need to damage them before we manage to sell them on.

yqtwqxqm

Not once in history has interference by the government in the property market in Ireland resulted in anything good.
Not once have they not made it even worse than it was before.

Tigger

68 lost souls wrote: »

There are zer0 0 no new build houses/apartments on the island of Ireland available under 200k.

The_Conductor wrote: »

There are thousands of new builds on the island of Ireland @ under 200k- if you're willing to look at the border counties- you could even buy an entire apartment block for this price- the fact of the matter is- this is not the cost of construction of the units- and most of the units for sale at these prices- are not where people want to live.

He never mentioned 'the island of Ireland'- though it would have been helpful had he clarified his comments somewhat.

The average construction cost of a 3 bed in Dublin is currently 330k (which includes an 11% margin for the builder). The largest cost- wholly independent of site costs- for developers- is actually finance- the only finance developers can draw on from Irish lenders is at between 15 and 20% (aka- they are paying credit card levels of interest on their borrowings- and obviously they need cash to fund building works- they only get paid for the units at the end of the cycle.

Irish lenders- do not want to lend to developers- under anything other than punitive interest rates- this is the knux of the problem. Site costs are a minor irritant in comparison.

ok

Tigger

Tigger wrote: »

He said there are no new builds on the island of Ireland
It's simply not true.
A construction price of 330 must include a massive site cost I'd love to see the breakdown

Ok so I went on this https://www.scsi.ie/advice/house_rebuilding_calculator
If you plug in a 120m2 semi it gives a rebuild cost of 220 in rural Ireland and of 330 in Dublin
What's that about

cxan anyone explain why a dublin build is soo much dearer as it would seem to me that the construction industry want much more money to build in areas that they know the houses cost more in.
in other words if you know an equivatlent built house is worth 330 then it costs 330 to build but if they going rate for a house is 220 then it only costs 220 to build
cant see any other reason

68 lost souls

Tigger wrote: »

cxan anyone explain why a dublin build is soo much dearer as it would seem to me that the construction industry want much more money to build in areas that they know the houses cost more in.
in other words if you know an equivatlent built house is worth 330 then it costs 330 to build but if they going rate for a house is 220 then it only costs 220 to build
cant see any other reason

I would imagine land cost is one of the biggest variants?