Will house prices ever stop growing?

Samuel T. Cogley

Cyrus wrote: »

What's quite decent salaries ?

We've an annual income somewhere just shy of 100K and chose* to buy somewhere in the 250-300K bracket in 2015, prices haven't changed that much in this area but I concede it is more expensive to buy a house. I balk a little bit when people say they can't find stuff on decent salaries as we manage two mortgages and quite a nice lifestyle on that figure (some of it made up from rental income). Many people on the 100K bracket somehow feel it's a god given right to live in leafy SoCo. Dublin.

That income is from a project manager (wife) and an semi-skilled/unskilled worker (me) so I really think there are some misconceptions on decent salary which is 45K+ or mismanagement of finances.

I'm not suggesting that people earning under 45K should 'try harder' or move jobs, just that one should realise that perhaps you're doing something you love rather than trying to earn a tonne of cash. I'm also aware how hard it is to a) break into some professions or b) train for a better job.

*Well that and the neg equity on the apartment :pac:

knipex

Idbatterim wrote: »

I think its time people started questioning why they should have to face an every decreasing quality of life or for example, why did you have to struggle so much to buy a home?

Because people used to accept the fact that if you wanted something you had to earn it. You had to work for it..

My grandmother used to say that anything you didn't earn you didn't appreciate. She was right..

I work with a guy who is 32, he and his wife are always complaining about how tight things are and where in recently with their bank to try and look at their mortgage, get it extended etc. He wanted to reduce the monthly payments by €200. He told me today he is 2 months behind in his repayments and that his mother just gave him cash to clear his credit card.

Next month he is off for two weeks in Croatia. He and his wife do not cook, are very proud of the fact. They buy lunch out every work day and go out for dinner every Saturday and Sunday. They go out at least one night a week most weeks 2 nights. They have 2 sky subs, and he spent 2 days last week telling me about his amazing 4K 60" TV he got in the sales in Harvey Norman at a special discounted finance rate. They also seem to go away for at least a weekend a month to either a concert of just a weekend away..

When i mentioned that if he cut back on the nights out, started cooking at home and cut reduced the weekends away that he could easily afford the €200 a month and save a few quid he looked at me like I wanted him to sell a kidney..

He also refused to pay his water charges, complains about property tax, gives out about the tax he pays but also they should be helping him pay for his house, giving him free water, bins etc, nurses teachers etc should get a 25% pay increase and all GP care medicines etc should be free. But he wants to pay less tax..

He has never, not once, voted in an election, a referendum nothing..

How I have resisted the urge to slap him around the head I have no idea..

Bob24

knipex wrote: »

Because people used to accept the fact that if you wanted something you had to earn it. You had to work for it..

My grandmother used to say that anything you didn't earn you didn't appreciate. She was right..

I work with a guy who is 32, he and his wife are always complaining about how tight things are and where in recently with their bank to try and look at their mortgage, get it extended etc. He wanted to reduce the monthly payments by €200. He told me today he is 2 months behind in his repayments and that his mother just gave him cash to clear his credit card.

Next month he is off for two weeks in Croatia. He and his wife do not cook, are very proud of the fact. They buy lunch out every work day and go out for dinner every Saturday and Sunday. They go out at least one night a week most weeks 2 nights. They have 2 sky subs, and he spent 2 days last week telling me about his amazing 4K 60" TV he got in the sales in Harvey Norman at a special discounted finance rate. They also seem to go away for at least a weekend a month to either a concert of just a weekend away..

When i mentioned that if he cut back on the nights out, started cooking at home and cut reduced the weekends away that he could easily afford the €200 a month and save a few quid he looked at me like I wanted him to sell a kidney..

He also refused to pay his water charges, complains about property tax, gives out about the tax he pays but also they should be helping him pay for his house, giving him free water, bins etc, nurses teachers etc should get a 25% pay increase and all GP care medicines etc should be free. But he wants to pay less tax..

He has never, not once, voted in an election, a referendum nothing..

How I have resisted the urge to slap him around the head I have no idea..

While there is truth in the above (and your colleague definitely feels too entitled to a certain lifestyle), it is *far* from the only explaination (and it would be extremely unfair to say the whole generation is that way - I am slightly older than him and certainly manage my finances better).

I won't get too technical but the other (huge) part of the story is that nowadays capital income is much more efficient than labour income compared to a few decades ago. In other words accumulating wealth from your own labour has become more difficult relatively to growing wealth you already have, which means that your hard working and thrifty person starting from scratch will have a much harder time today to make it to the club of large asset owners (including property) than they did 30 or 40 years ago.

All this is of course to the disadvantage of younger generations as they are the ones who typically start from scratch and have to accumulate capital from their labour rather that growing their wealth from existing capital.

Thomas Piketty's Capital in the 21st Century documents this in details and was overwhelmly acclaimed by economists around the world.

maninasia

Yep basically the profit from productivity and globalisation gains have by and large gone to capital over the last few decades.
At least for Westerners, it's different if you include Chinese in the calculations.

Also the financial system with its low interest rates and bailouts has largely supported asset holders and individual and corporation who can access credit.

Bob24

maninasia wrote: »

At least for Westerners, it's different if you include Chinese in the calculations.

Yes, lower/middle classes in developing countries are also benefiting. But that's only until their country becomes too developed. Chinese people will find out the hard way in the next 2 decades (and knowing China a good bit I think it has started already in the most developed Chinese cities such as Beijing, Shanghai, or Shenzhen).

Anyway - end of my off-topic comment here :-)

knipex

Bob24 wrote: »

While there is truth in the above (and your colleague definitely feels too entitled to a certain lifestyle), it is *far* from the only explaination (and it would be extremely unfair to say the whole generation is that way - I am slightly older than him and certainly manage my finances better).

Oh I agree, its not the entire generation and the attitude has always existed within a minority but in the last 10 to 20 years it has expended dramatically..

I am not dramatically older than you are but even i can see the change,

My parents had it far harder than me and I can only imagine how they feel..

As for my grandparents..... I remember a story from my grandmother about her, her sister and a cousin sharing a pair shoes and a dress...

The_Conductor

knipex wrote: »

Oh I agree, its not the entire generation and the attitude has always existed within a minority but in the last 10 to 20 years it has expended dramatically..

I am not dramatically older than you are but even i can see the change,

My parents had it far harder than me and I can only imagine how they feel..

As for my grandparents..... I remember a story from my grandmother about her, her sister and a cousin sharing a pair shoes and a dress...

We would have been considered reasonably well off as kids- but we still walked to school, across fields- often with holes in our shoes etc. As to having runners and all manner of designer gear- most of our clothes were hand-me-downs from our American cousins, that arrived in a very exciting parcel every 2-3 months. Our main source of entertainment was reading- and our forthnightly trip to the library was cause for a major celebration- and a lot of horse trading among my siblings to try to maximise our reading material between us.

I laugh often when I see how pampered today's generation are- and how they expect it is a right to have everything handed to them on a silver platter.

I know its all well and good saying- times have changed, and indeed, they have- but its not all for the better. There was nothing wrong in appreciating the little things in life- and despite times being tight- we didn't want for anything that really mattered.

There were 7 kids in our family by the way- how my parents did it- I have no idea- I've two munchkins and know how difficult it is to bring them up at times- how my parents managed with 7- I simply do not know.

I'm trying to teach my 6 and 7 year old's the value of money at the moment- and to give them their due, they have saved up what are considerable sums for them- 60 or 70 Euro each, from tooth fairy visits, birthdays and other events. Convincing them that blowing the whole lot on something that will only take their interest for 20 minutes from Smyths- is proving difficult- but they are proud of themselves- and know that if something does come along, they can buy it if they really want to- and they appreciate that they have foregone a few stupid silly things- to be in that position.

I suppose, an appreciation for the little things- is something that today's kids have lost.

My own two- adore our local library- and love their visits there- but they do have their own books too- if there is a rainy day like today.

I guess, a lot of people have lost sight of the things that really matter in today's world. Spending time together- is something that you can't put a price on- providing you're not killing one another, of course.

dudara

We are looking to buy, and as two professionals, we have good incomes. We don't want a large house, it's not needed. We would like to stay reasonably central and I accept there's a premium for that.

The major issue I have is that I don't see value in Dublin house prices. I'm coming to the conclusion that I'm going to increase my price limit in order to even find properties that match our broad criteria. I don't want to be pushed into prices that are close to my max possible mortgage, but that's where house prices seem to be going.

The_Conductor

dudara wrote: »

We are looking to buy, and as two professionals, we have good incomes. We don't want a large house, it's not needed. We would like to stay reasonably central and I accept there's a premium for that.

The major issue I have is that I don't see value in Dublin house prices. I'm coming to the conclusion that I'm going to increase my price limit in order to even find properties that match our broad criteria. I don't want to be pushed into prices that are close to my max possible mortgage, but that's where house prices seem to be going.

In all honesty- if its somewhere for you and your partner- and its somewhere you can see yourself living indefinitely- you nearly need to stop looking at 'value' and start putting a nominal price on things like convenience, access to facilities and amenities- and if you were to buy somewhere else that had better perceived 'value' how commuting would diminish your quality of life etc etc.

Having an extra hour (or two) in your day- because of where you choose to live- is worth paying significantly for- how much though- is up to you to decide what its worth to you.

I agree with your assessment that there may not be 'value' in Dublin property- but value is more to do with than simply a financial cost- its a lifestyle and so much more.

dudara

I don't disagree at all, we are choosing to stay reasonably central as we value that, hence we know we will pay more for it.

BTW - does any find that they get different results from the same saved search on the Daft app, as against the Daft website?

The_Conductor

dudara wrote: »

BTW - does any find that they get different results from the same saved search on the Daft app, as against the Daft website?

I wasn't aware of that- might be worthwhile letting the guys know- I can't see why you should get different returns (providing of course the search parameters are the same).

Starkystark

theboringfox wrote: »

Two teachers in Dublin can live where they can afford to rent or buy. Typical buying age would be early 30s. So majority of teachers would have 10 years and maybe on 50k p.a. So two teachers would be 100k gross. That means can borrow 350k so with 50k savings thats 400k home.

Two teachers with guaranteed jobs likely to get exception if wanted higher.

I think for two people with guaranteed jobs and great pensions that is a great position to be in.

But then imagine same couple living in a small country village or town and how far those wages go. Maybe they should give more to Dublin based public service workers but think that would cause uproar.

I do genuinely feel for people trying to buy in Dublin. Left it myself after 12 years to return to Cork and big part was cost. Cost of living not much cheaper but housing cost way lower.

Oh how I wish I was one of THOSE teachers.....

guile4582

Samuel T. Cogley wrote: »

I'm not sure it's ever been put that well by anyone - this is a huge issue. It's not that many can't afford a house, it's that they can't afford a 4 bed semi on the Howth Road or in a some leafy SoCo Dublin suburb.

That's not to detract from the people that genuinely can't buy but even semi-skilled workers like myself have options.

are you single? (for the record thats not a come on )

The_Conductor

Starkystark wrote: »

Oh how I wish I was one of THOSE teachers.....

There are an awful lot of teachers who wish they were on 50k, after 10 years service- and eligible for a 350k mortgage, and have a 50k lumpsum tucked away to pay for their deposit. In fact- I'll expand this- and state, with a large degree of confidence- that you will be searching long and hard to find two public sector employees with 10 years under their belts, on 100k between them, with a 50k lumpsum tucked away somewhere.

People seem to have an incredibly rosy idea of how the average public sector employees are doing. Its not just teachers- its Gardaí, or civil servants, or nurses etc etc- and if they are part of a couple- they may or may not have children- and associated costs- the same as anyone else.

Browney7

The_Conductor wrote: »

There are an awful lot of teachers who wish they were on 50k, after 10 years service- and eligible for a 350k mortgage, and have a 50k lumpsum tucked away to pay for their deposit. In fact- I'll expand this- and state, with a large degree of confidence- that you will be searching long and hard to find two public sector employees with 10 years under their belts, on 100k between them, with a 50k lumpsum tucked away somewhere.

People seem to have an incredibly rosy idea of how the average public sector employees are doing. Its not just teachers- its Gardaí, or civil servants, or nurses etc etc- and if they are part of a couple- they may or may not have children- and associated costs- the same as anyone else.

In fairness, 2 primary teachers with 10 years service would be on between 45k and 50k gross each with honours degree allowances so not far off. What that converts to in net terms would of course differ to a non public sector due to PRD (pension levy) and other pension deductions. There have been delays to receiving increments though so it's likely 10 years service doesn't correspond with point ten on the scale.

The 50k lump-sum is obviously down to individual circumstances so can't say people on these salaries ought to have it stashed away.

mloc123

dudara wrote: »

We are looking to buy, and as two professionals, we have good incomes. We don't want a large house, it's not needed. We would like to stay reasonably central and I accept there's a premium for that.

The major issue I have is that I don't see value in Dublin house prices. I'm coming to the conclusion that I'm going to increase my price limit in order to even find properties that match our broad criteria. I don't want to be pushed into prices that are close to my max possible mortgage, but that's where house prices seem to be going.

I think that people are too concerned about what a house is worth when buying a home. My criteria for buying a home (not an investment property) would be:

Do we like the house
Do we like the area
Has it all or most of the criteria we are after
Can we afford the mortgage payments on it while still living comfortably.

If you are buying a home and plan to live there for 15-20-30 years... are you really concerned about how much it will be worth in 5 years?

deathtocaptcha

The problem is not that property prices are high / going higher. It's that people just assume the only solution is to buy now before they get priced out of the market.

As a result, people end up buying homes they don't want in areas they don't like, simply because they were within budget. And they then give themselves a pat on the back getting good deals on mortgages and fooling themselves in to thinking they've gotten on to some sort of ladder to financial success / freedom now that they 'own their own home'.

Graham

deathtocaptcha wrote: »

The problem is not that property prices are high / going higher. It's that people just assume the only solution is to buy now before they get priced out of the market.

As a result, people end up buying homes they don't want in areas they don't like, simply because they were within budget. And they then give themselves a pat on the back getting good deals on mortgages and fooling themselves in to thinking they've gotten on to some sort of ladder to financial success / freedom now that they 'own their own home'.

So people are buying houses that they can afford (all be it with some compromises) when what they should actually be doing is...............?

The_Conductor

<snip>

While its not very PC to say this- the CSO agree with you- the community most shielded and least affected by the boom and bust- in particular the 10 years of austerity- have been our retirees.

Politicians court them- as they have the time to make mischief- and are virtually guaranteed to vote.

It is this selfsame demographic in the UK who got Brexit over the line- at immense cost to the youth in society- who have learnt a harsh lesson- and will remember not to make the mistake of not voting, ever again.

The youth of Ireland have not had a commensurate wake-up call (thus far)- and the struggling workers (or squeezed middle as some pundits like to call them)- don't have a coherent voice to make their needs heard.

Particularly in an Irish context, moreso than elsewhere, the squeaky wheel gets oiled.

guile4582

The_Conductor wrote: »

While its not very PC to say this- the CSO agree with you- the community most shielded and least affected by the boom and bust- in particular the 10 years of austerity- have been our retirees.

Politicians court them- as they have the time to make mischief- and are virtually guaranteed to vote.

It is this selfsame demographic in the UK who got Brexit over the line- at immense cost to the youth in society- who have learnt a harsh lesson- and will remember not to make the mistake of not voting, ever again.

The youth of Ireland have not had a commensurate wake-up call (thus far)- and the struggling workers (or squeezed middle as some pundits like to call them)- don't have a coherent voice to make their needs heard.

Particularly in an Irish context, moreso than elsewhere, the squeaky wheel gets oiled.

maybe it's beginning..i went to college in early 2000s, now places weren't palaces but we also weren't as precious

https://www.buzz.ie/news/students-uncover-shocking-dublin-rental-accommodation-snapchat-246343

mloc123

guile4582 wrote: »

maybe it's beginning..i went to college in early 2000s, now places weren't palaces but we also weren't as precious

https://www.buzz.ie/news/students-uncover-shocking-dublin-rental-accommodation-snapchat-246343

Hahaha, precious is right... I was in college early 2000s too and lived in far worse... we didn't care tho.

mloc123

deathtocaptcha wrote: »

The problem is not that property prices are high / going higher. It's that people just assume the only solution is to buy now before they get priced out of the market.

As a result, people end up buying homes they don't want in areas they don't like, simply because they were within budget. And they then give themselves a pat on the back getting good deals on mortgages and fooling themselves in to thinking they've gotten on to some sort of ladder to financial success / freedom now that they 'own their own home'.

I dunno if people will really commit to a 30yr(?) mortgage on a house they don't want. Areas... well that is a separate issue, there seems to be an opinion from some people that people have a right to afford a house in certain areas.. and when this is not the case, they then blame it on the crazy market etc.. Certain areas are expensive, always have been.

Bob24

knipex wrote: »

Oh I agree, its not the entire generation and the attitude has always existed within a minority but in the last 10 to 20 years it has expended dramatically..

I am not dramatically older than you are but even i can see the change,

My parents had it far harder than me and I can only imagine how they feel..

As for my grandparents..... I remember a story from my grandmother about her, her sister and a cousin sharing a pair shoes and a dress...

While I agree there is an increasing tendency to expect being spoon fed and being entitled to a certain lifestyle, I'll outline one more time that there are also structural issues in the way capitalism has evolved which do indeed make it harder for people without capital (i.e. this disproportionately impacts the young).

To me the current fashion within the 20-35 something to forget the work and efforts of previous generations is as short-sighted as the refusal of some of the older folks to acknowledge that while life was not necessarily as comfortable, macro economic conditions where indeed much more favourable to the average worker during their time than they are now.

My grand parents in another European country were both factory workers and they managed to buy a decent house and raise a family of 4 kids while building up a ok level of savings, all that at a time when they couldn't rely much on social welfare benefits and most of the money was the one they made themselves. Of course to nowdays standards their lifestyle was very frugal, but even being frugal I am not sure it would be achievable for a couple of low-skilled workers today.

knipex

<snip>

People paid PRSI for decades (and I still am) to the state and in return were assured a contributory old age pension. There was a similar, all be it lesser amount non contributory old age pension.

The problem is that instead of investing that money in an attempt to generate a return, the state used that money to fund day today spending and used current income to fund not just the old age pension but all public sector pensions.

Anyone who had a private pension (which is a very percentage of workers) did there math based on also having an old age pension.

You remove that and people will literally starve..

Graham

Mod Note

Please take the political discussion to the appropriate forum.

0gac3yjefb5sv7

gaius c wrote: »

"kids these days have it too easy" said the generation that could buy a house on a wage from unskilled work at age 21

This exactly! Also for those mentioning the two teacher mortgage example, why should you have be in a relationship to afford a home? Those who work hard and get a good education should be able to comfortably afford to buy relatively close to where they work.

Cyrus

Pheonix10 wrote: »

This exactly! Also for those mentioning the two teacher mortgage example, why should you have be in a relationship to afford a home? Those who work hard and get a good education should be able to comfortably afford to buy relatively close to where they work.

No they shouldn't

Take teachers , they get paid the same everywhere hows a utopian like deal like that going to work in desirable areas of large cities

Starkystark

The_Conductor wrote: »

There are an awful lot of teachers who wish they were on 50k, after 10 years service- and eligible for a 350k mortgage, and have a 50k lumpsum tucked away to pay for their deposit. In fact- I'll expand this- and state, with a large degree of confidence- that you will be searching long and hard to find two public sector employees with 10 years under their belts, on 100k between them, with a 50k lumpsum tucked away somewhere.

People seem to have an incredibly rosy idea of how the average public sector employees are doing. Its not just teachers- its Gardaí, or civil servants, or nurses etc etc- and if they are part of a couple- they may or may not have children- and associated costs- the same as anyone else.

That's exactly it. I hate that rosy idea of teachers and the public sector. What about the majority of teachers that are on lower pay scale, get no allowances, and have absolutely no job security and have no choice but live in the most expensive areas for rent because it's the only place they'll get work.

0gac3yjefb5sv7

Cyrus wrote: »

No they shouldn't

Take teachers , they get paid the same everywhere hows a utopian like deal like that going to work in desirable areas of large cities

Why should you have to be in a relationship to get a house? You shouldn't have to get married to be able to afford a average home within a short distance from work. Not a whole lot of expectation really, this should be the minimum.

OwlsZat

Older people and the you don't know how good you got it argument, disappeared the moment they decided they'd rather keep their new found wealth and saddle future generations with their debt instead.