Property Market 2018

zl1whqvjs75cdy

Henbabani wrote: »

http://cso.ie/en/releasesandpublications/ep/p-rppi/rppi/
another increase in March.
But, at yearly pace as i understand it, we are only 1.9% increase for the first 3 months, which means we are on 8% year pace, even less because the first 6 months always the busiest.

The fact that even 8% is considered reasonable is depressing

Henbabani

donkeyoaty0099 wrote: »

The fact that even 8% is considered reasonable is depressing

true.
The market should be at 4% max per year.

adriaaaan

adriaaaan wrote: »

.........We should have been prime candidates for a big exemption (were expecting up to 4.5) but according to AIB and BOI the CB is squeezing exemption room to manoeuvre. So ended up with 3.7 times salary off a nett take-home of 6.7 k just because of a leftover limit of 3800. We were late to the party and got AIP in early April after the exemptions were used up, but that's life. We'll find somewhere. ..............

I would agree.

Banks probably consider that a couple can live comfortably on €2000/month excluding the rent and mortgage ........but they won't pencil in the €4000/month for a mortgage payment at these low interest rates we are currently enjoying.

All considered 4.5 would have been nothing more than fair tbh.

Cuddlesworth

Henbabani wrote: »

true.
The market should be at 4% max per year.

The market should match inflation. 4% year on year with zero inflation means significant increases in accommodation.

Carlos Orange

Augeo wrote: »

Banks probably consider that a couple can live comfortably on €2000/month excluding the rent and mortgage ........but they won't pencil in the €4000/month for a mortgage payment at these low interest rates we are currently enjoying.

I think the whole point is not assuming that interest rates are going to stay low forever........

Augeo

Augeo wrote: »

I would agree.

Banks probably consider that a couple can live comfortably on €2000/month excluding the rent and mortgage ........but they won't pencil in the €4000/month for a mortgage payment at these low interest rates we are currently enjoying.

All considered 4.5 would have been nothing more than fair tbh.

psinno wrote: »

I think the whole point is not assuming that interest rates are going to stay low forever........

Yes, I know, hence the bolded piece.

Some get exemptions, accepting that someone or a couple on almost €7k net borrowing 4.5 times gross income isn't at all out of the way

M.Cribben

Bob24 wrote: »

An interesting point of comparison can be to look at the same figures for last year: http://www.cso.ie/en/releasesandpublications/ep/p-rppi/rppimar2017/

The same sum of the first three months of the year for 2017 was 1.2% so this year is starting a bit stronger. Due to the lag we should keep in mind this is mostly indicative of sales getting agreed at the end of the previous year, but these figures don’t seem to indicate a slowdown for that period compared to the previous year :-/

Agreed. Property transactions have always been seasonal. Typically December/January being the slowest point and peaking in May/June. This talk of a slowdown based on anecdotal evidence is nonsense, every statistic and report is showing the opposite. There's actually an acceleration of the % rising prices.

I'm not cheerleading property by any means, in fact I believe this is a very real threat to our economy. I just think we need to be realistic that there is no slowdown happening. You can't tackle a problem and take corrective measures unless you first acknowledge it's existence. Talk of a slowdown gives the government more excuses to continue their inaction and say "look, prices are not rising as fast, our policies are working".

12.7% rise from March 2017-2018 is worrying. At that rate, house prices would double from their current values in less than 8 years.

Bubbaclaus

M.Cribben wrote: »

12.7% rise from March 2017-2018 is worrying. At that rate, house prices would double from their current values in less than 8 years.

It's actually even worse. A compounded growth rate of 12.7% results in a doubling in just under 6 years.

Bob24

Bubbaclaus wrote: »

It's actually even worse. A compounded growth rate of 12.7% results in a doubling in just under 6 years.

Yes this is the other scary part, as you explained if those 12.7% are sustained over several years they actually represent more each year in terms of absolute value of the increase. So when we see 12.7% today, in terms of absolute value it is much, much more that 12.7% would have been 6 years ago (almost double on the Dublin market as property prices have almost doubled since then).

..... I'm fairly sure that extrapolated calculation won't materialise

Bob24

Augeo wrote: »

..... I'm fairly sure that extrapolated calculation won't materialise

Indeed I doubt we can sustain 12.7% per year for another 6 years, but it is scary to think we actually almost got than in the past 6 years (at least on the Dublin market).

And as per my previous post, in absolute terms even 6% today would be almost the same as 12% were 6 years ago. I think that is scary as it means for many people even if the rate of increase was to be cut in half it would still mean prices increasing faster than they can save.

Arthur Daley

Augeo wrote: »

Banks probably consider that a couple can live comfortably on €2000/month excluding the rent and mortgage .........

Is that €1,000 a month per person? That is just above the dole. Difficult for working people to live on that for too long.

Villa05

Arthur Daley wrote:

Is that €1,000 a month per person? That is just above the dole. Difficult for working people to live on that for too long.

Probably below the dole when you consider the medical card and other side benefits. On the dole your paid extra for children with little or no childcare costs. If your working be prepared to be turned upside down to make sure your pockets are emptied

A return to normal interest rates could send us back to 2008 very quickly

Arthur Daley

Arthur Daley wrote: »

Is that €1,000 a month per person? That is just above the dole. Difficult for working people to live on that for too long.

Excluding rent and mortgage etc. (childcare too obviously)
So too people, living together, €2000 to cover food & household bills, not at all unrealistic IMO.

Cyrus

Augeo wrote: »

Excluding rent and mortgage etc. (childcare too obviously)
So too people, living together, €2000 to cover food & household bills, not at all unrealistic IMO.

its not exactly plush living either tho, although if you ask on askaboutmoney they will tell you its a kings ransom

Sleepy

Depending on your living circumstances, it can be financially ruinous for someone on unemployment benefit to actually accept a job! I remember doing the calculations* for myself and my wife (then partner) and kids when we were renting and unless a job paid over IIRC 43k, we'd have been better off on welfare than with me taking that job.

*I posted them somewhere on boards at the time if anyone wants to go searching.

Cyrus

Cyrus wrote: »

its not exactly plush living either tho, although if you ask on askaboutmoney they will tell you its a kings ransom

I 100% agree and to be fair to the banks they will expect that most won't manage away on that longterm

Arthur Daley

Augeo wrote: »

I 100% agree and to be fair to the banks they will expect that most won't manage away on that longterm

Because they anticipate pay rises? Of which there is relatively little out there. In the middle of a 'boom'.

Just trying to tease out here the nonsense scenario where people working full time practically live on a social welfare level of income while ploughing as much as possible into the mortgage. And how unsustainable that is long term. Because high house prices are not sustainable long term IMO. As proven once already by the 07-13 crash.

AlmightyCushion

Arthur Daley wrote: »

Because they anticipate pay rises? Of which there is relatively little out there. In the middle of a 'boom'.

Just trying to tease out here the nonsense scenario where people working full time practically live on a social welfare level of income while ploughing as much as possible into the mortgage. And how unsustainable that is long term. Because high house prices are not sustainable long term IMO. As proven once already by the 07-13 crash.

I agree with you, however, no one suggested that people live on the same amount as the dole and throw the rest at the mortgage. They said that a couple can live comfortably on €2,000 a month after rent/mortgage and childcare. Which I think is fair.

draiochtanois

This post has been deleted.

Villa05

AlmightyCushion wrote:

I agree with you, however, no one suggested that people live on the same amount as the dole and throw the rest at the mortgage. They said that a couple can live comfortably on €2,000 a month after rent/mortgage and childcare. Which I think is fair.

Most people get a house before children come along therefore childcare is not a factor when determining mortgage repayment capacity.

Cyrus

Villa05 wrote: »

Most people get a house before children come along therefore childcare is not a factor when determining mortgage repayment capacity.

i wouldnt agree with that statement, at least not in dublin, anyone i know had at least 1 child when buying a house (may have been moving from an apartment)

aloooof

Villa05 wrote: »

Most people get a house before children come along therefore childcare is not a factor when determining mortgage repayment capacity.

From the banks point of view, yes. However, personally, I'd rather try to determine my own repayment capacity than leave it up to the banks.

If a couple intend on having children in the years after purchasing, it would be prudent to factor this into any calculations they make.

OwlsZat

Central banks warns house prices could fall.
https://www.rte.ie/news/business/2018/0510/962529-philip-lane-on-house-prices/

Cyrus

aloooof wrote: »

From the banks point of view, yes. However, personally, I'd rather try to determine my own repayment capacity than leave it up to the banks.

If a couple intend on having children in the years after purchasing, it would be prudent to factor this into any calculations they make.

and its bloody expensive :P

Arthur Daley

Arthur Daley wrote: »

Because they anticipate pay rises? Of which there is relatively little out there. In the middle of a 'boom'.

Just trying to tease out here the nonsense scenario where people working full time practically live on a social welfare level of income while ploughing as much as possible into the mortgage. And how unsustainable that is long term. Because high house prices are not sustainable long term IMO. As proven once already by the 07-13 crash.

Well anyone hoping for an exemption to the central bank guidelines is essentially hoping for what you describe.

It's not my idea of fun but each to their own.

The bolded bit isn't quite reflective of what happened here tbh. The high house prices weren't the major problem really. Folks who couldn't afford them buying them was more the problem

MayoSalmon

draiochtanois wrote: »

This post has been deleted.

Fat Bastards:pac::pac:

Bluefoam

Hi,
I didn't read the entire thread, have just arrived back in the country... but interested to know how property is being advertised these days; as in, if it's advertised at 295,000 is it likely to go for €300,000 or like in the old days it's expected to sell for €600,000.

I'm trying to put a budget together, but having difficulty figuring out what price range I should be considering. Areas I'm interested in are inside M50, South City & County.

LirW

Bluefoam wrote: »

Hi,
I didn't read the entire thread, have just arrived back in the country... but interested to know how property is being advertised these days; as in, if it's advertised at 295,000 is it likely to go for €300,000 or like in the old days it's expected to sell for €600,000.

I'm trying to put a budget together, but having difficulty figuring out what price range I should be considering. Areas I'm interested in are inside M50, South City & County.

Your first port of call is the bank to figure out what your borrowing power is and simply go from there.

Bluefoam

LirW wrote: »

Your first port of call is the bank to figure out what your borrowing power is and simply go from there.

I know that... I know what I have saved, what I can borrow and what I can afford to repay. The bank is processing my loan & I have negotiated a short probation with my new employer. Now I need to know if I can afford a two-bed house or a one-bed apartment... The websites aren't much help as no house is the same and it's difficult to gauge the market... I just want to know if prices being pitched are achievable or whether I'm barking up the wrong tree...

I spoke to DNG in June & they were advertising houses for 325k but selling for 600k (or at least that's how they presented it to me)... I'm not interested in getting involved in that kind of bull****.