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Increase in population renting... ticking time bomb?

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    #422
    Wanderer78
    Registered Users Posts: 29,421 ✭✭✭✭Wanderer78


    Augeo wrote:
    What do you mean by its 'velocity'?


    It's a term used by some economic commentators of which I don't truly understand, just thought you d have some insight into the use of it?


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    #423
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Wanderer78 wrote: »
    It's a term used by some economic commentators of which I don't truly understand, just thought you d have some insight into the use of it?

    If you don't understand the question is there any point in asking it?
    I've never seen the term used in a financial context.


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    #424
    Wanderer78
    Registered Users Posts: 29,421 ✭✭✭✭Wanderer78


    Augeo wrote: »
    If you don't understand the question is there any point in asking it?
    I've never seen the term used in a financial context.

    how does one begin to understand if they never ask questions?

    ive heard jim rickards and steve keen use is, still dont really understand it to be honest, but maybe another user can explain it to both of us. thank you


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    #425
    TheQuietFella
    Closed Accounts Posts: 1,857 ✭✭✭TheQuietFella


    I've four empty rooms! I could make a killing if I was allowed! :mad:


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    #426
    tom1ie
    Registered Users Posts: 10,478 ✭✭✭✭tom1ie


    TheQuietFella wrote: »
    I've four empty rooms! I could make a killing if I was allowed! :mad:

    Why aren’t ya allowed? €14000 a year tax free.


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    #427
    TheQuietFella
    Closed Accounts Posts: 1,857 ✭✭✭TheQuietFella


    tom1ie wrote: »
    Why aren’t ya allowed? €14000 a year tax free.

    The wife wouldn't be happy sharing the house!!!


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    #428
    AndrewJRenko
    Registered Users Posts: 28,998 ✭✭✭✭AndrewJRenko


    ELM327 wrote: »
    This is, for the most part, a rational discussion about economics.
    Do you go up to randomers and tell them what you post on boards?
    It is a pretty good measure of the lack of practicality and realism in your proposals if you're not prepared to stand up for them in the real world.


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    #429
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Wanderer78 wrote: »
    how does one begin to understand if they never ask questions?

    ive heard jim rickards and steve keen use is, still dont really understand it to be honest, but maybe another user can explain it to both of us. thank you

    You should ask in the economics forum.


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    #430
    ELM327
    Registered Users Posts: 21,990 ✭✭✭✭ELM327


    AndrewJRenko wrote: »
    It is a pretty good measure of the lack of practicality and realism in your proposals if you're not prepared to stand up for them in the real world.
    Do you defend everything you think, unprovoked and unrequested, to randomers?
    Do you suggest I should walk up to everyone in a worse job than myself and tell them how wrong they are, and everyone in a job better than mine how great they are? What do I do if I don't know how much someone is earning, do I ask? How do I make allowances for deferred income for future earnings (eg devilling)


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    #431
    GingerLily
    Registered Users Posts: 4,767 ✭✭✭GingerLily


    Wanderer78 wrote: »
    does it harm the money supply by slowing its 'velocity'?

    How can anyone engage with you seriously when you don't know what you'd talking about?

    You're obviously trying to throw people by using terms you don't think they'll understand, but problem is, you don't understand them either.

    Its nonsense - all nonsense


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    #432
    Wanderer78
    Registered Users Posts: 29,421 ✭✭✭✭Wanderer78


    GingerLily wrote: »
    How can anyone engage with you seriously when you don't know what you'd talking about?

    You're obviously trying to throw people by using terms you don't think they'll understand, but problem is, you don't understand them either.

    Its nonsense - all nonsense

    thanks, thats very helpful! regarding the topic in hand, what would you like to add? does anybody really know whats going on regarding these issues, and does anybody truly know what to do? once again, if you have an issue with my comments, maybe its a good idea you just use boards ignore function, as it seems like you seemed to be getting worked up over a complete strangers comments on the internets. thank you

    what parts of my comments do you find 'nonsense', as i will try help to clarify?


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    #433
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Money- and its supply in an economy- is broken down into various categories- which interact with and affect one another.

    Classically- this is broken down roughly as follows:

    M0 - Actual cash- that is cold hard cash, sloshing around
    M1 - Short term deposits in banks that can be called on immediately without notice
    M2 - Notice deposits (such as 90 day notice accounts etc- they used to be popular, as typically they paid a premium in interest over demand accounts)
    M3 - is also known as a parity asset- and can include debts such as short term loans that can be called with minimal/no notice by a lender.
    etc

    Typically the Central Bank will issue periodic reports on M0 and M1 (and in the US the M0 and M1 figures feature prominently in Fed notes, and get extensive coverage on the likes of CNBC etc).

    The changes in the various money supplies affect both one another- and the economy in general.
    For example- M2 is highly correlated with inflation in the economy. M3- can be used as a mechanism to slow down lending (for example by changing reserve requirements). etc etc

    There isn't really any point in discussing the velocity of supply of the different components of liquidity in the economy- and how they interact with one another- as it would reasonably be a university lecture for an economics student- and if you honestly want to discuss them in detail- please take it to the economics forum- which is a far more pertinent venue for such a discussion.


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    #434
    Wanderer78
    Registered Users Posts: 29,421 ✭✭✭✭Wanderer78


    The_Conductor wrote:
    There isn't really any point in discussing the velocity of supply of the different components of liquidity in the economy- and how they interact with one another- as it would reasonably be a university lecture for an economics student- and if you honestly want to discuss them in detail- please take it to the economics forum- which is a far more pertinent venue for such a discussion.


    Would the discussion of how the creation of M3 not be an important part of topics such as housing?


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    #435
    The Student
    Registered Users Posts: 1,262 ✭✭✭The Student


    Wanderer78 wrote: »
    Would the discussion of how the creation of M3 not be an important part of topics such as housing?

    Your clutching at straws now!


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    #436
    tom1ie
    Registered Users Posts: 10,478 ✭✭✭✭tom1ie


    We are getting very technical here! I think the important thing to remember is the more debt someone takes on the less disposable income they have. If the interest rates on that debt rise people will get in trouble and banks will not be able to recoup that loaned money as we have a broken repossession system, thus the bank will loose.
    Now, when I say the bank will loose, it won’t really be the bank it’ll be the taxpayer via higher or more taxes to plug the hole in the banks finances.
    So if like me you are paying your debt off as quickly as possible, potentially if things go south for people with large mortgages, I’ll end up plugging the banks finances anyway through higher taxes.
    That, in a nutshell is why I think higher amounts of debt simply don’t work in Ireland- the bank can’t really loose.

    It’s not that I have some sort of moral compass regarding affordable housing ( NOT social housing) it’s the fact that unltimatley im looking out for myself and my family.


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    #437
    Arthur Daley
    Registered Users Posts: 4,464 ✭✭✭Arthur Daley


    tom1ie wrote: »
    That, in a nutshell is why I think higher amounts of debt simply don’t work in Ireland- the bank can’t really loose.

    It’s not that I have some sort of moral compass regarding affordable housing ( NOT social housing) it’s the fact that unltimatley im looking out for myself and my family.

    You are not wrong. Prior to the last 20 years of madness, most of us signed up to a system that taxed us all, so the genuinely weak/old/marginalised could benefit from public funds. It wasn't intended to keep people in mansions and reward gaming of the system.

    For a country supposedly in a recovery, there are still an awful lot of people who cannot pay the mortgages they signed themselves up for.


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    #438
    DebDynamite
    Registered Users Posts: 2,666 ✭✭✭DebDynamite


    Another thing which hasn’t been mentioned, is I don’t think a lot of young people don’t have the ability to save now. Out of my immediate colleagues, in the small office I work in, myself and another woman are the oldest and every year the younger ones are off on about two holidays per year. You see young ones with the the latest phones, hair extensions, lip fillers, nails always manicured, going out every week, showing their amazing life in Instagram, etc. myself and my colleague always ask where did we go wrong?! Of course, we have mortgages to pay and stuff to buy for the house, etc.

    We hear so much now that so many young Dublin people can’t afford to move out, so are living at home with the parents. I’d like to know how many of these even have any savings, and should the house prices go back to near bottom levels, would they have even near a deposit to get a mortgage?

    Now, I’m only in my mid 30s, but sacrificed many things to be able to own my own home 4 years ago (with my (ex) partner) and I am by no means a high earner (nor was he) plus we’d both been paying for rent in Dublin since the age of 17.


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    #439
    tom1ie
    Registered Users Posts: 10,478 ✭✭✭✭tom1ie


    DebDynamite wrote: »
    Another thing which hasn’t been mentioned, is I don’t think a lot of young people don’t have the ability to save now. Out of my immediate colleagues, in the small office I work in, myself and another woman are the oldest and every year the younger ones are off on about two holidays per year. You see young ones with the the latest phones, hair extensions, lip fillers, nails always manicured, going out every week, showing their amazing life in Instagram, etc. myself and my colleague always ask where did we go wrong?! Of course, we have mortgages to pay and stuff to buy for the house, etc.

    We hear so much now that so many young Dublin people can’t afford to move out, so are living at home with the parents. I’d like to know how many of these even have any savings, and should the house prices go back to near bottom levels, would they have even near a deposit to get a mortgage?

    Now, I’m only in my mid 30s, but sacrificed many things to be able to own my own home 4 years ago (with my (ex) partner) and I am by no means a high earner (nor was he) plus we’d both been paying for rent in Dublin since the age of 17.

    This is true. Young People have no inclination to save now. Remember the Aussie economist guy who suggested giving up coffee and smashed avacado to save a deposit, he was crucified in the press.
    When I moved into my first property I slept in a sleeping bag on concrete floors s we had fcuk all money for furniture.


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    #440
    Neon_Lights
    Registered Users Posts: 1,426 ✭✭✭Neon_Lights


    doolox wrote: »
    I saw a documentary on this subject concerning retirees in Germany who are finding it difficult to maintain rental payments on their homes because of inadequate pensions in the face of rising rents.

    A similar thing could happen here. The only solution for many may be to move to cheaper locations away from the job-rich East towards the job starved parts of the country where rents are cheaper but then you lose access to services, public transport etc which are essential to the daily lives of many retirees.

    I am aware of many retirees who capitalised on their expensive houses in the East and moved to places like Longford or Roscommon and they were OK as long as one of the couple could drive. As soon as both became too infirm to drive the trouble began. Lives become very difficult when you can no longer drive.

    One gent was hit bit a speeding motorist on a country lane and this incident shortened his life in the final analysis.

    There is also the social dislocation such moves can have on people but the availability of free transport alleviates this somewhat as long as the old people can get a house near public transport. Places like Moate, Ballyhaunis etc on Expressway bus routes or mainline train routes would appear to be the best.

    I know of several people who arrange regular reunions from remote rural locations to inner city Dublin to meet up with old friends from old neighbourhoods that they have been priced out of. It seems now that only high-paid workers in shared accommodation can afford to live in Dublin.

    And that's why I moved to Melbourne...


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    #441
    Neon_Lights
    Registered Users Posts: 1,426 ✭✭✭Neon_Lights


    TheQuietFella wrote: »
    tom1ie wrote: »
    Why aren’t ya allowed? €14000 a year tax free.

    The wife wouldn't be happy sharing the house!!!

    Stop being a quiet fella and tell your aul windpipe to swallow her pride and embrace new overlord, Johnny Euro


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    #442
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    DebDynamite wrote: »
    Another thing which hasn’t been mentioned, is I don’t think a lot of young people don’t have the ability to save now. Out of my immediate colleagues, in the small office I work in, myself and another woman are the oldest and every year the younger ones are off on about two holidays per year. You see young ones with the the latest phones, hair extensions, lip fillers, nails always manicured, going out every week, showing their amazing life in Instagram, etc. myself and my colleague always ask where did we go wrong?! Of course, we have mortgages to pay and stuff to buy for the house, etc.

    We hear so much now that so many young Dublin people can’t afford to move out, so are living at home with the parents. I’d like to know how many of these even have any savings, and should the house prices go back to near bottom levels, would they have even near a deposit to get a mortgage?

    Now, I’m only in my mid 30s, but sacrificed many things to be able to own my own home 4 years ago (with my (ex) partner) and I am by no means a high earner (nor was he) plus we’d both been paying for rent in Dublin since the age of 17.

    You could however argue that if home ownership is so far out of reach, what is the point of trying to save for a deposit? Travel is cheaper than ever and our holidays give us something to look forward to. Takeaway coffee every day costs about €600 a year, that's not going to make a massive difference when it comes to qualifying for a mortgage.

    I have enough saved for a deposit but the problem is getting a mortgage for anything half decent on my salary. I'm not looking for a big house in a fancy area, but even the most basic housing has gone through the roof. The market is insane. And no, I'm not going to move to Roscommon because where are the jobs there?


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    #443
    Arthur Daley
    Registered Users Posts: 4,464 ✭✭✭Arthur Daley


    Flying Fox wrote: »
    You could however argue that if home ownership is so far out of reach, what is the point of trying to save for a deposit? Travel is cheaper than ever and our holidays give us something to look forward to. Takeaway coffee every day costs about €600 a year, that's not going to make a massive difference when it comes to qualifying for a mortgage.

    I have enough saved for a deposit but the problem is getting a mortgage for anything half decent on my salary. I'm not looking for a big house in a fancy area, but even the most basic housing has gone through the roof. The market is insane. And no, I'm not going to move to Roscommon because where are the jobs there?
    Yes this kind of stuff has been said about the London market for years. If only young people could stop buying cups of coffee, and taking holidays they could afford overpriced property.

    It is a sideshow. Property is too expensive for the consumer. Usually that means prices need to fall back.


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    #444
    DebDynamite
    Registered Users Posts: 2,666 ✭✭✭DebDynamite


    Flying Fox wrote: »
    You could however argue that if home ownership is so far out of reach, what is the point of trying to save for a deposit? Travel is cheaper than ever and our holidays give us something to look forward to. Takeaway coffee every day costs about €600 a year, that's not going to make a massive difference when it comes to qualifying for a mortgage.

    I have enough saved for a deposit but the problem is getting a mortgage for anything half decent on my salary. I'm not looking for a big house in a fancy area, but even the most basic housing has gone through the roof. The market is insane. And no, I'm not going to move to Roscommon because where are the jobs there?

    But people are saying there'll be a crash in a few years time. Maybe now would be a good time to sacrifice a few things and have a deposit in place should house prices drop again. Everything is cyclical.

    Compared to even 10 years ago, there is more things to be spending money on for young people - phones, mobile data, Netflix, all the different festivals, travelling, nail, lips fillers (seriously!)... Maybe they place more importance now on enjoying life for the now while they're young and paying rent, than giving them up to save for a deposit


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    #445
    tom1ie
    Registered Users Posts: 10,478 ✭✭✭✭tom1ie


    DebDynamite wrote: »
    But people are saying there'll be a crash in a few years time. Maybe now would be a good time to sacrifice a few things and have a deposit in place should house prices drop again. Everything is cyclical.

    Compared to even 10 years ago, there is more things to be spending money on for young people - phones, mobile data, Netflix, all the different festivals, travelling, nail, lips fillers (seriously!)... Maybe they place more importance now on enjoying life for the now while there're young and paying rent, than giving them up to save for a deposit

    That’s fine as long as they don’t start pissing and moaning that it’s not fair they can’t afford a roof over there heads.
    I advocate affordable housing, but sacrifices still have to be made by people to get a house. Having lip fillers and the latest phone are not life’s necessities.


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    #446
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    DebDynamite wrote: »
    But people are saying there'll be a crash in a few years time. Maybe now would be a good time to sacrifice a few things and have a deposit in place should house prices drop again. Everything is cyclical.

    Compared to even 10 years ago, there is more things to be spending money on for young people - phones, mobile data, Netflix, all the different festivals, travelling, nail, lips fillers (seriously!)... Maybe they place more importance now on enjoying life for the now while there're young and paying rent, than giving them up to save for a deposit

    Equally there are people saying there won't be a crash, demand is high and supply is strangled, we don't have the credit bubble we had the last time.

    Of course it's sensible to save, but I do think the argument of "if only they'd stop buying phones and going on holidays they could afford a house" is a red herring. It is possible to save a reasonable amount of your salary, still enjoy some decent standard of living, and be priced out of a market that is entirely unaffordable (and still would be even if the phones and holidays were sacrificed).

    Like I said, I made the sacrifices and saved a deposit and I still can't afford to buy. The problem is that house prices have soared while wages have been stagnant. Phones and holidays are a drop in the ocean when you look at the bigger picture.


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    #447
    DebDynamite
    Registered Users Posts: 2,666 ✭✭✭DebDynamite


    Flying Fox wrote: »
    Equally there are people saying there won't be a crash, demand is high and supply is strangled, we don't have the credit bubble we had the last time.

    Of course it's sensible to save, but I do think the argument of "if only they'd stop buying phones and going on holidays they could afford a house" is a red herring. It is possible to save a reasonable amount of your salary, still enjoy some decent standard of living, and be priced out of a market that is entirely unaffordable (and still would be even if the phones and holidays were sacrificed).

    Like I said, I made the sacrifices and saved a deposit and I still can't afford to buy. The problem is that house prices have soared while wages have been stagnant. Phones and holidays are a drop in the ocean when you look at the bigger picture.


    If you're a single person though, that will make it much harder. Once women started working, and house prices rose to reflect this, it was always hard as a single person to own their own place.

    If you're a young couple with savings and a decent enough salary, you can afford a house. It may not be in the part of Dublin you want it to be, or you may need to move to the commuter belt, or, buy an apartment. This has been the way it's been in Dublin for the past 15 years (apart from when we had the worst crash in history).


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    #448
    The Student
    Registered Users Posts: 1,262 ✭✭✭The Student


    Arthur Daley wrote: »
    Yes this kind of stuff has been said about the London market for years. If only young people could stop buying cups of coffee, and taking holidays they could afford overpriced property.

    It is a sideshow. Property is too expensive for the consumer. Usually that means prices need to fall back.

    I would have to disagree that prices will fall. In any market if prices fall supplies don't increase further pushing down prices. Why would a property developer build houses if prices are going down.

    it would be easier to find alternative uses for the land eg commercial rather than residential use.

    I suspect you will see a leveling off of prices due to the income multiples of the Central Bank and you will then see small price increases thereafter.

    I understand that there has been an influx of international money (notably Chinese investors) who have been investing in Ireland (following the Brexit Decision).

    These investors will drive up the prices of the high end properties which will push those who in the past would have purchased these properties into the next bracket down thereby increasing there prices and this effect will trickle down.

    Unfortunately I suspect you will eventually see the "gentrification" of a lot of areas in Dublin, Cork, Galway etc whereby those who would not have in the past purchased in certain areas are now left with little choice as its all they can afford.


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    #449
    The Student
    Registered Users Posts: 1,262 ✭✭✭The Student


    Flying Fox wrote: »
    Equally there are people saying there won't be a crash, demand is high and supply is strangled, we don't have the credit bubble we had the last time.

    Of course it's sensible to save, but I do think the argument of "if only they'd stop buying phones and going on holidays they could afford a house" is a red herring. It is possible to save a reasonable amount of your salary, still enjoy some decent standard of living, and be priced out of a market that is entirely unaffordable (and still would be even if the phones and holidays were sacrificed).

    Like I said, I made the sacrifices and saved a deposit and I still can't afford to buy. The problem is that house prices have soared while wages have been stagnant. Phones and holidays are a drop in the ocean when you look at the bigger picture.

    The more a person has saved the less they need in a mortgage and the less they need to repay in interest etc.

    Holiday's, mobile phones, Netflix, cars, designer cloths' etc all add up. Even a conservative figure of €2k (€40 a week) per year for all of the above would equate to €10k after 5 yrs.

    This €10k would result in a lower loan requirement, a possible lower interest rate as your LTV would fall and therefore reduced repayments.

    While I commend you on your savings to date perhaps you need to revisit those areas you want to live in and look at others you can afford to live in.

    We have all had to make compromises in life be it where we live or work but that is part and parcel of life.


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    #450
    Arthur Daley
    Registered Users Posts: 4,464 ✭✭✭Arthur Daley


    The Student wrote: »
    I would have to disagree that prices will fall. In any market if prices fall supplies don't increase further pushing down prices. Why would a property developer build houses if prices are going down.

    Well if you keep asking high prices and the punter says enough!I can't afford this...then eventually you realise that prices are too high and they need to fall to clear the market.

    That is what this thread and others are about. Property developers and government may deny there is an issue, but that doesn't get away from the fact that there is a very real issue of affordability out there.


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    #451
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Flying Fox wrote: »
    ..........

    Like I said, I made the sacrifices and saved a deposit and I still can't afford to buy. The problem is that house prices have soared while wages have been stagnant. Phones and holidays are a drop in the ocean when you look at the bigger picture.

    So what can you do to improve your wages?
    Change jobs, upskill etc etc.
    Thousands do it.


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