Property Market 2019

JJJackal

AlmightyCushion wrote: »

2000 net a month works out about 28,000 a year. Under current mortgage rules if you have 2 people on that money that would let you borrow 196,000. If you go by what was suggested in that article then they would be able to service a 1200 Euro a month mortgage. At 3% over 30 years that's nearly 300,000 or about 5 times multiplier.

That doesn't seem unmanageable? Although your probably pretty stretched at 30%. To be fair, I think if this method was to be implemented you would need to use current interest rate plus X for safety (instead of 3% stress test them at 4.5%, if the rate you were being offered was lower stress test at that; in which case you could only borrow 240,000)

lordlame

As pointed out previously, if the central bank changed the rules the prices of houses would rise over night.

How any one cannot understand this is baffling.

Jaster Rogue

lordlame wrote: »

As pointed out previously, if the central bank changed the rules the prices of houses would rise over night.

How any one cannot understand this is baffling.

Not necessarily if there's an oversupply which is unaffordable which is happening semi detached family homes in Dublin at the moment.
I disagree with changing the income multiples, but kinda see where they're coming from.
It's a deadlock situation at the moment - family homes in urban areas have reached unaffordable levels and aren't selling. Normally the price would fall to meet what folks can afford, but with the cost of building a house so high right now (labour, construction materials, taxes, land, etc) developers can't drop the price and still make a profit.
There's a whole generation of people stuck in the rental trap with no means of escape, where mortgaging the same property would result in a vastly cheaper monthly repayment - but can't get that mortgage due to income multiple and deposit rules.

Wexforllion

Jaster Rogue wrote: »

Not necessarily if there's an oversupply which is unaffordable which is happening semi detached family homes in Dublin at the moment.
I disagree with changing the income multiples, but kinda see where they're coming from.
It's a deadlock situation at the moment - family homes in urban areas have reached unaffordable levels and aren't selling. Normally the price would fall to meet what folks can afford, but with the cost of building a house so high right now (labour, construction materials, taxes, land, etc) developers can't drop the price and still make a profit.
There's a whole generation of people stuck in the rental trap with no means of escape, where mortgaging the same property would result in a vastly cheaper monthly repayment - but can't get that mortgage due to income multiple and deposit rules.

Raising the deposit rules isnt a solution, its a quick fix, papering over the problem and only making situation worse in the long term.

Its been shown, all that happens when you increase rules is prices go up.
Of course that's the real reason those with invested interest are in favor. I refuse to believe anyone with a brain cant see outcome.

Graham

I'm not what you're suggesting Wexforllion.

Do you think removing/relaxing the deposit rules will cause prices to fall?

Wildly Boaring

Jaster Rogue wrote: »

Not necessarily if there's an oversupply which is unaffordable which is happening semi detached family homes in Dublin at the moment.
I disagree with changing the income multiples, but kinda see where they're coming from.
It's a deadlock situation at the moment - family homes in urban areas have reached unaffordable levels and aren't selling. Normally the price would fall to meet what folks can afford, but with the cost of building a house so high right now (labour, construction materials, taxes, land, etc) developers can't drop the price and still make a profit.
There's a whole generation of people stuck in the rental trap with no means of escape, where mortgaging the same property would result in a vastly cheaper monthly repayment - but can't get that mortgage due to income multiple and deposit rules.

No construction company or developer is a charity.

They research and do their sums before building. There is profit then they will build. There isn't and they won't.

Where are these masses of unsold 3 bed semi d commuter houses? I was in a few estates in bettystown, portrane, skerries and dunsaughlin last month. Every semi d sold. Detached still available.

I'm repeating but I think worth doing so. Relax the rules. Prices will just rise in reflection.

There is no stalemate. There are some who will have to lower their expectations, wait or commute further. Or do what we did for last few years.... relocate to cork / limerick for a while

alwald

Wildly Boaring wrote: »

Where are these masses of unsold 3 bed semi d commuter houses? I was in a few estates in bettystown, portrane, skerries and dunsaughlin last month. Every semi d sold. Detached still available.

That's a big statement...just check Daft and you will see that many estates with 3 bed semi are unsold in the commuter towns.

ZX7R

WAL1992 wrote: »

Was at a viewing in a new development last weekend in Meath and the agent had noted a recent dip in interest in the past few weeks. Expected there to be a few interested parties but was only myself and two others and I was only there to get a feel for the area so felt bad . The agent noted Brexit as an impact due to the uncertainty attached to it

Depends on what agent you talk to, some reckon that there will be a influx of xpats British and eastern Europeans into Ireland after Brit exit, most seem to be waiting to see how it pans out and are willing to cut there losses in Britten and start fresh here

Wildly Boaring

alwald wrote: »

That's a big statement...just check Daft and you will see that many estates with 3 bed semi are unsold in the commuter towns.

I was in 7 estates in those towns. All the semi ds were sold. Not so much a big statement as my experience 3 weekends ago.

I'm sure there are plenty houses for sale on Daft. But for instance 2 of the estates dunsaughlin and bettystown selling houses hadn't even got show houses yet! They do now in last 2 weeks.

There will be a tipping point in prices. This could well be it. If we (and I mean the central bank) can hold firm on the rules, maybe we can sort our housing market out.

Huge part of new house build is land costs. People are sitting on land as it appreciates in value. Regulate the house prices and stop.this crap. Another part is labour costs. These will fall if some builders stop building.

If the central bank capitulate and up the ratio, prices will just rise until some sort of minor worldwide blip then plummet and we'll be back in 2009 with our tail between our legs.

We need to be protected from ourselves.

JJJackal

Wildly Boaring wrote: »

I was in 7 estates in those towns. All the semi ds were sold. Not so much a big statement as my experience 3 weekends ago.

I'm sure there are plenty houses for sale on Daft. But for instance 2 of the estates dunsaughlin and bettystown selling houses haven't even got show houses yet!

There will be a tipping point in prices. This could well be it. If we (and I mean the central bank) can hold firm on the rules, maybe we can sort our housing market out.

Huge part of new house build is land costs. People are sitting on land as it appreciates in value. Regulate the house prices and stop.this crap. Another part is labour costs. These will fall if some builders stop building.

If the central bank capitulate and up the ratio, prices will just rise until some sort of minor worldwide blip then plummet and we'll be back in 2009 with our tail between our legs.

We need to be protected from ourselves.

I am not sure labour costs will decrease if building decreases

Have you tried to get a tradesman to do a small yet lucrative job recently?

Eric Cartman

lordlame wrote: »

As pointed out previously, if the central bank changed the rules the prices of houses would rise over night.

How any one cannot understand this is baffling.

The one sane thing we ever really did after the last time, those are the last real firewall on preventing another mega bubble occurring, we're hitting those limits now and it'll take a while for house supply to keep up with demand but long may those limits last.

As was pointed out by a survey , the biggest threat to this is however wage inflation, the stagnation in pay is beginning to shift a little and people are taking on second jobs / getting bonuses converted to salary and pulling other tricks to make that number higher to beat the limit. This is obviously unsustainable and distorts the job market and peoples ability to repay.

ZX7R

JJJackal wrote: »

I am not sure labour costs will decrease if building decreases

Have you tried to get a tradesman to do a small yet lucrative job recently?

Highly unlikely labour cost will drop, not only is there a shortage of tradesman but even bigger shortage in layman labour's.
Most labour's are been offered €18 an hour

Wildly Boaring

JJJackal wrote: »

I am not sure labour costs will decrease if building decreases

Have you tried to get a tradesman to do a small yet lucrative job recently?

It would need to decrease and everyone in the trades to know why it's happening.

ie The whole industry to know the tipping point of house prices.

Instead you just have an industry with the motto "Make hay now cus the next downturn is coming"

That's the way building has always been here. These boys would be happy out to make decent money for ever instead of huge money followed by the boat.

rookieMan

Not a popular idea but building apartments can bring down the construction cost per apartment thus making this viable for builders while still keeping the central bank limit. We just have to design liveable apartments. Not the 2 bed ones but more like 3 bed + study ones. Other countries have done it, so can we.

OwlsZat

rookieMan wrote: »

Not a popular idea but building apartments can bring down the construction cost per apartment thus making this viable for builders while still keeping the central bank limit. We just have to design liveable apartments. Not the 2 bed ones but more like 3 bed + study ones. Other countries have done it, so can we.

The hotel and short stay apartment bubble looks to have gone soft with prices down in the capital YOY after 1k rooms were added in the last 12 months. The commercial bubble appears to still be in full swing with prices here 3X Barcelona per sq ft. Can't see this one softening without a hard landing of sorts. Perhaps it will be a global downturn which ends this pricing madness. Either way there won't be any volume of apartments built for sale until this happens as the yield per sq ft is less attractive. Can't believe Government haven't given a tax reduction to developers willing to build apartments for sale. Seems a very obvious stimulus if they wanted apartment building to really take off.

hmmm

rookieMan wrote: »

Not a popular idea but building apartments can bring down the construction cost per apartment thus making this viable for builders while still keeping the central bank limit. We just have to design liveable apartments. Not the 2 bed ones but more like 3 bed + study ones. Other countries have done it, so can we.

Building bigger apartments is going to have the reverse effect. We need lots more smaller apartments if that's what are cheaper to build - I'd have loved to buy a small 1 bed when I was younger rather than house-sharing, I don't understand why people look down on them.

Zenify

Interested Observer wrote: »

Zenify wrote: »

Banks seem to have become tighter with the softening of the property market, they didn't use all their exemptions last year and they are asking a lot more questions with applicants finances (from experience). This may have a knock on effect.

Really? A few I talked to had used all theirs by the summer.

The slowdown in property only started after the summer. The banks split their exemptions over the year and this all kicked in for the second half.

"They estimate that banks may have only issued income exemptions to 11pc of first-time buyers in the second half of last year, half of what they could have issued. This means thousands of potential new buyers could be missing out on getting a mortgage."


https://m.independent.ie/business/personal-finance/property-mortgages/firsttime-buyers-lose-as-banks-fail-to-use-all-mortgage-exemptions-38211318.html

Eric Cartman

Zenify wrote: »

The slowdown in property only started after the summer. The banks split their exemptions over the year and this all kicked in for the second half.

"They estimate that banks may have only issued income exemptions to 11pc of first-time buyers in the second half of last year, half of what they could have issued. This means thousands of potential new buyers could be missing out on getting a mortgage."


https://m.independent.ie/business/personal-finance/property-mortgages/firsttime-buyers-lose-as-banks-fail-to-use-all-mortgage-exemptions-38211318.html

those exemptions were normally used for special cases (higher deposits, larger properties for people who had the means, civil servants) , theyre not going to give one to a couple who absolutely need the exemption to get a 3 bed semi for the exact 440k cap and 90% ltv that one bad tenant in the "10% social housing" requirement or a slight softening of the market would send the load upside down and the high likelihood of the second income disappearing for a while when kids come along certainly wont entice them.

coolshannagh28

Government now victims of their own success , made property ownership undesireable , discouraged working in construction , incentivised Big Money : the result is huge rents , market manipulation and a ceiling on lending and prices which will soon be exceeded by the building cost of the same house .

rookieMan

hmmm wrote: »

Building bigger apartments is going to have the reverse effect. We need lots more smaller apartments if that's what are cheaper to build - I'd have loved to buy a small 1 bed when I was younger rather than house-sharing, I don't understand why people look down on them.

I am not against 1 bed/2 bed apartments, perhaps we need more of them too. But my point is that we also need more family liveable apartments. Almost every family I have spoken to prefers 3 bhk over 2 bhk

4ensic15

rookieMan wrote: »

Not a popular idea but building apartments can bring down the construction cost per apartment thus making this viable for builders while still keeping the central bank limit. We just have to design liveable apartments. Not the 2 bed ones but more like 3 bed + study ones. Other countries have done it, so can we.

Builders have a problem funding the building of apartments. Unlike building a housing scheme, all of the apartments have to be built simultaneously and go on the market togther. Substantial quantities of materials and large labour costs must be paid for before a single apartments is sold. in a housing scheme, the houses can be built a few at a time and the proceeds of sale of the first units can be put towards paying the outlay and leaving some money to fund the next phase. the overall credit used is far lower and the risk is smaller as the build time of each section of units is faster and market developments can be dealt with.

rookieMan

4ensic15 wrote: »

Builders have a problem funding the building of apartments. Unlike building a housing scheme, all of the apartments have to be built simultaneously and go on the market togther. Substantial quantities of materials and large labour costs must be paid for before a single apartments is sold. in a housing scheme, the houses can be built a few at a time and the proceeds of sale of the first units can be put towards paying the outlay and leaving some money to fund the next phase. the overall credit used is far lower and the risk is smaller as the build time of each section of units is faster and market developments can be dealt with.

How are builders able to build large commercial offices? Isnt the situation similar? We perhaps need such big builders in housing too and a planning commission willing to give go ahead to apartment complexes.

voluntary

rookieMan wrote: »

Almost every family I have spoken to prefers 3 bhk over 2 bhk

Ask these families what would they prefer: a house with a swimming pool or without.

voluntary

4ensic15 wrote: »

Builders have a problem funding the building of apartments. Unlike building a housing scheme, all of the apartments have to be built simultaneously and go on the market togther. Substantial quantities of materials and large labour costs must be paid for before a single apartments is sold. in a housing scheme, the houses can be built a few at a time and the proceeds of sale of the first units can be put towards paying the outlay and leaving some money to fund the next phase. the overall credit used is far lower and the risk is smaller as the build time of each section of units is faster and market developments can be dealt with.

Maybe we need a new funding/sale model of apartments where buyers buy off plans and pay upfront?

ZX7R

The other big problem with building apartments is location of the land to build on not many places left in Dublin for example to build them

myshirt

voluntary wrote: »

Maybe we need a new funding/sale model of apartments where buyers buy off plans and pay upfront?

Or get a single purchaser and save all the bleedin' messin.

voluntary

myshirt wrote: »

Or get a single purchaser and save all the bleedin' messin.

Why OR and not AND to enable more projects?

ZX7R

voluntary wrote: »

Why OR and not AND to enable more projects?

Because most construction companies don't want the hassle of maintaining snagging for the period time of handing over building this period could last up to 3 years.

ECO_Mental

Article in this mornings independent...TBH I think they have been reading this thread :P

they put it down to

1. Banking lending limits
2. Banks not using thier allocation of exemptions

Dublin obviously is a different ball game and €466k average for a 3 bed semi is WAY above anywhere in the country.

https://www.independent.ie/business/personal-finance/property-mortgages/house-prices-fall-1000-a-month-as-new-homes-built-38246221.html

Wildly Boaring

So 450k plus houses are down between 2 and 3 percent in a year.

Is this not a good thing?
Houses have found their level?
Fall couple percent. Stagnate like Galway in same report etc??

Straight away Michael O Flynn on Newstalk crying. "Get rid of those pesky banking rules ASAP!!"

He did mention land prices as part of build costs. Surely a fall here is first thing needs to happen.