Property Market 2020

I'm on the highest pay rate in AGS, over 20 years service.
3.5 times my salary means I qualify for around 187,000 Euro. Some banks take some extras into account some don't.
So I guess I'm a well paid civil servant.

Deub

cnocbui wrote: »

No, I do expect a recession, though it's length is uncertain, but I do think the majority of people wont become unemployed or see significant loss of income, unless the government decides to use taxation to prolong the recession as long as they can, which unfortunately is probably the biggest risk.

So you expect a “small” recession. Last time, many people were impacted (job loss or loss of income) and public servant number was reduced by 10% between 2009 and 2014 with pay cuts.
Looking at the announcement made by several companies about coming job losses, I have a feeling it won’t be a short recession.

Edit: here is an article about big companies bankruptcy in May in the US: https://www.bloomberg.com/amp/news/articles/2020-05-28/big-bankruptcies-sweep-the-u-s-in-fastest-pace-since-may-2009?

Villa05

cnocbui wrote:

I was taking a wild guess that they aren't just a two year wonder and that at any given time, cash buyers likely comprise a significant percentage of the total.

Those articles show that cash buyers were pushing prices over and above the 3.5 to 4.5 income multiple at entry level housing scale,
They kind of support the theory that housing was in a bubble and prices has reached unsustainable level

Will this bubble continue or burst now that there is downward pressure on rents and a growing consensus that the new government should target social and affordable as part of an economic recovery plan

bubblypop

bubblypop wrote: »

I'm on the highest pay rate in AGS, over 20 years service.
3.5 times my salary means I qualify for around 187,000 Euro. Some banks take some extras into account some don't.
So I guess I'm a well paid civil servant.

Whats the overtime like?

Augeo

Augeo wrote: »

Whats the overtime like?

That all depends, on where you are stationed, what your personal circumstances are.
Banks don't take overtime into account.

James 007

Taylor365 wrote: »

Ahhhhhhahahahah :pac:


I take it, it comes with 0.5 of an acre site?

Yes, 0.5 acre with the house & 3 acres of woodlands all in the heart of Rathgar:rolleyes:

smurgen

bubblypop wrote: »

That all depends, on where you are stationed, what your personal circumstances are.
Banks don't take overtime into account.

That's annoying.would make sense if they could factor in an average over the year or something.

James 007

DB197840 wrote: »

The other 3 I have been viewing also myself and they are more Perrystown than Templeogue. Sure I had an estate agent trying to convince me Manor Estate was Terenure also. Lol. Not bad houses but overpriced in my opinion for the imprint they have. I’ve been looking around the Walkinstown,Kimmage and Perrystown areas since February and a lot of the houses need serious work to update. Some lovely houses but prices are still fairly high for what they are.

Thanks, I did see Perrystown, but of all my life in Dublin, I have never heard of it before. Overpriced indeed. I'd buy one for a 50% haircut, any chance I would get it:rolleyes:

smurgen

smurgen wrote: »

That's annoying.would make sense if they could factor in an average over the year or something.

every bank is different, but since the central bank rules came in, they don't count it, because it is not guaranteed.

riclad

I think there will be a fall in value of offices commercial
Property in large company's decide to allow many people
to work from home. In theory you could work from home
ten miles from the office as long as you have room for
a desk a pc and acess to fast Internet.
Having lots of people in one open plan office might not
be safe in the present covid crisis
many small shops rely on office workers to buy coffee
rolls etc will they be able to stay in business if most of their customers work from home. We are now in the era of
mass unemployment. This will probably have some effect
on house prices. Banks may tighten up the rules on mortgage lending if we are facing a 2year global
recession

mcbert

riclad wrote: »

I think there will be a fall in value of offices commercial
Property in large company's decide to allow many people
to work from home. In theory you could work from home
ten miles from the office as long as you have room for
a desk a pc and acess to fast Internet.
Having lots of people in one open plan office might not
be safe in the present covid crisis
many small shops rely on office workers to buy coffee
rolls etc will they be able to stay in business if most of their customers work from home. We are now in the era of
mass unemployment. This will probably have some effect
on house prices. Banks may tighten up the rules on mortgage lending if we are facing a 2year global
recession

Thats a nice poem, but maybe tighten up your metre a bit.

Immy

James 007 wrote: »

Thanks, I did see Perrystown, but of all my life in Dublin, I have never heard of it before. Overpriced indeed. I'd buy one for a 50% haircut, any chance I would get it:rolleyes:

These properties are not in Perrystown or even beside it. They are Wainsfort, which is 100% Terenure. Granted you are near the Templeville road which is the border between Terenure and Templeogue.

Lots of people buy these house to get into the area. They then extend them over time or trade up.

They are in a nice location with great schools and amenities around. Not brilliant for buses a short walk to get a bus into town.

Only advice I would give is go for the one with the west/south facing back garden.

eagle eye

bubblypop wrote:

Banks don't take overtime into account.

Yes they do.

eagle eye

eagle eye wrote: »

Yes they do.

Nope. Some may. Because overtime is not guaranteed they don't all take it.

The_Conductor

cunnifferous wrote: »

You also said that our 'overpaid' public servants are 'relatively wealthy'. Again what would two EO's or Nurses or Gardai in the middle of their respective payscales be able to afford on 3.5X LTI?

Allowing for the fact that they are on a defined payscale- and making a presumption that they (as a two income household) might qualify for a small income multiple exemption- it would be a reasonable enough expectation that the maximum mortgage such a family unit might qualify for- would be in the region of 300k (which is being generous and assuming they were towards the top of their payscales, rather than in the middle of them).

Also- it isn't necessarily comparing apples with apples when you compare public sector with private sector payscales in Ireland. A median public sector employee, chosen at random, in Ireland, is significantly more likely to hold a 3rd level or higher qualification, than is a comparable median private sector employee, the median employee in the public sector is now 9 years older than the median private sector employee (which is an improvement- it was 15 years in 2014), and the median public sector employee has limited upside to their incomes (overtime doesn't tend to exist and paid leave opportunities were significantly reformed in 2009/2010, particularly as it pertains to sick leave arrangements).

Pick a comparably aged and qualified worker in the public and private sector- and compare them to one another- and a lot of the perceived differences evaporate.

Note- the massive age and qualification differentials between the two sectors- are not necessarily replicated in a similar manner in other European countries.

Sure- you'll have a few new hospital consultants buying a nice house in D4/D6- however, how many new hospital consultants are there? Not very many. And there is a reason for the exodus from the sector- and how difficult it is to financially recompense the Irish workforce (in both the public and private sectors). We tax the living hell out of them- starting at artificially low levels, uniquely in an Irish context. This has been pointed out ad-infinitum by the American Chamber of Commerce- in the context of the difficulty in financially recompensing staff in the MNC sector. It doesn't matter whether its the public or the private sector in Ireland- we place an unfair tax burden on our workers, at bizarrely low income levels.

In France- fairly middle of the chart in the table quoted by Cnocbui- a median public sector employee has a higher net take home pay than does the apparently higher paid Irish public sector employee. Similarly in the private sector- a higher paid Irish employee- is actually worse off, than their lesser paid French or Spanish comparitor.

Using blunt instruments like Cnocbui's table- hides a multitude of sins- not least the irrefutable fact that despite the suggestion of the table, you're not actually comparing like with like.

The fact that Conall MacCoille saw fit to comment on it- speaks volumes.

The_Conductor

eagle eye wrote: »

Yes they do.

Most lenders have a policy of only counting headline salary certificates which state guaranteed salaries, from personnel/salary sections.

Any income over and above guaranteed salary levels or payscales- while nice and the icing on the cake, other than in exceptional circumstances, is not normally counted.

Simple rule of thumb- if its not guaranteed in writing, its not counted.

eagle eye

bubblypop wrote:

Nope. Some may. Because overtime is not guaranteed they don't all take it.

Well that's a big change from your original statement.

bubblypop

bubblypop wrote: »

every bank is different, but since the central bank rules came in, they don't count it, because it is not guaranteed.

This is my original statement, Evey bank is different but I should have said most don't count it, because perhaps there is a bank that does, I don't know it if there is.


Not really a big change

Cuddlesworth

The_Conductor wrote: »

Most lenders have a policy of only counting headline salary certificates which state guaranteed salaries, from personnel/salary sections.

Any income over and above guaranteed salary levels or payscales- while nice and the icing on the cake, other than in exceptional circumstances, is not normally counted.

Simple rule of thumb- if its not guaranteed in writing, its not counted.

Two lenders were willing to add my additional earnings towards me and my partners 3.5 times figure, basing it off 3 years of figures.

I was curious and nothing the central bank released said you can't when I last looked.

The_Conductor

Cuddlesworth wrote: »

Two lenders were willing to add my additional earnings towards me and my partners 3.5 times figure, basing it off 3 years of figures.

I was curious and nothing the central bank released said you can't when I last looked.

They can do as an exceptional basis under the exceptional umbrella- but will insist on several years records and are considerably more likely to enter such an agreement for a first time buyer than a subsequent buyer. Its highly irregular- and you'd be well advised to assume you were not being granted such an exception.

hometruths

cnocbui wrote: »

I think there might be a modest price fall for less desirable properties or those subject to forced sale, but owners of decent properties won't go to market. I, will put mine up, but it will be at around current values. The REA and buying public might be annoyed, but it will be interesting for me.

But if there is a decline, it won't be by much, or for very long, because the supply of houses is way below demand, and only some of the demand is going away. This is why I am so interested in looking at what's happening in some overseas housing markets, like Oz, NZ and the US, where I keep seeing the same severe lack of supply staving off the expected severe price falls some were anticipating.

A lot of buyers over the last decade have bought for cash. Public servants comprise about a fifth of those employed and they are relatively wealthy and over paid. Lots of potential buyers won't be financially impacted, only a sub-set.

The idea that cash buyers and public servants are going to prop up the market is bananas.

These buyers are the ones with the strongest hands - cash in the bank or rock solid employment - and as such are incentivised to wait and see

We're told that if prices start falling sellers won't sell, they'll just wait and see what happens - i.e wait for higher prices. Unless they're forced sellers.

That works both ways, if prices start falling, buyers are just like sellers - there is an incentive to wait and see, to wait for lower prices. Unless they're forced buyers.

The cash buyer and public servant are the least likely to be forced buyers. If you are relying on these guys to pick up your property at 2019 prices you might be in for a long wait!

Dolbhad

I’ve seen some houses go up this week in Cork for higher than expected. I don’t know are prices higher as sellers/auctioneers think buyers will go under asking or do they think business as normal.

We were on subsidy payment so our AIP couldn’t progress to loan offer. We are back on track and checked in with or mortgage advisors for the two banks we are looking at. They have said exemption are “paused” (we were availing of an exemption with both banks so now our price point is lower) and asked were we looking at new build (as last house we looked at was a new build).

I inquired why. Interesting that both banks indicated that they expect issues with valuations on new build properties where you are sale agreed now but buying off plans and house is ready in 12 months. They said they were not interested in issuing loan offers for new build bought off plans or self builds.

LJ12345

schmittel wrote: »

The idea that cash buyers and public servants are going to prop up the market is bananas.

These buyers are the ones with the strongest hands - cash in the bank or rock solid employment - and as such are incentivised to wait and see

We're told that if prices start falling sellers won't sell, they'll just wait and see what happens - i.e wait for higher prices. Unless they're forced sellers.

That works both ways, if prices start falling, buyers are just like sellers - there is an incentive to wait and see, to wait for lower prices. Unless they're forced buyers.

The cash buyer and public servant are the least likely to be forced buyers. If you are relying on these guys to pick up your property at 2019 prices you might be in for a long wait!

Wait til the cash drop and borrowing will be made a lot easier...
https://www.chron.com/news/article/EU-to-unveil-virus-recovery-plan-amid-split-over-15296829.php

eagle eye

bubblypop wrote:

This is my original statement, Evey bank is different but I should have said most don't count it, because perhaps there is a bank that does, I don't know it if there is.
Not really a big change

I know that ptsb and Ulster count it so long as it's consistent and not just a one year thing.

eagle eye

eagle eye wrote: »

I know that ptsb and Ulster count it so long as it's consistent and not just a one year thing.

Well I have aip with Ulster Bank & they didnt count it, they did take other allowances into account, but not overtime.

cnocbui

LJ12345 wrote: »

Wait til the cash drop and borrowing will be made a lot easier...
https://www.chron.com/news/article/EU-to-unveil-virus-recovery-plan-amid-split-over-15296829.php

Wait till Italy say f*** the Dutch, and leave the EU more like. Seems very unlikely that money will be coming in any useful time frame, in terms of it's intended purpose.

Meanwhile, in Australia, they are talking about gifting $20,000 to new home buyers to keep the construction industry going.

Buyers of newly constructed homes will be offered grants of at least $20,000 by the federal government to help shield the building industry from the coronavirus-induced economic slowdown.

https://www.afr.com/policy/economy/new-home-buyers-to-get-cash-grants-20200531-p54y3g

uberwolf

bubblypop wrote: »

every bank is different, but since the central bank rules came in, they don't count it, because it is not guaranteed.

Income is not defined in the regulations and it's at the banks discretion to count whatever proportion of income that it is satisfied is recurring.

uberwolf

uberwolf wrote: »

Income is not defined in the regulations and it's at the banks discretion to count whatever proportion of income that it is satisfied is recurring.

Yea, that's what I mean, overtime is not guaranteed.

Villa05

LJ12345 wrote:

Wait til the cash drop and borrowing will be made a lot easier...

75% of that money is grant aid 2 of the most likely outcomes for that money
A. Used to build affordable housing to help alleviate one of the main reasons for clusters of covid. Working poor in cramped accommodation.

B wasted away in government spending

Another factor as we are net contributers to EU budgets, would we be contributing more to the fund than we would be receiving

pearcider

pearcider wrote: »

Well its a month later and we are up to 2,454. A steady increase but nothing to worry landlords yet. However I still see a perfect storm facing rents this year. Not only do we have a cyclical recession and covid 19 we have a crazy amount of student accommodation and hotels coming on stream recently. This will exert huge downward pressure on the rental market in Dublin. Now with tourism and foreign student numbers under severe pressure for next year, the bottom of the market could be a long way down.

In just the last week we have jumped to 2,635 which marks a dramatic acceleration in the rental supply available in Dublin. We will have to wait and see whether this new rate holds into the summer.