Property Market 2020

Fuzzy_Dunlop

Does anyone know how many normal pay slips following being on the subsidy the banks are looking for?

cnocbui

The S&P 500 erased its June decline after a report showed U.S. pending home sales posted a record gain, exceeding all forecasts.

Good luck waiting to snap up those bargain priced houses after prices fall.

MrMusician18

Fuzzy_Dunlop wrote: »

Does anyone know how many normal pay slips following being on the subsidy the banks are looking for?

6 months.

MrMusician18

cnocbui wrote: »

Good luck waiting to snap up those bargain priced houses after prices fall.

Indeed, good luck to those that do, because the vast majority of would be home owners will find themselves locked out of the market because they can't get credit.

I remember in 2012 I saw a house, one of those lovely red brick Georgian houses in D6, one of the smaller ones sell for something like 450k, and thinking to myself that someone had snapped up a bargain. I could recognise that this house was going for a song, so why didn't I bid? Simple reason was I didn't have access to the credit necessary, just like every other person that watched that sale pass them by. Sometimes it's only the wealthy that can afford the bargain. The other question people ask was why did the vendor sell at such a depressed price, surely they knew they were giving it away. Probably. The other truth is that even in a depressed market some sales have to take place, death, divorce, financial problems all force sales.

Going forward it's clear that the Irish banks are only going to issue substantial mortgages to high earning individuals in secure employment or couples in secure employment. Those form a small percentage of today's buyer pool. Prices will fall and the market will contract - but there will still be great opportunities for those that have the means to buy.

The US is a different market with different fundamentals. They have also largely decided that the pandemic is over even though cases are rising sharply again. Time will tell if that was the correct approach.

Assetbacked

cnocbui wrote: »

Good luck waiting to snap up those bargain priced houses after prices fall.

Speaking of the S&P500, https://www.investopedia.com/the-fed-s-corporate-bond-portfolio-5069989

The Fed has been buying the debt of Apple and Microsoft, among other large corporations. That is jaw dropping, I just don't understand where they think this is going to end? The Fed is now propping up the stock and bond markets, they are not reflecting the real economy. Facebook has lost billions in valuation the past few days, apparently due to the corporations pulling their advertisement but I suspect there was some haircuts to advertising budgets due to the Covid19 crisis which were conveniently timed to gain some free positive publicity from pulling their online ads. A lot of the tech jobs in Dublin are online sales, once the Fed stops pumping money into the system, these companies may find that they need to cut their cloth which would have implications for jobs and demand for rentals in Dublin.

fergiesfolly

MrMusician18 wrote: »

6 months.

Myself and wife have just come off the WSS. Our jobs are 100% safe.Was hoping to talk to the bank next month about a mortgage to move house.
Can you verify or have a link for that?

MrMusician18

Assetbacked wrote: »

Speaking of the S&P500, https://www.investopedia.com/the-fed-s-corporate-bond-portfolio-5069989

The Fed has been buying the debt of Apple and Microsoft, among other large corporations. That is jaw dropping, I just don't understand where they think this is going to end? The Fed is now propping up the stock and bond markets, they are not reflecting the real economy. Facebook has lost billions in valuation the past few days, apparently due to the corporations pulling their advertisement but I suspect there was some haircuts to advertising budgets due to the Covid19 crisis which were conveniently timed to gain some free positive publicity from pulling their online ads. A lot of the tech jobs in Dublin are online sales, once the Fed stops pumping money into the system, these companies may find that they need to cut their cloth which would have implications for jobs and demand for rentals in Dublin.

That story passed me by, so thanks for posting it. That is extraordinary.

Dub4747

schmittel wrote: »

The fact that banks restrict lending to people whose salaries are subsidised/replaced by government handouts should not really come as a big surprise to anybody.

I can understand if you're on unemployment benefit but why if your company decided to avail of help from the government but still tops up your wages in full should you be ruled out?

My husband and I own a home and are literally a week away from putting it on the market and have found the home we want to buy as we need to trade up. We talked to AIB (we have our current mortgage with them) and went through all our wages and details but had not finalised our application.

I have worked fulltime from home (more hours than ever before) during lockdown and my salary has remained unchanged. I am not unemployed. I am not on a pay cut. My job is not in danger. My company just used help the government offered so they could afford to keep all staff employed and paid. My husband's job is totally secure and he even got a pay rise during the lockdown. Why should we be ruled out from a mortgage? It's total BS. We bailed these banks out and now they want to screw those of us who are still working and making our full wages???

brisan

cnocbui wrote: »

It was 14.9% in 2017, according to the OECD: http://www.oecd.org/gov/gov-at-a-glance-2019-ireland.pdf

300,000 in 2020 according to the Dept of public expenditure and reform

https://ops2020.gov.ie/app/uploads/2019/08/Our-Public-Service-2020-WEB.pdf

JimmyVik

richard D wrote: »

This can only mean one thing a lack of lending, which will result in lower competition for houses, and ultimately lower prices.

I'm flabbergasted at how people can argue on this thread that house price are going up because of pent up demand from Covid 19 savings, house prices go up due to lack of supply. Its utter nonsense.

We know that we are in a recession all the forecasters, IMF, Central Bank, Irish Government etc are all forecasting a contraction in the economy by up to 12% and maybe some recovery in 2021. All have forecasted a downward projection on house prices. All the models used have factored in all the variables such as a) Shortage of supply due to construction ceasing,b) additional savings accumulated during the lock-down etc.
Do you think its wise to trust someone opinion Mr Joe Bloggs on this site who has ulterior motives to begin with (a) either bought a hose recently b) looking to buy before there exemption is pulled) who wants to convince themselves that house prices will go up due to xxxx, so they feel,like they have made/will make the right decision.

Can people accept that fact that house prices will fall. Instead of trying to make themselves feel better if they have bought recently or are looking to buy.

The only questions is how much will prices fall, 5%? 10%? 15%? or 20%+, that should be the focus of this discussion.

The thing im worried about is contraction of supply.
I live near enough to 5 construction sites. On 4 nothing has happened since lockdown. Houses are well on, Roofs on and insulation on the outside etc, but work has stopped. On 1 it was a nearly finished council development. They are ploughing ahead with that one.

Reversal

Dub4747 wrote: »

I can understand if you're on unemployment benefit but why if your company decided to avail of help from the government but still tops up your wages in full should you be ruled out?

My husband and I own a home and are literally a week away from putting it on the market and have found the home we want to buy as we need to trade up. We talked to AIB (we have our current mortgage with them) and went through all our wages and details but had not finalised our application.

I have worked fulltime from home (more hours than ever before) during lockdown and my salary has remained unchanged. I am not unemployed. I am not on a pay cut. My job is not in danger. My company just used help the government offered so they could afford to keep all staff employed and paid. My husband's job is totally secure and he even got a pay rise during the lockdown. Why should we be ruled out from a mortgage? It's total BS. We bailed these banks out and now they want to screw those of us who are still working and making our full wages???

From Revenue;

To qualify for the scheme, employers must

1. Be experiencing significant negative economic disruption due to Covid-19.

2. Be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover.

3. Be unable to pay normal wages and normal outgoings fully

I don't understand how it's not obvious why banks are cautious about this. No matter what people want to think, if an employer is availing of WSS, then the jobs of their employees cannot be considered 100% safe, or immune to future paycuts. No point telling the bank your job is 100% safe when at the same time your employer is telling revenue they're in bother.

JimmyVik

Dub4747 wrote: »

Why should we be ruled out from a mortgage? It's total BS. We bailed these banks out and now they want to screw those of us who are still working and making our full wages???

Its so we dont have to bail out the banks again.

Hubertj

Assetbacked wrote: »

Speaking of the S&P500, https://www.investopedia.com/the-fed-s-corporate-bond-portfolio-5069989

The Fed has been buying the debt of Apple and Microsoft, among other large corporations. That is jaw dropping, I just don't understand where they think this is going to end? The Fed is now propping up the stock and bond markets, they are not reflecting the real economy. Facebook has lost billions in valuation the past few days, apparently due to the corporations pulling their advertisement but I suspect there was some haircuts to advertising budgets due to the Covid19 crisis which were conveniently timed to gain some free positive publicity from pulling their online ads. A lot of the tech jobs in Dublin are online sales, once the Fed stops pumping money into the system, these companies may find that they need to cut their cloth which would have implications for jobs and demand for rentals in Dublin.

Verizon pulled advertising from Facebook because their paid ads appeared beside a far right banner.Unilever and others followed for similar reasons.

Google ad revenue was hit almost immediately - huge % of it is derived from tourism, travel, hotels, restaurants etc. A lot of the staff work based on % commission / bonuses etc. However, google cloud is booming....

kippy

ebayissues wrote: »

Banks are or should be using a risk based approach towards lending. If you're on the government scheme, or you received, bank should withdraw AIP and re-asses your situation in 6 months. You should not be given a mortgage.

The actions taking by AIB should have be done 1/2 months ago.

No denial, I've skin in the game. Exemption expired , still renting with a disgusting and frustrating housemate, however I still have the peace of mind now than to purchase and lose my job.

I see posters here saying better proceed as it's better to loose your job and live in your own house - really sums up why we pay huge rates for mortgage in Ireland.

Anyone whose job is at risk and yet still proceeds deserves what they get.

Wait a minute. We pay huge mortgage rates for mortgages because it's almost impossible reclaim the asset for the bank. This is a rule of the game. Why take a personal stance in this?
I wouldn't be condoning buying a house while you are in a precarious financial situation if it wasn't so hard for the banks to take the asset back.
Your own personal stance won't lower rates and while the rules are as they are at the moment I can see why people try their damnedest to buy.

Cal4567

We can forget as well that over the last 2 years, since around the middle of 2018, the property market has more or less stagnated. We have had very little increases or decreases. It has been pretty stable and consistent. My view was we had more or less reached the real value due to central bank lending rules in the main.

The media does tend to lazily just go and ask the various agents, they are mostly but not all Irish arms of international companies, for their opinions. These opinions are stated in news reports as if they were facts. It's in the interest of said organisations to be positive regarding the market, and activity, and put as much of a positive spin on it. They after all need the business, any business activity. Of course there hasn't been much activity these last 3 months, so little activity that it is almost impossible to make any judgement call yet.

While 'you can't polish a turd' may be too crude an analysis, I am holding off selling my house. We were ready to put the house on the market this spring. Going to wait until hopefully next spring or summer now. Expecting a 5-10% drop in value, and also expecting what we buy to have the same discount.

brisan

cnocbui wrote: »

If four people are interested in a house, and one of them gets bumped from contention because of loan requirements, that still leaves 3 in competition to buy so in all likelihood, the price won't drop.

As we have already seen anecdotally, if prices do drop, or if there is even just a suspicion they might, many sellers will just withdraw from the market or not enter it to begin with, further restricting supply.

The vast majority of sellers will be looking to buy as well so the price of the property they are buying will drop as well
The only exceptions really are landlords getting out of the market who will take the best price available and houses from the estates of deceased

givyjoe

kippy wrote: »

Wait a minute. We pay huge mortgage rates for mortgages because it's almost impossible reclaim the asset for the bank. This is a rule of the game. Why take a personal stance in this?
I wouldn't be condoning buying a house while you are in a precarious financial situation if it wasn't so hard for the banks to take the asset back.
Your own personal stance won't lower rates and while the rules are as they are at the moment I can see why people try their damnedest to buy.

The post you're quoting also misses another crucial point, mortgages for the same property are significantly cheaper. If you lose your job and can't pay your mortgage, then you sure as hell wouldn't be able to afford your rent. I know which situation I'd rather be in if i unfortunately lost my job.

givyjoe

MrMusician18 wrote: »

6 months.

That is completely incorrect, at least up until yesterday it was.

brisan

Dub4747 wrote: »

I can understand if you're on unemployment benefit but why if your company decided to avail of help from the government but still tops up your wages in full should you be ruled out?

My husband and I own a home and are literally a week away from putting it on the market and have found the home we want to buy as we need to trade up. We talked to AIB (we have our current mortgage with them) and went through all our wages and details but had not finalised our application.

I have worked fulltime from home (more hours than ever before) during lockdown and my salary has remained unchanged. I am not unemployed. I am not on a pay cut. My job is not in danger. My company just used help the government offered so they could afford to keep all staff employed and paid. My husband's job is totally secure and he even got a pay rise during the lockdown. Why should we be ruled out from a mortgage? It's total BS. We bailed these banks out and now they want to screw those of us who are still working and making our full wages???

The fact that your company took the payment and I quote

My company just used help the government offered so they could afford to keep all staff employed and paid.
This basically means in your own words that without those Government payments your company could not afford to keep all its staff employed and therefore would have to cut jobs
The bank or you have no way of knowing if your job is one of those that would be cut

Villa05

MrMusician18 wrote:

I remember in 2012 I saw a house, one of those lovely red brick Georgian houses in D6, one of the smaller ones sell for something like 450k, and thinking to myself that someone had snapped up a bargain. I could recognise that this house was going for a song, so why didn't I bid? Simple reason was I didn't have access to the credit necessary, just like every other person that watched that sale pass them by. Sometimes it's only the wealthy that can afford the bargain.

That kind of sums up the Irish property market. Most people only buy to have a place they can call home. We all need one, but the market is rigged so that the wealthy can extract the maximum out of people for this need.

People think they are big gainers if there property rises in price but in truth it's irrelevant because it is your home.
It will even cost you more should you need to upsize and even if you don't its your children that will suffer, having to pay more and more for the same thing. When the price rises to unsustainable levels a crash occurs and these funds move in to mop up the bargains and your children become the next victims of the cycle.
All this is being egged on by home owners who think they are winners because there House has gone up in value
Your not, your a cog in a machine that will be replaced by your children when you have outlived your usefulness

The only true gainers are the super rich in the form of foreign pension funds and vulture funds and land bankers. The very institutions the last Government welcomed in here on a close to tax free basis adding insult to injury

Dub4747 wrote:

I can understand if you're on unemployment benefit but why if your company decided to avail of help from the government but still tops up your wages in full should you be ruled out?

It really is common sense, there is a risk to the economy which at present is difficult to quantify. Banks in such circumstance need to proceed with caution.
A company needs to fulfill certain negative criteria to avail of this help.

Use the time to increase your deposit which may help get a lower interest rate and with reduced mortgages, the likelihood is that the house you will buy will be a little cheaper

kippy wrote:

Wait a minute. We pay huge mortgage rates for mortgages because it's almost impossible reclaim the asset for the bank. This is a rule of the game. Why take a personal stance in this? I wouldn't be condoning buying a house while you are in a precarious financial situation if it wasn't so hard for the banks to take the asset back. Your own personal stance won't lower rates and while the rules are as they are at the moment I can see why people try their damnedest to buy.

You know your in a bubble when people excuse irrational behaviour to obtain a particular asset

The crash may not be too far away

kippy

Villa05 wrote: »

You know your in a bubble when people excuse irrational behaviour to obtain a particular asset

The crash may not be too far away

I wouldn't condone the behaviour for everyone in every circumstance but if you've been approved for a mortgage, you've a deposit saved up, and you're planning to live in the house for the long term, it's a safer personal stance to try get the house purchased than hold off and rely on the rental market to look after you for an undefined amount of time, while all the time realising that your chances of getting mortgage approval again in the short to medium term are damn near impossible.
A house is not just an asset. It's not all about profit and loss.

All situations are different, but I can see why people who are approved for mortages are trying to get their houses sorted.

It's all well and good saying what you've said in your post - a review of the property market but an individual has absolutely no control over many of those factors. You either play the game to your own benefit or get outta here altogether.
I'd rather have as much control over my own living arrangements as possible, rather than rely on all of those external factors.

givyjoe

brisan wrote: »

The fact that your company took the payment and I quote

My company just used help the government offered so they could afford to keep all staff employed and paid.
This basically means in your own words that without those Government payments your company could not afford to keep all its staff employed and therefore would have to cut jobs
The bank or you have no way of knowing if your job is one of those that would be cut

If the government mandated that they close their doors, obviously they couldn't afford to pay their staff, now the doors are re-opened, they can. Not every company is dead wood.

brisan

handlemaster wrote: »

Will it continue? And why would it ?

WFH and a lack of foreign and Irish students attending college

brisan

givyjoe wrote: »

If the government mandated that they close their doors, obviously they couldn't afford to pay their staff, now the doors are re-opened, they can. Not every company is dead wood.

By your own admission some are and the banks will not take the risk and rightly so

givyjoe

givyjoe wrote: »

If the government mandated that they close their doors, obviously they couldn't afford to pay their staff, now the doors are re-opened, they can. Not every company is dead wood.

And if there's a second wave of Covid19 and the doors need to close again?????
Banks will obviously not be overly keen to lend to folk who are on state support.
Borrowing hundreds of thousands if your employer can't afford to pay you at the moment really isn't overly wise ............ it looks like many folk don't agree so the banks are taking the correct course of action, IMO.
Unfortunately many companies will go wallop over the coming months ........ of those it's reasonable to presume they'd have had reduced turnover from March to June and qualified for state support to pay their staff.

Villa05

kippy wrote:

I wouldn't condoe the behaviour for everyone in every circumstance but if you've been approved for a mortgage, you've a deposit saved up, and you're planning to live in the house for the long term, it's a safer personal stance to try get the house purchased than hold off and rely on the rental market to look after you for an undefined amount of time, while all the time realising that your chances of getting mortgage approval again in the short to medium term are damn near impossible. A house is not just an asset. It's not all about profit and loss.

You emphasise my other point on the same post.
The property market is designed to force you to buy even if you know your future outlook might be pointing to negative hit. you have the gun to your head of an extortionate rental market to push into making the decision to buy.

This process maximises the damage caused by a crash and the the super rich can move in and mop up the bargains at the bottom of the market.

This is not an accident or luck or anything like that. This is the way the property market has been designed and its been predominantly done by Irish government policy and inflicted on its citizens

givyjoe

brisan wrote: »

By your own admission some are and the banks will not take the risk and rightly so

By my own admission? This isn't a court and I said some. Way to completely ignore what was stated to suit your own narrative.

The Wordress

We were on track to being granted a mortgage and buying our first home Pre Covid. However, because we found our dream house, we did a rush job by only applying through the bank we have accounts with. We then withdrew our offer because of the uncertainty around Covid.

3 months later, my husbands job is hanging by a thread. We went back to a broker to apply for a mortgage. As soon as he found out that my husband is still on Covid payment, he sent application in as single income family based on my income.

This was over 3 weeks ago. I don't know why anyone would be shocked by AIBs approach. We knew that banks would be reluctant to lend 2-3 months ago and if we can't get a big enough mortgage, then we will continue to rent&save and hopefully strike while the iron is hot coming out of whatever downturn happens.

How anyone believes there isn't a major downtown coming is beyond me.

As I said before, business is down 60% around here. Every business feeds each other around here and incomes are way down.

Basic economics.

givyjoe

Augeo wrote: »

And if there's a second wave of Covid19 and the doors need to close again?????
Banks will obviously not be overly keen to lend to folk who are on state support.
Borrowing hundreds of thousands if your employer can't afford to pay you at the moment really isn't overly wise ............ it looks like many folk don't agree so the banks are taking the correct course of action, IMO.
Unfortunately many companies will go wallop over the coming months ........ of those it's reasonable to presume they'd have had reduced turnover from March to June and qualified for state support to pay their staff.

Many im sure will, however many wont and simply issuing a blanket policy having previously been on covid is further exacerbating the negative impact on the economy. You seem to be completely forgetting that the government imposed a lockdown so that many viable businesses simply couldn't get customers through the door, doors are now re-opened and they no longer meet the criteria for qualifying for wage subsidy. There is a requirement now (for drawdown) that a letter be provided to state if you were affected, that you are no longer affected and there are no changes to your wage or employment status.

How long do you think folks should have to wait after the covid subsidy is over? Until a vaccine, x number of years.. never?

Cyrus

givyjoe wrote: »

Many im sure will, however many wont and simply issuing a blanket policy having previously been on covid is further exacerbating the negative impact on the economy. You seem to be completely forgetting that the government imposed a lockdown so that many viable businesses simply couldn't get customers through the door, doors are now re-opened and they no longer meet the criteria for qualifying for wage subsidy. There is a requirement now that a letter be provided to state if you were affected, that you are longer affected and there are no changes to your wage or employment status.

How long do you think folks should have to wait after the covid subsidy is over? Until a vaccine, x number of years.. never?

so you expect the bank to do a due diligence on the future prospects of each applicants company? a blanket policy is the only workable solution and its a sensible one. its for everyones own good.