Property Market 2020

PCP is essentially pay as you go with a premium. If you stop paying, you lose the car. If the banks play ball for a while and then the driver still can't pay and the bank can flog the car to clear their balance sheet that's fair enough IMO.

landofthetree

@gavreilly
It's an emergency measure which will lapse after the 12 weeks, says Donohoe, who says the €3.7bn wage subsidy scheme will be funded through State borrowing.
https://mobile.twitter.com/gavreilly/status/1242492488084082689

So much for boards.ie claim that money would just be printed.

All of it is going to have to be borrowed and paid back.

Claw Hammer

cal naughton wrote: »

The Bank's in this case are Volkswagen bank, Ford credit ,Audi finance etc and not your Irish high street bank's.

The high street banks are up to their necks in it.

SozBbz

Claw Hammer wrote: »

The banks are heavily exposed on PCPs. when this is over they will want to raise cash immediately. they will take back cars and sell them for what they can get. they will make sweet talk noises on the radio about helping affected customers but in reality they will do what they are doing to everyone else and shaft them.

No, they're really not. A car loan from a bank is more likely somewhere between 6-9% and much more standard.

Most PCPs are financed by the banks of the manufacturers themselves (like VW Bank) who have so much money they created a bank to lend at below market rates just so they could sell more cars.

Regardless, its not in anyones interests for all of these arrangements to end suddenly. Arrangements will be put in place to get past the current difficulty. A firesale of repossessed cars would 1) cost a fortune to administer and 2) not yeild that much relativly speaking 3) burn otherwise good customers for future business.

Graham

landofthetree wrote: »

@gavreilly
It's an emergency measure which will lapse after the 12 weeks, says Donohoe, who says the €3.7bn wage subsidy scheme will be funded through State borrowing.
https://mobile.twitter.com/gavreilly/status/1242492488084082689

So much for boards.ie claim that money would just be printed.

All of it is going to have to be borrowed and paid back.

"printing money" is a term generally applied to quantitative easing (the introduction of new money into the money supply by a central bank).

voluntary

landofthetree wrote: »

@gavreilly
It's an emergency measure which will lapse after the 12 weeks, says Donohoe, who says the €3.7bn wage subsidy scheme will be funded through State borrowing.
https://mobile.twitter.com/gavreilly/status/1242492488084082689

So much for boards.ie claim that money would just be printed.

All of it is going to have to be borrowed and paid back.

Tons of money is being and will be printed by the ECB so the States, like Ireland, can borrow money with relatively low interest. If not for the newly printed money we'd have to borrow on much worse terms.

Villa05

GreeBo wrote:

That doesnt make it over valued. Why should a first time buyer have to live in Dublin?

SozBbz wrote:

I know this. Its other posters on this thread seem to think that there is a "correct" price for a house and that somehow that has to bear some relation to whether or not the average Joe/Josephine can afford it.

Graham wrote:

By the same logic, BMWs are due a massive pricing correction any minute now.

It's odd that in the same week that 40000 volunteered to come home and help to fight the virus, we still have these attitudes from posters here. Many of those volunteers left because of high rents and having their salaries slashed to pay for the last property binges

Aren't ye worth it!!!!!!!!

Zenify wrote:

Financial times have a great article pretty much saying that we have made the same mistakes in the property/mortgage market as the last time (without saying it). Just a different structure.

It was enhanced in this country allowing them almost tax free status

mariaalice wrote:

Are there any capital cities in the western world where that happens?

Maybe that's why crashes become global events

Graham

Villa05 wrote: »

It's odd that in the same week that 40000 volunteered to come home and help to fight the virus, we still have these attitudes from posters here. Many of those volunteers left because of high rents and having their salaries slashed to pay for the last property binges

I must be missing something here because I don't see the slightest connection.

Are you saying 40000 people returning home is going to be good for the affordability of property or are you suggesting that because they're coming home we should suddenly work out how to decrease property costs?

Donald Trump

Graham wrote: »

By the same logic, BMWs are due a massive pricing correction any minute now.

That's a bit silly.

These economic multiples are generally good indicators of where a bubble might exist. Unless you have very specific reasons, an over- or under-pricing of houses benchmarked against these multiples will not be sustainable.

The BMW point really is silly. That is an optional "luxury" version of a good.
If all garages decided to increase their margins such that all cars, new and secondhand, were selling for more than 100k, then the motor industry here would not be sustainable for long.

Graham

Donald Trump wrote: »

The BMW point really is silly. That is an optional "luxury" version of a good.

And yet the similarities are striking. There are plenty of people who purchase a lower priced car rather than setting the unrealistic expectation that BMWs are somehow due a 'correction'.

In the case of property the compromise is usually on size or location rather than marque.

Browney7

landofthetree wrote: »

@gavreilly
It's an emergency measure which will lapse after the 12 weeks, says Donohoe, who says the €3.7bn wage subsidy scheme will be funded through State borrowing.
https://mobile.twitter.com/gavreilly/status/1242492488084082689

So much for boards.ie claim that money would just be printed.

All of it is going to have to be borrowed and paid back.

The ECB will create the money to buy Irish Debt - they may well buy it for 100 years at a 1% interest rate no one knows. Potential for the EU to issue EU bonds and allocate to countries which would effectively be a 0% interest rate. You're right, the principal would have to be repaid which actually means it would just be rolled over forever more

kevinc565

Assetbacked wrote: »

3.5 times salary is affordability. Looking at median salaries, that renders prices in Ireland beyond affordable. Hence, correction.

are you factoring in that most private FTB buyers are couples?

so 7 times median income is affordable fro a couple.

voluntary

kevinc565 wrote: »

are you factoring in that most private FTB buyers are couples?

so 7 times median income is affordable fro a couple.

Would median not exclude half of the population from your equation? Something is hardly affordable if half of the society cannot afford it.

greendom

https://amp.independent.ie/business/personal-finance/new-house-prices-could-fall-by-up-to-20pc-amid-coronavirus-uncertainty-report-39071128.html

Davy Stockbrokers predicting that new house prices could fall by 20%

handlemaster

In the indo they are saying at least 500000 jobs to be lost ..

SteelyDanJalapeno

landofthetree wrote: »

@gavreilly
It's an emergency measure which will lapse after the 12 weeks, says Donohoe, who says the €3.7bn wage subsidy scheme will be funded through State borrowing.
https://mobile.twitter.com/gavreilly/status/1242492488084082689

So much for boards.ie claim that money would just be printed.

All of it is going to have to be borrowed and paid back.

The money was printed by the ECB, it's part of their 750bn support package, loans are available at negative interest rates

skooterblue2

greendom wrote: »

https://amp.independent.ie/business/personal-finance/new-house-prices-could-fall-by-up-to-20pc-amid-coronavirus-uncertainty-report-39071128.html

Davy Stockbrokers predicting that new house prices could fall by 20%

I think prices could fall by 30%. A lot of people think this is just the Coronavirus and it will all be over in 4-6 months. There is a serious amount of unregulated credit going around out there.

PommieBast

greendom wrote: »

https://amp.independent.ie/business/personal-finance/new-house-prices-could-fall-by-up-to-20pc-amid-coronavirus-uncertainty-report-39071128.html

Davy Stockbrokers predicting that new house prices could fall by 20%

Dublin was 1% down in 2019[1] and I priced in a potential 20% drop into my budgeting, so this in line with what I was prepared for anyway.



[1] https://www.irishtimes.com/business/construction/property-prices-fell-almost-1-in-dublin-in-2019-1.4172611

LeineGlas

skooterblue2 wrote: »

I think prices could fall by 30%. A lot of people think this is just the Coronavirus and it will all be over in 4-6 months. There is a serious amount of unregulated credit going around out there.

What kind of unregulated credit?

CalRobert

cnocbui wrote: »

I have not seen the cost of inputs to house construction fall in my lifetime, and I watched live on a B&W TV in a classroom, as Armstrong stepped onto the moon.

So nice in theory, but I'll believe it when I see it.

They can fall, but people need to quit being so damn stubborn and close-minded about what a house can be built out of.


Wood and offsite construction are far cheaper (~€500 / sqm) and easier to hit Part L/NZEB compliance too.

skooterblue2

LeineGlas wrote: »

What kind of unregulated credit?

Where banks/Financial institution are over leveraged.
This means they are lending far more than they have in their vaults in cash. This is normal but it can be as high as 35:1 or higher.

Graham

I understood banks capital reserves were strictly regulated.

skooterblue2

Graham wrote: »

I understood banks capital reserves were strictly regulated.

The Banks run rings around the Central banks and financial regulators. nothing has changed since 2008. Dont you remember the Anglo Chiefs phone calls calling all the Central bank staff dummies? Same story CDO's are now renamed BTO's.
Tower of Babel stuff

cnocbui

CalRobert wrote: »

They can fall, but people need to quit being so damn stubborn and close-minded about what a house can be built out of.


Wood and offsite construction are far cheaper (~€500 / sqm) and easier to hit Part L/NZEB compliance too.

What do such structures have on their exterior, to make them last 100 years?

Graham

skooterblue2 wrote: »

The Banks run rings around the Central banks and financial regulators. nothing has changed since 2008. Dont you remember the Anglo Chiefs phone calls calling all the Central bank staff dummies? Same story CDO's are now renamed BTO's.
Tower of Babel stuff

Which Irish bank are issuing BTOs?

Even if banks are issuing BTOs the underlying loans being collateralised would be nothing like the pre-GFC CDOs where ultra high risk loans were bundled and marketed at highly inflated investment ratings.

skooterblue2

Graham wrote: »

Which Irish bank are issuing BTOs?

Even if banks are issuing BTOs the underlying loans being collateralised would be nothing like the pre-GFC CDOs where ultra high risk loans were bundled and marketed at highly inflated investment ratings.

IT was meant in general there is a complete indifference to Financial regulation from the institutions internationally. The banks will probably be coming cap in hand to be bailed out like last time and the time before. Executives will still get quarterly bonuses and shareholders and tax payers will get screwed again.

Graham

So are you saying our banks are or aren't over-leveraged and there is/isn't enormous unregulated lending putting the banking sector at risk?

PhilipsR

skooterblue2 wrote: »

IT was meant in general there is a complete indifference to Financial regulation from the institutions internationally. The banks will probably be coming cap in hand to be bailed out like last time and the time before. Executives will still get quarterly bonuses and shareholders and tax payers will get screwed again.

Some backtrack on previous posts here.

GreeBo

Pheonix10 wrote: »

Issue is that Dublin has plenty of land & with half decent transport, we could increase the supply hugely - with 30mins commute for a hell of a lot of people.

But that requires forward planning which the government can't handle.

Ok, so say we do that, what do you propose we do in 5 or 10 years time when the population has increased again?

Start stacking houses on top of each other? Triple decker Luas carriages perhaps?

Just take a look at the mess that is going to be Cherrywood when its complete. How on earth are is anyone going to get on a luas into the city centre?

Browney7 wrote: »

In fairness the selling of houses below cost has been done for years in the form of councils selling off council property to the occupiers - selling for more than the build cost a number of years previous but for less than the replacement cost

Yeah, and how well has that worked out for social housing availability?

skooterblue2

Graham wrote: »

So are you saying our banks are or aren't over-leveraged and there is/isn't enormous unregulated lending putting the banking sector at risk?

Ours definitely are but not to the same extent that the american cousins are.
The same thing is going to happen again that happened in 2008 and the Irish banks will have bought the same sub prime bonds that were get rich quick schemes in 2008. Its all happening again.