Boomer Wealth

HerrKuehn

SusieBlue wrote: »

Just out of curiosity I threw some numbers into an online mortgage calculator.
The average house where I live costs 300k, to be entitled to a mortgage of this size a person would have to earn 86k a year (either on their own or with a partner) which is significantly higher than the average wage.
Monthly repayments would be €936 for a 35 year mortgage with a 30 grand deposit.

Then on the rental market, you have properties going for €1800 pm. So shouldn’t a person need to earn about 160k a year to live there, if we applied the same rule to the rental market?
So why are we expecting people on 25k to afford this when if the same rules as mortgages applied, only someone on 160k (ish) would be considered financially eligible to have a property where the repayment was €1800 a month?

That just shows the blatant ridiculousness and hypocrisy of both systems.
I don’t know anyone on 86k and I’m struggling trying to think of a couple that jointly earn that much. It prices out the vast majority of buyers.
These aren’t 5 star turn key properties either, these are bog standard properties, many of which would definitely require some work and aren’t located in sought after areas.

It’s completely illogical that we expect people on low wages, or indeed even average wages, to pay €1800 pm when we’re telling them they ‘can’t afford’ a mortgage that would cost them HALF of that amount of money pm out of the other side of our mouths.
It’s actually insane.
That’s what’s wrong with the system and that’s why people feel like they aren’t even being given a chance.

My parents bought their first home in their early 20’s, a modest 3 bed semi detached house in Cork city, on one construction labourers wage. The idea that a young person would be able to do what nowadays if they simply god rid of the iPhone and gave up the avocado toast is actually laughable.

It costs 300k with the current rules. If you changed it so that anyone who could afford €1800 in rent per month, the 300k house would probably cost 500k. The absolute amount of money you can afford to pay is irrelevant, what matters is that you have a bit more than someone else who also wants to buy it.

GreeBo

OwlsZat wrote: »

Indeed it's that simple increase supply and prices will drop.

You make it cheaper to build. So yield goes up. Money comes in and more projects get build.

No, you need to increase supply *above* demand before prices will drop.
In a growing population, how do you endlessly increase supply in specific areas?

GreeBo

lainey_d_123 wrote: »

What on earth is your point here? You are babbling on about complete nonsense.

I moved out because I had no choice. I've been working hard for years and I'd like to be able to buy a one-bed flat now than I'm 35. Who said anything about a 'cheap house'? I am saving up for ONE BED FLAT.

You Daily Mail reading bots are all the same. Just parroting on and on, the same worn out clichés and pointless nonsense.

Sure, I'm the one babbling and parroting about how its unfair that I cant afford to buy where I want when I left home at 18 with a ****ty degree and no job.

Not even Willy Wonka lives in that sort of dreamworld.

Wanderer78

Wanderer78 wrote: »

Once again, one of the main reasons, in most recent times, for the rapid increase in the price of housing, is in fact due to the increase in availability of credit, largely created by private sector financial institutions, I.e. bank's.....

HerrKuehn wrote: »

It costs 300k with the current rules. If you changed it so that anyone who could afford €1800 in rent per month, the 300k house would probably cost 500k. The absolute amount of money you can afford to pay is irrelevant, what matters is that you have a bit more than someone else who also wants to buy it.

................

dubrov

Making it cheaper to build just ends up increasing land prices. So you just end up with poorer quality housing that costs the same

Wanderer78

dubrov wrote: »

Making it cheaper to build just ends up increasing land prices. So you just end up with poorer quality housing that costs the same

land value tax!

SusieBlue

HerrKuehn wrote: »

It costs 300k with the current rules. If you changed it so that anyone who could afford €1800 in rent per month, the 300k house would probably cost 500k. The absolute amount of money you can afford to pay is irrelevant, what matters is that you have a bit more than someone else who also wants to buy it.

The point is that the rules involved in buying the average house eliminates the eligibility of the vast majority of buyers. Average workers should be able to afford average homes but they are priced out by a very large margin.
There is something very wrong with a society where only someone on an exceptionally high wage (86k) can afford the average home.
What about all the people on less than that, which again, is the vast majority of society?

It’s pure hypocrisy to tell someone they can’t afford €936 for a mortgage while destining them to a life of renting properties that will cost them twice that amount per month. The fact that the government continues to allow this to happen is astonishing.

I just looked on Daft for properties in my area that cost around the 136k mark, which is 3.5 times the average wage.
There was 12 properties, three of which were sites for development.
The other 9 were one bedroom cottage style terraced properties with no front or back gardens and no parking, located on main roads of busy streets.
All would require at least another 100 grand of work to make them liveable, as they are in a serious states of disrepair and in need of modernisation.

Is that really the best someone on an average wage should hope for or expect from life, a home where they can’t even have kids because there’s no spare room and no space to extend?
Or can we not acknowledge that there’s something seriously wrong with that, and we need to make suitable housing more accessible for all earners?

HerrKuehn

SusieBlue wrote: »

The point is that the rules involved in buying the average house eliminates the eligibility of the vast majority of buyers. Average workers should be able to afford average homes but they are priced out by a very large margin.
There is something very wrong with a society where only someone on an exceptionally high wage (86k) can afford the average home.
What about all the people on less than that, which again, is the vast majority of society?

It’s pure hypocrisy to tell someone they can’t afford €936 for a mortgage while destining them to a life of renting properties that will cost them twice that amount per month. The fact that the government continues to allow this to happen is astonishing.

I just looked on Daft for properties in my area that cost around the 136k mark, which is 3.5 times the average wage.
There was 12 properties, three of which were sites for development.
The other 9 were one bedroom cottage style terraced properties with no front or back gardens and no parking, located on main roads of busy streets.
All would require at least another 100 grand of work to make them liveable, as they are in a serious states of disrepair and in need of modernisation.

Is that really the best someone on an average wage should hope for or expect from life, a home where they can’t even have kids because there’s no spare room and no space to extend?
Or can we not acknowledge that there’s something seriously wrong with that, and we need to make suitable housing more accessible for all earners?

A couple on average incomes could afford a property in your area. We tried the easy credit during the mid noughties and it didnt work out very well in the end, you may remember. Someone on 40k, could live in a house share and should be able to save 1k per month in my opinion. So, 5 years and you have 60k. If you have 2 people together who save, then it can be achieved in a shorter time frame or they could get end up with a much larger deposit. These are the people you are competing with.

Wanderer78

HerrKuehn wrote: »

A couple on average incomes could afford a property in your area. We tried the easy credit during the mid noughties and it didnt work out very well in the end, you may remember. Someone on 40k, could live in a house share and should be able to save 1k per month in my opinion. So, 5 years and you have 60k. If you have 2 people together who save, then it can be achieved in a shorter time frame or they could get end up with a much larger deposit. These are the people you are competing with.

we still do!

PokeHerKing

Anyone have a comparison of home ownership over the past 50 years? Adjusted for increase in population etc?

I feel it would be a much better comparison than these tweets were somebody simply states 'adjusted for inflation', like that's all that needs to be taken into account.

There should be a pretty seismic difference if the Oliver twists of this thread are correct?

SusieBlue

SusieBlue wrote: »

I don’t know anyone on 86k and I’m struggling trying to think of a couple that jointly earn that much. It prices out the vast majority of buyers.
These aren’t 5 star turn key properties either, these are bog standard properties, many of which would definitely require some work and aren’t located in sought after areas.

.

There are plenty of people on 80k+ but granted they would be less common than those on lower wages.

A couple combined on 86k would be very common though. Its only 46k and 40k per year (or what ever other load of ways it could be divided 51k and 35k etc. These types of salaries would not be rare at all to be honest.

The fact people are buying these houses and getting into bidding wars on them sort of shows that there are more people who can afford the houses than there are houses available.

That being said I do think the 3.5 times salary is far too low, people can afford much more than this in a mortgage as can be shown by the fact people are paying rent at much higher levels.

Wanderer78 wrote: »

we still do!

The easy availability of credit is vital in a functioning society, there has to be some precautions in lending it but I dont see any reason to curtail it once precautions are met.

This goes for both business and personal lending.

GreeBo

Leilani Fast Windbreak wrote: »

Built a house on family owned land. I was in my 20’s before the farm was passed on to my father it’s only a side business.

One difference compared to some though is it was always a dual income home. My mother was not a stay at home mother like many would have been back then.

Most of my neighbours would have been similar also, most were two income households in the early 80’s etc.

Just to add I’m far from saying we were rolling in money but my parents were not afraid to borrow money for stuff etc to give us a very good life growing up.

Building a house on family land is kinda different.

HerrKuehn

Leilani Fast Windbreak wrote: »

The easy availability of credit is vital in a functioning society, there has to be some precautions in lending it but I dont see any reason to curtail it once precautions are met.

This goes for both business and personal lending.

An important factor in Ireland is that mortgages are practically unsecured loans. It is extremely difficult for the bank to repossess.

SusieBlue

HerrKuehn wrote: »

A couple on average incomes could afford a property in your area. We tried the easy credit during the mid noughties and it didnt work out very well in the end, you may remember. Someone on 40k, could live in a house share and should be able to save 1k per month in my opinion. So, 5 years and you have 60k. If you have 2 people together who save, then it can be achieved in a shorter time frame or they could get end up with a much larger deposit. These are the people you are competing with.

A couple on the average wage would still fall 8k short of being eligible for the average property.
Anecdotally, I’m not anywhere near the average wage, nor was my ex.
And out of my group of friends of 7 women in their late 20’s, all degree educated, one friend is on the average wage or higher. Most are on around 29-32k. One is on 24k (crèche supervisor).
So even though it’s the average figure, I do believe that a few very high earners pushed up the number and the reality is actually a lot lower.

But regardless, it goes back to my original point.
What of the single people? And what of the low earners?
It’s easy to just say do a good degree, get a great job, meet someone, and jointly apply, but it’s a really lazy solution. It’s the modern equivalent of saying ‘let them eat cake’.
Because life is quite different. There will always be low earners and there will always be people who remain single, for whatever reason.
That’s just how society is, and these people need to have options too. Not the same options as the high earners, granted.
But they are just as worthy of having decent affordable accommodation as the person who was lucky enough to tick everything off on their bucket list and get the great degree, amazing job and meet their life partner at a young age (if at all).

The solution seems to be to sneer at people and tell them they should have made better choices, and that’s a total cop out.
We deserve better than what’s currently being offered. It simply isn’t fair, realistic or sustainable.
And only for the good grace of Irish parents allowing their adult kids remain in their family homes well into their 30’s, we would have a massive issue with homeless young people in this country.

GreeBo

lainey_d_123 wrote: »

My life was like that as well. Except we didn't see it as a hardship because that's the way everyone lived. Flying was incredibly expensive - even a flight to Spain for one single person would probably be more than the mortgage payment, so we never went. Hardly comparable to being able to book a 30 euro Ryanair flight, is it? You must have been especially destitute if your family could never afford even a CD at any point. We bought a second hand CD player in the 90s and bought CDs from time to time. I remember buying a few as a teenager and one single CD was the same price as several months of Netflix or Spotify today.

I didn't say I had £200 a month left over. I see reading ability is in short supply around here. I said I had £200 a month IN ADDITION to what I was already saving each month. Meaning that even being confined to the house and not taking any public transport, no coffees, no lunches, no pub trips, absolutely nothing, that's the only saving I made, showing that any notion that I was living it up and wasting money before is absolute horsesh1t. About £120 of that would have been essential travel to work (it's not safe nor possible for me to cycle all the time), showing just how little I spent on 'luxuries' day to day. My rent is over five times that amount. Do you see where the problem lies? That extra 200 a month is obviously going straight into savings - every little helps, and all that, believe me I am VERY frugal, but it's £2400 (and actually only £960 if you count what was truly 'disposable income') over the year, vs over £14000 spent on rent and bills. Do you not see how the 'little things' are not the problem here?

The simple problem is that your rent is too high for how much you earn.
So earn more, spend less or just accept it.

BTW your attitude to living in Dublin 6 or even Dublin seems to have changed?

lainey_d_123 wrote: »

Who cares? People are people. Nobody has a God given right to live in Dublin and the only people I know who think that are Irish born wasters who have thinks like 'Job: full time mammy' on their Facebook profiles and have never worked a day in their lives.

GreeBo

Harry lyme wrote: »

Because there is no way on hell what they did was responsible lending.

Obviously my parents are the ones to blame but lenders are supposed to be prudent and do checks to see if the people taking out the loan could actually repay it (Which of course my parents couldn't) as if they can't it's not exactly good for the bank .

And your parents shouldnt be on the hook for responsible borrowing?

Smee_Again

Leilani Fast Windbreak wrote: »

There are plenty of people on 80k+ but granted they would be less common than those on lower wages.

A couple combined on 86k would be very common though. Its only 46k and 40k per year (or what ever other load of ways it could be divided 51k and 35k etc. These types of salaries would not be rare at all to be honest.

The fact people are buying these houses and getting into bidding wars on them sort of shows that there are more people who can afford the houses than there are houses available.

That being said I do think the 3.5 times salary is far too low, people can afford much more than this in a mortgage as can be shown by the fact people are paying rent at much higher levels.

77.4% of households in Ireland have total household earnings below €80K, so not that common.

HerrKuehn

SusieBlue wrote: »

A couple on the average wage would still fall 8k short of being eligible for the average property.
Anecdotally, I’m not anywhere near the average wage, nor was my ex.
And out of my group of friends of 7 women in their late 20’s, all degree educated, one friend is on the average wage or higher. Most are on around 29-32k. One is on 24k (crèche supervisor).
So even though it’s the average figure, I do believe that a few very high earners pushed up the number and the reality is actually a lot lower.

But regardless, it goes back to my original point.
What of the single people? And what of the low earners?
It’s easy to just say do a good degree, get a great job, meet someone, and jointly apply, but it’s a really lazy solution. It’s the modern equivalent of saying ‘let them eat cake’.
Because life is quite different. There will always be low earners and there will always be people who remain single, for whatever reason.
That’s just how society is, and these people need to have options too. Not the same options as the high earners, granted.
But they are just as worthy of having decent affordable accommodation as the person who was lucky enough to tick everything off on their bucket list and get the great degree, amazing job and meet their life partner at a young age (if at all).

The solution seems to be to sneer at people and tell them they should have made better choices, and that’s a total cop out.
We deserve better than what’s currently being offered. It simply isn’t fair, realistic or sustainable.
And only for the good grace of Irish parents allowing their adult kids remain in their family homes well into their 30’s, we would have a massive issue with homeless young people in this country.

The solution is surely that those who for whatever reason can't afford to buy, rent instead.

Lillyfae

Harry lyme wrote: »

Because there is no way on hell what they did was responsible lending.

Obviously my parents are the ones to blame but lenders are supposed to be prudent and do checks to see if the people taking out the loan could actually repay it (Which of course my parents couldn't) as if they can't it's not exactly good for the bank .

GreeBo wrote: »

And your parents shouldnt be on the hook for responsible borrowing?

That's exactly what he just said.

Sometimes I think there should be entrance exams for boards.ie

lainey_d_123

GreeBo wrote: »

Sure, I'm the one babbling and parroting about how its unfair that I cant afford to buy where I want when I left home at 18 with a ****ty degree and no job.

Not even Willy Wonka lives in that sort of dreamworld.

You just sound unhinged now.

Dreamworld?!

I left home at 18 and went to Trinity, you absolute mentalist. I got the highest points in my school in the leaving and graduated with a first class degree (while also having a part time job the whole way through college and working every summer), so what the fck is your obsession with me 'leaving home' at 18?

You think I should be punished for having no choice but to rent during college and afterwards? Like, what even is your actual point?

SusieBlue

HerrKuehn wrote: »

The solution is surely that those who for whatever reason can't afford to buy, rent instead.

And we’ve come full circle. This would be a definitely be suitable solution that I’d be supportive of if rent wasn’t extortionate and there was more security for tenants.

Paying €1800 pm for your whole life and into retirement years is not possible for someone on a low wage.
Moving every couple of years, looking for a new property because your landlord is ‘selling up’, or wants to raise the rent another 4%, is no way to live for your whole life.

How will a pension cover that kind of rent?
How will someone even have a pension in the first place when the majority of their modest income is being frittered on renting a property they will never ever have a claim to?

This is the problem. It’s not sustainable, not fair, and it’s not something any of us should be ok with. It’s a disgraceful system that hurts low earners the most and there’s something very wrong about that.

Harry lyme

Harry lyme wrote: »

My story.

After my father got his redundancy (a redundancy he wanted) from his job in the early 2000's they instead of doing the sensible thing of using the money to clear our mortgage (which only an idiot wouldn't do) they remortgaged our house and bought a house in a neighbouring village and rented it out.They somehow managed to sell this house in around 2007 and then despite having a warning already ( by just barely being able to sell the house) they once again refused to pay off the mortgage and then bought an investment property in Spain.Of course this investment tanked as it was almost certainly a scam and it means that despite living in the house since 1997 the full value of the initial mortgage still has to be repaid .

This means I have to pay the mortgage or my parents are homeless and therefore I am stuck living with my parents until they are dead and their sheer idiocy and selfishness has ruined my life and caused my enourmous amount of stress and hopelessness. What exacerbates this is we live in a very rural area and I'm very shy individual so whatever chance I had to grow as a person is not helped by being stuck in a very rural area with little scope for social interaction compared to being in a urban area. What they have done to me is a disgrace (the fact the banks allowed them to so is incredible) and the fact that they even asked me to pay the mortgage now is incredibly selfish and really makes me very angry.

Just thought I'd share this as an example of the boomer generation getting carried away during the Celtic Tiger and expecting the next generation to pick up the pieces for them.

GreeBo wrote: »

And your parents shouldnt be on the hook for responsible borrowing?

Your reading skills are appalling. I have included my full initial post so you can clearly see the bit where I state that what my parents did was idiotic,selfish and a disgrace.

Former Former

Smee_Again wrote: »

77.4% of households in Ireland have total household earnings below €80K, so not that common.

I presume that's all households. Retired people, single people, single income families, welfare recipients, everyone.

A couple, both working, whose combined income is below 80k should think long and hard about buying because at that level of income, your ability to withstand a financial shock is pretty low.

lainey_d_123

GreeBo wrote: »

The simple problem is that your rent is too high for how much you earn.
So earn more, spend less or just accept it.

BTW your attitude to living in Dublin 6 or even Dublin seems to have changed?

I've no interest in living in Dublin. You invented that entire story in your own head.

lainey_d_123

Harry lyme wrote: »

Your reading skills are appalling. I have included my full initial post so you can clearly see the bit where I state that what my parents did was idiotic,selfish and a disgrace.

Glad someone else has noticed.

It's like trying to reason with a toddler. Appalling lack of reading ability and common sense.

SusieBlue

Former Former wrote: »

I presume that's all households. Retired people, single people, single income families, welfare recipients, everyone.

A couple, both working, whose combined income is below 80k should think long and hard about buying because at that level of income, your ability to withstand a financial shock is pretty low.

If they can’t buy then the alternative is to spend the majority of their income on rent with zero security, where they’ll be out on their ear if they miss a payment. A payment they might not miss if their monthly payment was €900 rather than €1800.
How is that more favourable?

I’d love to know where all these couples earning 80k because it’s definitely not as common as is being made out here. Most earn well below that.

lainey_d_123

lainey_d_123 wrote: »

You just sound unhinged now.

Dreamworld?!

I left home at 18 and went to Trinity, you absolute mentalist. I got the highest points in my school in the leaving and graduated with a first class degree (while also having a part time job the whole way through college and working every summer), so what the fck is your obsession with me 'leaving home' at 18?

You think I should be punished for having no choice but to rent during college and afterwards? Like, what even is your actual point?

Well in-fairness you didn't have to go to trinity you could have gone to a closer university and stayed living at home.

I didn't even apply to any 3rd level institute bar the two which I could easily commute to from home.

GreeBo

Lillyfae wrote: »

That's exactly what he just said.

Sometimes I think there should be entrance exams for boards.ie

Ah he then went and threw in the big "but" and went on to blame the banks.

Reading to the end of a sentence is very important, especially when taking exams..

lainey_d_123

Leilani Fast Windbreak wrote: »

Well in-fairness you didn't have to go to trinity you could have gone to a closer university and stayed living at home.

I didn't even apply to any 3rd level institute bar the two which I could easily commute to from home.

I literally feel like banging my head off a table.

Can nobody around here actually read?

I'm from Dublin. I could have commuted there no bother, except I couldn't live at home because of family issues including mental illness, abuse and alcoholism. I was asked to pack my bags as soon as I turned 18. Not everyone has a nice, lovely safe home they can live in until they're 30 or when they feel like moving out.

It must be so nice to be as sheltered as you are, Nox. I can't imagine it.

GreeBo

lainey_d_123 wrote: »

I've no interest in living in Dublin. You invented that entire story in your own head.

*YOU* brought Dublin 6 into the thread as "a normal place" where normal people should be able to live.

I can go quote the posts for you again if you have forgotten what you said?