Irish Property Market chat II - *read mod note post #1 before posting*

timmyntc

https://www.boards.ie/discussion/comment/119243167#Comment_119243167

No reason this would affect lender confidence - mortgages here are already stress tested rigorously and very low risk from a lender perspective.

Only if we started to see mass layoffs would lender confidence start to go

jj880

https://www.thejournal.ie/euro-zone-recession-cost-of-living-5798818-Jun2022/

Soft landing talk if I've ever heard it.

mcsean2163

I remember living in a part of Cambridge. I was amazed how many old houses were derelict in the centre of the village.

It turned out an old man owned about half the village. His reason for not selling was that when they're gone they're gone. He was plenty rich and I guess he just liked owning the houses, didn't care they were vacant and in several instances becoming derelict.

A vacant house tax might stop that type of carry on.

Villa05

One of those snaky Friday press releases

A rather expensive vote buying, developer feeding, inflation fueling program

A report from the Parliamentary Budget Office (PBO) also found that 63% of HTB claims were used to buy homes above the average national house price.

The report also found that one third of those who availed of the scheme did not need it to meet the 10% deposit requirement for a mortgage. Instead, Help-to-Buy enabled them to create larger deposits.

The report states: "This increased the purchasing power of FTBs, which fuelled property inflation and created a dead weight loss.

The report states: "This increased the purchasing power of FTBs, which fuelled property inflation and created a dead weight loss."

https://www.rte.ie/news/business/2022/0624/1306728-help-to-buy-scheme-cost-43-more-than-estimated/

mcsean2163

https://www.boards.ie/discussion/comment/119239575#Comment_119239575

Got that wrong. https://www.breakingnews.ie/ireland/number-of-ukraine-refugees-in-ireland-nears-39000-1324542.html

Russian invasion has pushed up refugees in the last two weeks. Very sad reading, must be very tough leaving everything husband/family etc. to come here. Really need to get our act together to help these people before winter comes

I remember Mellon or someone like that used to fundraise and built homes in Africa for free using volunteers. Maybe we need to do something similar in Ireland to help the Ukranian people?

Bass Reeves

PTSB to absorb first two rounds if interest increases to increase market share. Therefore there customers will print see no interest hike in 2022

https://www.rte.ie/news/business/2022/0624/1306669-permanent-tsb-egm-approves-deal/

will other banks and mortgage lenders following suit

iColdFusion

https://www.boards.ie/discussion/comment/119244958#Comment_119244958

Link below to the report, the national average house price they are quoting is 301k, not exactly astounding that 63% of NEW homes in 2021 were above that threshold considering the main volume of HTB applications will be around the main cities and commuter suburbs.

301k minus 10% deposit is still a combined income of 78grand x 3.5, that's still two decent salaries, so people would definitely be stretched without HTB.

Note also from the opening page quotes two other reports saying HTB has only resulted in a small price increase to the market.

https://data.oireachtas.ie/ie/oireachtas/parliamentaryBudgetOffice/2022/2022-06-24_an-overview-of-the-help-to-buy-scheme-from-2016-2021_en.pdf

wassie

https://www.boards.ie/discussion/comment/119245035#Comment_119245035

will other banks and mortgage lenders following suit

Doubtful given the lack of compeition in this country for mortgage lending.

Sierra Oscar

https://www.boards.ie/discussion/comment/119245663#Comment_119245663

I wouldn't be hugely surprised if they aren't the only ones to absorb the initial round of rate rises. Irish banks have more room for manoeuvre when it comes to absorbing rate rises considering we already have some of the highest interest rates in the EU.

The banks justified the higher rates due to the percentage of non-performing loans following the financial crisis, but that's a long time ago now. All of the banks have seriously tidied up their loan books - they've been lowering interest rates but still fleecing customers. So yeah, they do have room to manoeuvre.

Account holders also have a serious amount of cash on deposit and the banks have been paying a hefty price to the ECB due to negative interest rates. As the article points out, the rate rises are actually a positive for the Irish banks in that they will no longer be penalised as much for having a high volume of deposits. Irish people like their savings and this has negatively impacted on the banks for years now, but that pressure is set to be alleviated.

The mortgage providers that came into the market and under cut traditional providers will be under pressure to raise rates, and we've already seen this happen. The mainstream banks won't be under much pressure though and you'll probably see them use this as an opportunity to win back market share - as PTSB intend on doing.

PTSB lowered their interest rates as recently as last month when it was apparent that ECB interest rate rises were pretty inevitable in the not too distant future.

Mr Hindley

Total supply on Daft now over 17,000 - it's going up pretty consistently, at the rate of ~1,000 every 3-4 weeks. Below is a graph based on my own recordings (I stopped taking notes in Q4 2022 so a lack of data there.)

I viewed 6 properties this week, 4 of the 6 were ex-rentals with the landlord getting out of the business. God help any poor sod trying to find somewhere to rent, at least until all the new apartments being built come onto the market.

drogon.

https://www.boards.ie/discussion/comment/119245035#Comment_119245035

Ah but the crucial thing there is - they may absorb and not will absorb.

That being said I would give it a good 90% they won't increase it for the 6 months left in the year.

Villa05

https://www.boards.ie/discussion/comment/119245128#Comment_119245128

I'd question whether the figure of 33% of applicants not needing the grant to meet the deposit is realistic. If your applying for a grant will you be declaring all your savings for the process. A UK survey found that 2 thirds of applicants did not need the grant for a similar scheme.

Note also from the opening page quotes two other reports saying HTB has only resulted in a small price increase to the market.

Notable that those 2 reports were done in 2017 and 2021 coinciding with Brexit and COVID, 2 issues that were expected to have a negative effect on price.

Also notable that the average claim which is a percentage of the house price purchased almost doubled in the 5 years between 2017 (13,000) & 2021 (24,000+)

Villa05

The man is becoming a bit of a legend, fair play to him

The next stage of the inflation cycle begins

https://www.thejournal.ie/mick-lynch-union-leader-profile-irish-5797821-Jun2022/

https://twitter.com/PiersUncensored/status/1539687902166261763?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1539687902166261763%7Ctwgr%5E%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.thejournal.ie%2Fmick-lynch-union-leader-profile-irish-5797821-Jun2022%2F

https://twitter.com/GaryLineker/status/1540103222999896065?s=20&t=xp6c7uVHAARAHeEODE0CeQ

combat14

‘Game-changer’ First Home scheme to help bridge gap for squeezed middle home buyers

https://m.independent.ie/business/personal-finance/property-mortgages/game-changer-first-home-scheme-to-help-bridge-gap-for-squeezed-middle-home-buyers-41793134.html

It is designed to bridge the gap for those whose "income is too low" to get them "a big enough" mortgage to buy their first home.

Typical beneficiaries of the scheme would be a couple with an income of €70,000, who want to buy a €320,000 new home.

After putting up a 10pc deposit, the most they can borrow is €277,000. This leaves "a gap" of €43,000.

The three main banks have signed up to the scheme which will see the State providing an interest-free stake of up to 30pc in the home.

one could argue perhaps people's incomes here are not too low .. many other countries differ on that .. perhaps the real problem is that house prices here are far too high ..... over valued even as alluded to obliquely by the ESRI last week .. this is just unfortunately another popular measure by government to artificially drive prices even higher .. once again the tax payer is paying the bill to further distort the market...

Dav010

Two other important stories in Indo, continued rise in house prices and that 30% of houses for sale in Dublin are landlords leaving the market.

https://m.independent.ie/irish-news/landlord-exodus-helps-cool-house-price-rises-but-price-of-three-bed-semi-in-dublin-heading-for-500000-41793136.html

rob316

Builders will sign up in their droves to this and will further inflate prices. It's more developer led nonsense to subsidize the market. New homes are been snapped up in minutes as is.

combat14

Landlord exodus helps cool house price rises

A flood of landlord-owned homes coming to market is helping to cool house price inflation in some parts of the country, with almost a third of all homes for sale in certain areas now accounted for by landlords exiting real estate or reducing their holdings.

At the same time, coming hikes in interest rates and a worsening economic outlook are also expected to add to a cooling in the rate of inflation in the months ahead.

https://m.independent.ie/irish-news/landlord-exodus-helps-cool-house-price-rises-but-price-of-three-bed-semi-in-dublin-heading-for-500000-41793136.html

The biggest factor on the market in the last quarter is the increasing proportion of sales from private landlords.”

One Dublin agent warned of the knock-on effect on the country’s workforce of the shrinking rental market as 30pc of his vendors are now private landlords selling up.

“As a result, we have people leaving the country because they cannot find accommodation when their landlord decides to sell, and this will affect the available workforce in the long-term,” said Anthony McGee, REA McGee Tallaght.

CorkRed93

https://www.boards.ie/discussion/comment/119255422#Comment_119255422

its deliberate at this stage. they'll never change.

Sierra Oscar

Latest Daft report is out, available to read here. Covers March to June.

https://www.thejournal.ie/daft-report-house-prices-5800407-Jun2022/

amacca

Good god, there will have to be a mechanism to block govt intervention in housing here after this eventually blows up in everyone's faces.

Villa05

https://www.boards.ie/discussion/comment/119255422#Comment_119255422

The worst scheme at the worst possible time, similar to 110% mortgages before the 08 crash. Demand brought forwad

This time its different!

The minister is still spouting this spiel

“This is €75m a year out of a €15bn mortgage market. It is a tiny percentage and it is targeted and calibrated,” Mr O’Brien said.

First of all the HTB scheme is 50% over budget, expect the same. if not more here

75m will be on average say 20% of the house price bring that to 90% for the total mortgage state + Bank and that's well over 300million

Total mortgage market of 15billion includes existing homes. This scheme is only available for new builds. Only a third of new builds are made available for sale to the public so this scheme will have a significant impact on the already distorted new build market.

The new build market is now almost completely detached from what buyers can afford through this scheme, 0 tax investment funds, social housing purchase and long term leasing leaving very little for those that wish to go out and purchase off their own backs.

The final wind in the bubble, maximising the damage of the next crash when it comes

combat14

https://www.boards.ie/discussion/comment/119256092#Comment_119256092

and the icing on the artificial house price intervention cake ...

buyers can top up the "first buyers" scheme by tagging on the "help to buy" ..

"This couple could also benefit from the State’s Help-To-Buy scheme, which usually provides tax relief of up to 20pc of the property’s value"

sounds like there are far too many "schemes" .. the market is clearly over valued if buyers require multiple methods of assistance to buy houses .. either that or it is clear the government are not protecting first time buyers from rampant vulture funds ..

Villa05

Does anyone know how they are determining the cost of the scheme.

Is it the proportion of the stake the state is taking in the house or the interest element or both

Does the stake have to be paid back by the recepient like a mortgage or is it recouped on sale or could it even be a gift

hometruths

The Currency looks to have uncovered some interesting HAP facts.

"HAP pays half a billion euro to landlords each year. We reveal its largest corporate recipients. The Housing Assistance Payment is one of the state’s largest subsidy schemes, yet the identity of its recipients has been a well-guarded secret. Data obtained through a freedom of information request lifts a corner of the veil."

Sadly my sub expired. Does anybody have a currency sub?

 https://thecurrency.news/articles/88234/hap-pays-half-a-billion-euro-to-landlords-each-year-we-reveal-its-largest-corporate-recipients/

awec

https://www.boards.ie/discussion/comment/119256536#Comment_119256536

It sounds very similar to the UK scheme, if not identical.

The way the UK one works is the government take an stake in the house. They don't charge you interest for 5 years. After 5 years you start paying interest. You need to buy out the government by the time you sell the house, or when you finish paying the mortgage, or after 25 years, whichever comes first.

It's not "paying back the stake", you are buying them out. They own equity in your house, so the value of what you owe them changes with the value of the house.

So if they give you 40k today which represents 10% equity (i.e. a 400k house), and you sell it in 5 years time for 600k, you will owe the government 60k (assuming you have not bought out any of their stake in the meantime).

markodaly

https://www.boards.ie/discussion/comment/119255723#Comment_119255723

The daft report makes it clear that the supply of homes for sale is increasing back to pre-Covid levels. May take another while yet but it seems to be getting there.

Mic 1972

https://www.boards.ie/discussion/comment/119255723#Comment_119255723

Thanks!

I must say, reading the last few pages I was expecting Q2 prices to slow down, instead they have been increasing as usual.

L1011

Had to delete that article dump + quotes, copyright doesn't allow for that.

LJ12345

https://www.boards.ie/discussion/comment/119259105#Comment_119259105

I haven’t read the entire report but don’t be fooled by these as they’re reflecting asking prices. EA’s will change tactics depending on markets and you’ll notice a move from pricing low to drum up a bidding war to pricing at their valuation or above to appease the vendor.

https://www.boards.ie/discussion/comment/119255422#Comment_119255422

New builds in Dublin are marked as POA but are probably worth over half a million, so dont know how useful this is going to be