Why do renters equate the ability to pay rent to mortgage eligibility?

Zaney

...Ghost... wrote: »

This exactly. It's far more difficult to buy now. In the 1980s, someone working in a menial job could knuckle down, save and get a mortgage on a house even if it was in Dublin City Centre. At the turn of the century, it pretty much became a requirement that 2 people had to apply. 10 years later and after the crash, unless you are very lucky, you need to be a professional couple earning well over 100k to buy in Dublin.

As a parent, I can't encourage my kids to consider anything that won't give them the best possible chance at buying a home in Dublin...where they live. It's a disgrace that parents have to leave their children into a creche or that they have to consider how having children will impact their chances of buying, or even moving in the future. Having purchased a number of years ago, changing vocation and having kids, the banks refused to let us move because we would have been taking out a new mortgage (same value, same repayment), but now they would account for the kids which locked us into our current location. Ridiculous carry on.

In the second half of the 80’s the population fell. Lots of people couldn’t afford a house or rent - they emigrated.

For Forks Sake

For Forks Sake wrote: »

So were interest rates of 13-18%, so swings and roundabouts.

High interest rates on a low capital is better than low interest on high capital.
Any extra cash paid into the first scenario has a much greater impact.


People so conviently forget the massive wage inflation, of the 90s, where you were soon paying more salary on a 2nd hand car loan than on a mortgage

...Ghost...

Zaney wrote: »

In the second half of the 80’s the population fell. Lots of people couldn’t afford a house or rent - they emigrated.

But for those who had a job....basically any job, they were in a position to buy a typical 3 bed semi in Dublin with a mortgage term of 15 to 20 years.

People wanted better opportunities, not just any opportunity. Emigration was not just about a lack of jobs.

Flinty997

I love the way this thread has reinvented the 80s Ireland as land of opportunity, streets planned with gold and houses for all.

Recession, high unemployment, high emigration, high crime rates all dismissed.

https://www.thejournal.ie/crumlin-garda-station-burglaries-state-papers-4928368-Jan2020/

ineedeuro

Flinty997 wrote: »

I love the way this thread has reinvented the 80s Ireland as land of opportunity, streets planned with gold and houses for all.

Recession, high unemployment, high emigration, high crime rates all dismissed.

https://www.thejournal.ie/crumlin-garda-station-burglaries-state-papers-4928368-Jan2020/

Ireland was a sh*thole in the 80's.
Some would argue it is a still a sh*thole, just a different type of one.

Flinty997

Flinty997 wrote: »

I love the way this thread has reinvented the 80s Ireland as land of opportunity, streets planned with gold and houses for all.

Recession, high unemployment, high emigration, high crime rates all dismissed.

https://www.thejournal.ie/crumlin-garda-station-burglaries-state-papers-4928368-Jan2020/

Is this your explanation as to why the house price to income ratio changed across Ireland and the OECD since the 1980s? It was crime in Crumlin? or high unemployment in Ireland ?

Ireland wasnt the land of milk and honey but it did have affordable housing, at least for those who worked. Why is that so hard to comprehend for you? Today we cant exactly say we have anything comparable. We need twice the amount of people working to buy a house...........if you even can. That house is likely smaller and further away than those who bought in the 1980s.

Its not a hard thing to google, Source:
Figure HM1.2.1: Development of house prices, OECD average, 1996-2020
https://www.oecd.org/els/family/HM1-2-Housing-prices.pdf

• For those who had work in Ireland in the 80s they had permanent secure work for the most part, no contract to contract for the masses like today.
  
• They were able to raise a family and pay off a house on a SINGLE wage - a huge huge step change from today.
  
• 10% pay rises on average a YEAR
  
• High interest rates on small capital amounts which because of the pay increases turned into something more similar to a car loan after a few years.

Flinty997

I already did acknowledge the affordability issue.

Flinty997 wrote: »

There's no doubt wages fell far behind the cost of housing.

I'm just saying housing wasn't the issue it is now. You could rent cheaper than buying, lots of social housing. It's wasnt a measure of wealth it has become, or a primary objective of many. But it wasn't a simple as anyone who wanted one could get one. Getting a mortgage was still hard and the banks had tough rules just like now.

If you a builder selling houses, they took a while to sell and often fell through just as they do today. You could end up going sale agreed a few times before getting a house sold.

Gradius

"Supply and demand" is the cliche used to justify exorbitant accommodation prices.

But rarely is it correctly identified as the actual problem.

We are a tiny country.

There are so many people from all over the world trying to squeeze in, it demolishes supply.

They can keep excusing the problem by waffling about how many homes they are/aren't, should/can't be building, but it will never be enough. Never.

Planet Earth > Ireland

If you want to stop, or at least ameliorate, the housing crisis in this tiny country, we have to reduce the amount of people.

A crazy concept of sustainability, forethought, planning and governance!

The next time someone mentions the building of homes (nee pyramid scheme) as a solution to you, tell them to snap out of it.

Potential-Monke

Potential-Monke wrote: »

I thought I was one of those people, paying x amount per month and it more than my colleagues mortgages. So I eventually got one.

I think there are benefits to renting, but mortgages also come with big benefits.


For example, your interest rate causing your mortgage to double would surely impact on the rent, if your landlord had the same issue.


Also, even at 200p/m cheaper, that's €2,400 per year you can spend on maintaining the house without it actually costing you anything, VS renting.


On top of that, and this is the thing that I get concerned about as a self employed person (but probably isn't an issue if you're a public servant with a decent pension), a mortgage will eventually end. There's a date in the future where you don't have to pay it anymore. With renting, you're paying a monthly figure into retirement and death. That's a very daunting aspect for many people.

Flinty997

Flinty997 wrote: »

I already did acknowledge the affordability issue.



I'm just saying housing wasn't the issue it is now. You could rent cheaper than buying, lots of social housing. It's wasnt a measure of wealth it has become, or a primary objective of many. But it wasn't a simple as anyone who wanted one could get one. Getting a mortgage was still hard and the banks had tough rules just like now.

If you a builder selling houses, they took a while to sell and often fell through just as they do today. You could end up going sale agreed a few times before getting a house sold.

The home ownership rate in Ireland was higher in the 80s than today despite the recession , unemployment etc.

You can be poor and have a higher home ownership rate , you can also be a rich country and have a high ownership rate. It's not the determining factor.

https://www.finfacts-blog.com/2021/02/key-irish-housing-statistics-1971-2020.html?m=1

https://www.google.com/amp/s/www.irishtimes.com/news/ireland/irish-news/the-changing-face-of-irish-home-ownership-who-wins-who-loses-1.3850954%3fmode=amp

It clearly was easier in the 80s to own a home, despite the tighter lending, recession, unemployment etc

Flinty997

[Deleted User] wrote: »

The home ownership rate in Ireland was higher in the 80s than today despite the recession , unemployment etc.

You can be poor and have a higher home ownership rate , you can also be a rich country and have a high ownership rate. It's not the determining factor.

https://www.finfacts-blog.com/2021/02/key-irish-housing-statistics-1971-2020.html?m=1

https://www.google.com/amp/s/www.irishtimes.com/news/ireland/irish-news/the-changing-face-of-irish-home-ownership-who-wins-who-loses-1.3850954%3fmode=amp

It clearly was easier in the 80s to own a home, despite the tighter lending, recession, unemployment etc

Your links say this was mostly driven by the govt incentives especially in selling social housing to tenants.

“It was really giving people property as a form of welfare, rather than redistributing income as they did in other countries,”

...

GreeBo

...Ghost... wrote: »

This exactly. It's far more difficult to buy now. In the 1980s, someone working in a menial job could knuckle down, save and get a mortgage on a house even if it was in Dublin City Centre. At the turn of the century, it pretty much became a requirement that 2 people had to apply. 10 years later and after the crash, unless you are very lucky, you need to be a professional couple earning well over 100k to buy in Dublin.

As a parent, I can't encourage my kids to consider anything that won't give them the best possible chance at buying a home in Dublin...where they live. It's a disgrace that parents have to leave their children into a creche or that they have to consider how having children will impact their chances of buying, or even moving in the future. Having purchased a number of years ago, changing vocation and having kids, the banks refused to let us move because we would have been taking out a new mortgage (same value, same repayment), but now they would account for the kids which locked us into our current location. Ridiculous carry on.

There are nearly 2 million more people today than in 1980, so demand has massively increased, of course its going to be harder to get what you want, where you want.

GreeBo

Deleted User wrote: »

The home ownership rate in Ireland was higher in the 80s than today despite the recession , unemployment etc.

You can be poor and have a higher home ownership rate , you can also be a rich country and have a high ownership rate. It's not the determining factor.

https://www.finfacts-blog.com/2021/02/key-irish-housing-statistics-1971-2020.html?m=1

https://www.google.com/amp/s/www.irishtimes.com/news/ireland/irish-news/the-changing-face-of-irish-home-ownership-who-wins-who-loses-1.3850954%3fmode=amp

It clearly was easier in the 80s to own a home, despite the tighter lending, recession, unemployment etc

See above, far fewer people trying to buy back then.
We have increased population and those people have more money, yet we havent managed to increase the size of the country.
Its logical that housing costs increase over time, its a limited resource.