Softening house market?

keoclassic

https://www.boards.ie/discussion/comment/119057850#Comment_119057850

You are nearly an exact replica of thousands upon thousands of working Irish people in terms of age and salary. Some people seem to thí k you are not tryi g hard enough or you need to make more money. What they want of you is spend your life working for a 1 or 2 bed apartment and be happy with that. I wonder if they are in the same position? The reality is that the current system is not working for people like you or me, but it is working for the wealthy and landowners who can build away themselves. It's working for institutional landlords and its working for councils and local authorities because its your tax that is being used to fund it all. Its beyond disgusting what us going on and the sooner it goes bang the better. No ody wants a full on recession to happen, but it seems its the only thing that ever corrects our housing market. Nobody ever seems to give a **** about the human cost of all this bullshit.

macvin

https://www.boards.ie/discussion/comment/119059945#Comment_119059945

I remember the last time, the time before and the time before that.

In 1987 you could get a south Dublin 3 bed semi for £35,000. That house today will cost €600,000

In 1987 interest rates were 12%. A good salary was £15,000, (TD's were £16500) tax crucified you and you took home just over £8,500.

Your mortgage payments were just over £4,000 a year.

Similar job these days pays €75,000, your take home pay is circa €50,000. Your mortgage payments based on 90% ltv (if you were allowed the multiple) would be about €25k. Not far off the equiv % of the doldrums of 1987.

Same can be said for the boom and those who have tracker mortgages. They will pay less overall than those who bought in all years since except possibly the two bottom years of 2012 & 2013.

And in example above - the poster is 37 and single. Even if he hooked up, one child is probably more than enough. A 2 bed apartment will be sufficient and as I said, there's a good stock under 300k even in south Dublin.

Also the avant 25 & 30 year mortgage is moveable. So if he did want to move to the "3bed semi" the only variable is the extra mortgage amount he requires - and he'd have a second income in the calculation

landofthetree

https://www.boards.ie/discussion/comment/119059778#Comment_119059778

Oh it can get a lot worse. Things can always get a lot worse. Just ask anybody from Venezuela.

macvin

https://www.boards.ie/discussion/comment/119059923#Comment_119059923

US is very comparable as they started raising interest rates first and even since January the 30 year fixed has jumped 2 points from 3.5% to 5.5%. ECB will start raising rate in July and if inflation does not cool they will have to raise agressively

Avant is the spanish bank that came here (Bank Inter) As in my other post, they are offering 25 year and 30 year FIXED rates of 2.5%. The rate is also moveable if you move house.

It is a phenomenal rate for a long fixed term and being able to move it makes it utterly unbeatable in todays market. Only drawback is you can't overpay - but in reality not a huge number of people do that and increasing pension contributions is a better option for spare cash.

Donald Trump

https://www.boards.ie/discussion/comment/119060029#Comment_119060029

You can't be mixing up fixed rates with variable rates unless you can give me the current swap rate.

US mortgage market a completely different beast due to non-recourse loans and ease of repossession

porkmaster

https://www.boards.ie/discussion/comment/119059997#Comment_119059997

It's pyramidal shaped alright.

A couple of friends working in USA on excellent wages, personally sorted for life. The stories they tell me.

One, just recently, was saying how his broker is telling him to get in on a reit that's involved in Ireland. Lots of money to be made.

His attitude was that he couldn't do such a thing to his own people. He won't touch those sort of things. As best I remember, his overall question of people living here was "so they're just going to march like cattle back into tenement housing?"

He's not wrong, there are growing parallels between the English Lord class and how the majority of Irish people were ushered into tiny allotments of poverty on vast 300,000 acre properties.

You know how that worked out, something of a similar parallel will happen with this housing situation too, it'll be a case of enough is enough, time to leave, the party is over, bye bye landowners.

There'll be no tweaking our way out of this situation. It's gone beyond that now.

Xidu

40k is below average, I don’t wanna be rude. But in the company I work, half people in your age makes 55k above.

porkmaster

https://www.boards.ie/discussion/comment/119060056#Comment_119060056

It isn't below average.

"You only earn 40k bro, hey, why don't you just get a 100k job bro, simple."

I know institutions where practically everyone makes 150k+. Would it be fair to draw a conclusion that everyone outside those institutions is below average?

People can dance about this situation every which they can, but the housing situation is dire for many people. Maybe even a majority, and if not, it will be eventually.

https://www.reddit.com/r/ireland/comments/unf921/person_on_a_salary_of_84k_has_application_denied/

No need to point out the obvious things like the person above could move elsewhere (in a entire country with 800 rentals available!), could save more and all that.

It's about the bigger picture and it's bizarre. Morbid, even.

The denial, evidenced through ridiculous suggestions, is funny. Its indicative of how this housing situation was allowed blossom.

"If everyone just gets 300k jobs, there's no problem with housing. Also don't buy a 3 euro cup of coffee twice a week, crisis averted."

Xidu

I just googled the average salary in 2022 in Ireland is 44k. So 40k is slightly below average. But if you say for age 31, maybe then. Depends on what kind job you have. In some role starting point is 55k. In some role starting point is 35k. But I rarely see anyone who has a college degree with a starting point below 35k nowadays

DFB-D

https://www.boards.ie/discussion/comment/119060101#Comment_119060101

Jesus that's insane, I hope that development fails to pay off, from start to finish it appears like the corruption and greed involved in this was excessive even for Ireland.

One of the truly nice streets in Dublin is now ruined for ever by ugly apartment blocks despite council refusal, local opposition but no doubt with a nice payoff for someone in the fast track scheme...

keoclassic

https://www.boards.ie/discussion/comment/119060006#Comment_119060006

"1 child is probably more than enough" FFS!! So not only do you want this guy or gal in a 1 bed apartment costing them a fortune, you only want them to have 1 child also. Because hey, who wants losers like them on 40 grand a year breeding more losers! Macvin, treating people like numbers isn't very humane nor is it something people will stand for. You may not see the fallout from this but maybe your 1 child will!

porkmaster

https://www.boards.ie/discussion/comment/119060131#Comment_119060131

Yet another mini story from the housing crisis saga.

And then it will be said that locals not wanting these developments are another cause of the housing crisis.

All you need do is look at the above to realise that building more is just pointless. Really, what is the point? Oh you're going to build more stuff that will cost an arm and leg, and I'm supposed to believe it will help anything whatsoever?

It'll help line a few pockets and nothing more. Thanks, but no thanks.

landofthetree

Going to be great fun paying a top rate of 60%+ tax in Ireland in around 30 years. The government will have to pay rent supplements to all the pensioners whos only income will be a vastly reduced state contributory pension.

macvin

https://www.boards.ie/discussion/comment/119060032#Comment_119060032

I'm comparing the trend. US started increases base rates and mortgage rates raced ahead. That is happening now in the UK too and will happen once the EU starts raising rates. I have not mentioned variable rates.

The fed has not increased rates much, but the outlook is for rates to go to 3% and therefore the market has pushed mortgage rates to over 5%

In the UK, BoE has started rate rises. The 10 year rate for 90% ltv has now gone over 3%. The couple of lenders (kensington) offering 20year+ fixed are over 3.75% now for 90%. That up from 2.75% 6 months ago.

Fixed rates tend to move ahead of the market very quickly - in the US, In the UK and in the EU. Doesn't matter what the terms are or for that matter what the loan is for.

porkmaster

https://www.boards.ie/discussion/comment/119060170#Comment_119060170

Not a chance in hell that'll be enough to cover the cost of this disaster.

The situation is untenable. The future is unpayable.

Further to the above anecdote on Griffith woods, a comment that can be taken at face value,

"Fun fact about the Griffith Woods development - flats were originally up for sale individually and a few local pensioners in Marino and around were buying flats so they could sell their houses at fair market rate (but no bidding wars) to their adult children. People get to live local, near their families, everybody wins.

Except one day they get a letter saying the sale is cancelled and their deposits will be returned as they’re selling the whole development to this buy-to-rent crowd…"

What does that tell you? It's the wild west, the gold rush, get the profits while the going is good because this game is nearly over. Irish people are clowns, pushovers, we say jump and they ask how high. It's like someone trying to sell you a perpetual engine, impossible.

Murph85

The marginal rate of tax should hit all earnings. That way, we can provide more welfare and free housing...

The divide is accelerating at a depraved pace. We were told to show Solitary with the vulnerable and covid etc. Pity the gesture isnt returned to the younger and exploit able. **** wages, outrageous housing costs..

Murph85

https://www.boards.ie/discussion/comment/119059945#Comment_119059945

Dont buy a one bedroom apartment! Forget this " ladder" nonsense

macvin

https://www.boards.ie/discussion/comment/119060153#Comment_119060153

You need to understand context.

The poster is 37 and single. If he decided he'd like to "settle" and start a family, he'd be 40+. On the law of averages, one child is realistic, but even with two children, a 2 bed apartment will suffice.

And as I made very clear, if he is married, then there's likely to be TWO salaries. And the long term fixed rate is MOVEABLE. eg, if there was a balance of 200k in 2030, that 200k moves to the new property and the rate stays at 2.5%. Only the EXTRA funds required would be at the then prevailing rates.

This idea of a first home being a 3 bed semi is farcical. Mine was a 1 bed apartment, then a 2 bed terrace, then moved to 2 bed in UK, then married and a 3 bed semi here, then a 4 bed detached and now a fab 4 bed detached in a rural location and mortgage free (and semi retired)

So that poster, if he wants to buy something should buy something that will suit his needs for a few years. And that is probably a 2 bed apartment

James20221

Reading some of the comments you see a pattern. A small amount of people in Ireland make and work in industries with giant incomes and are blind to reality as a result. 55k is not a normal salary, its in the top 20%, graduates do not make 35k plus in their first role, in my industry marketing its common for grads to make minimum wage as account execs. Every grad teacher, nurse, social worker makes less than 32,000 when they start.

Then someone talks about the amount of 1 beds in Dublin for under 300k as if thats a real option. That would require an income of 80,000 per year under the lending rules

What we need to do in this country is ask ourselves if we really want to be Europes tech capital. From what I see most of those gaining from this status are foreign and niche skilled workers. We need to go back to being a country for normal people to borrow from Sally Rooney, with a thriving middle class of teachers, gardai, accountants and other regular professions not all slaves to tech nerds

porkmaster

Quite the parallel between Ireland and Canada here. A Canadian MP correctly pointing to REITs as a global scourge, basically (related to the Griffith development above).

https://youtu.be/tnsdoqzVpAw

Reits, and similar more clandestine methods of mass buying, have to go. It's as simple as that.

Quick and dirty suggestion, the government should mandatory purchase all these developments back, at the price that was originally paid. Show them the door. "It'll make us unattractive for similar investment in the future!" God forbid, please wait, stop, come back...

It's one of 3 or 4 factors that have skunked the country, it's time to get rid of them. Sorry, investors.

landofthetree

https://www.boards.ie/discussion/comment/119060211#Comment_119060211

He could meet a 28 year old in Coppers. A really hot Polish girl who wants 4 kids.

Mad_maxx

https://www.boards.ie/discussion/comment/119060043#Comment_119060043

REITs have been a dog of an investment when it comes to Ireland , they have not in anyway tracked the on the ground property market , they pay a nice dividend but so do telecom companies

at least two of the REITs are no longer here anymore ( Green and Hibernia ) as the stock price never caught up with the underlying value of the company , the market simply didnt show any regard for them , a commercial REIT ( Hibernia ) was recently bought out by an american private equity fund , I made a nice gain myself as I was invested in it since Februrary of 2021 but anyone who owned it from the time it was launched in 2014 got little more than their money back

Mad_maxx

get rid of REIT,s and you end up with no supply of rentals at all as the government ( egged on by the media and left wing political parties and activist groups ) have driven small landlords out of the market , there always needs to be a functional rental market , the state cant house everyone , not unless people want to drastically reduce the wealth of the nation , now if thats what people want , fine , its important to understand choices however , the people wanted small landlords demonised and this is the end result

Mad_maxx

https://www.boards.ie/discussion/comment/119059778#Comment_119059778

oh it absolutely can , the thing about the left is they always believe you can be even more radical

macvin

https://www.boards.ie/discussion/comment/119060218#Comment_119060218

Read the bloody context.

The poster said they had a "sizeable" deposit.

Plenty of 2 beds under 300k, plenty of one beds under 250. Go out into the commuter towns and you'll get a 2 bed for 200k. I would presume if they have built up a sizeable deposit that they are earning reasonably good money and have progressed in their career. Lets say 55k. Should be able to get 220k mortgage, add in the sizable deposit and there a decent choice of 2 bed apartments in many areas.

But some people simply only look at any and every possible negative refusing to look at how cheap money is at present. Same people were probably telling people not to buy in 2013 2014 2015 2016 etc and that poster probably listened and became afraid and time and time again the market moved.

Money is cheap. It won't be cheap for long. It is the cushion when prices soften as prices will soften when rates rise - but with higher rates you are paying more at the end of the day.

macvin

https://www.boards.ie/discussion/comment/119060265#Comment_119060265

House prices are still quite cheap in Poland 😁

James20221

https://www.boards.ie/discussion/comment/119060484#Comment_119060484

And the majority of working people earning under 55k who cannot buy a 1 bed for under 160,000. What do they do? Because that is the heart of the housing crisis that average cohort being forced to rent

DFB-D

https://www.boards.ie/discussion/comment/119060190#Comment_119060190

I think that is the root of the problem, the government or funded charities is buying 1 in 4 houses and paying ever increasing prices for those units.

I pay enough tax and don't want to pay more to fund social units bought for top dollar. We need value basic units for social housing for working people in the capital, otherwise they can live somewhere much cheaper. Why can't we buy loads of social houses somewhere cheap, for example rural Spain or Portugal?

Murph85

https://www.boards.ie/discussion/comment/119057682#Comment_119057682

You earn forty thousand. What's the rate of inflation? 7 percent? Unless you are receiving 14% annual pay increases, you are effectively getting pay cuts every month...

Varadkar talked about index linking the tax rates to inflation, the way they constantly increase welfare to offset inflation. Funny that the workers etc shouldn't be afforded the same benefit...

40k etc goes nowhere in Dublin. Yet you will be the target, the working poor, to fund whatever other BS rte tell the politicians that they should he looking after. The poor, the vulnerable etc. Lol! Honestly I would strongly consider many people take a long hard think. Do they want to or see a future in ireland...

leahyl

Funny that most people are assuming I am male and live in Dublin. All your assumptions are wrong Macvin. I have an average salary but just saved my ass off for over 10 years but now that house prices have gone into the stratosphere, there is nothing suitable that I can afford that doesn’t need a load of work done to it. I don’t want an apartment but even those are over 250k for a 2 bed. I suppose you will say that “beggars can’t be choosers”. I don’t want a huge mortgage which is why I want to use as much of my deposit as possible to bring down the amount I’m borrowing but because prices have gone up so much, houses are still out of my reach, like they were in 2013/2014 when I had less saved. I should just move out to a commuter town with irregular public transport and miss out on a social life -some sort of a social life is all I have at this point to have a hope of meeting someone. If I move outside the suburbs of my city, I’d be going nowhere anymore. I want to buy somewhere where I can see myself living for a good chunk of time because there are absolutely no guarantees that I will meet someone. I want to be somewhere I am happy. I fully realise how lucky I am to be able to live at home though and keep saving, for all the good it’s doing me :-( ! I know many others aren’t in the same position. I don’t feel I should have to apologise for wanting to buy my own place though and not wanting to buy an apartment.