Softening house market?

Donald Trump

https://www.boards.ie/discussion/comment/119303984#Comment_119303984

Well there can be more factors in play than price tag on the property. A person might not currently be able to afford a house in the area they want to live. They might hope that the difference between buying now and buying in a year might be living where there want to live instead of being stuck 50 miles up the road in a commuter town having bought a house and furnished it and be stuck there for a few years at least

Pussyhands

https://www.boards.ie/discussion/comment/119304007#Comment_119304007

Well I wouldn't be buying now for the next 6-9 months at least. If you've waited this long you can wait another while to pass through the potential recession.

drogon.

https://www.boards.ie/discussion/comment/119304365#Comment_119304365

But I think the comment was in reply to a guy who was claiming he had friends who were on 150K salaries and had 100K in the bank, hoping prices will drop below 500K so they could avail of the HTB scheme.

Assuming the person at the moment is renting out a house or an apartment in a decent part of Dublin, paying over €3K~€4K of rent a month and then hoping to save 30K when the price drops is just mental to comprehend.

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/119305117#Comment_119305117

Ah, apologies - fully agreed in that case!

Padre_Pio

https://www.boards.ie/discussion/comment/119304807#Comment_119304807

I'm buying ASAP.

We're getting evicted from our rental property as the LL is selling.

I'm not dealing with the hassle of finding another place and paying at least x2 rent for the privilege of living there

Plus I may get the opportunity for some rent-a-room income for a few years to help with mortgage and bills, plus the chance to actually get a mortgage exemption now and hopefully lock in a low rate.

ARJn

https://www.boards.ie/discussion/comment/119302346#Comment_119302346

And I agree , the fact that HTB is given only on new build and for prices <500k makes every developers add 30k just for the heck of it as long as it is blow that value as they know people would still buy it

I really never liked HTB myself (which I am eligible to took) , it increases the cost of new build for sure

drogon.

Honestly I don't see why HTB is bad, sure it may inflate prices a bit. But at the end of the day the money you get back, is income tax and DIRT that you paid to the government.

Billion dollar companies get similar tax back all the time when they setup shop here. Hence they pay little or no tax !

DFB-D

https://www.boards.ie/discussion/comment/119305117#Comment_119305117

It's not 30k BTW, it's 30k at the back of your mortgage, so 30k * interest rate * life of the mortgage.

https://www.boards.ie/discussion/comment/119306049#Comment_119306049

No one cares about that. It’s about the monthly and the cash up front

Donald Trump

https://www.boards.ie/discussion/comment/119305212#Comment_119305212

Do you not have to buy two houses what with the bi-location and all?

Padre_Pio

https://www.boards.ie/discussion/comment/119306094#Comment_119306094

Two semi-d's

;)

awec

https://www.boards.ie/discussion/comment/119306017#Comment_119306017

https://www.boards.ie/discussion/comment/119306049#Comment_119306049

https://www.boards.ie/discussion/comment/119306059#Comment_119306059

For someone trying to buy, yes the house is more expensive over the entire mortgage, but you will still be able to buy it sooner. Here's some working out:

Imagine you want to buy a house worth 500k with HTB. Let's assume that the entire HTB value (30k) was added on to the price, and if HTB didn't exist it would sell for 470k instead.

• Without HTB, the buyer needs a deposit of 47k (10% of 470k).
• With the current HTB, the buyer needs a deposit of 20k (10% of 500k minus 30k relief). That's an up front saving of 27k.
• Under the original HTB, the buyer needed a deposit of 25k (5% of 500k). An upfront saving of 22k.

One of the reasons it was introduced was people were earning more than enough to pay a mortgage, but were having to wait an age to buy as gathering a deposit while paying rent was difficult.

drogon.

Umm. Thought the official price of builds wasn’t supposed to go up. it was just that some builders increased the price after the scheme was launched.

Pussyhands

https://www.boards.ie/discussion/comment/119306017#Comment_119306017

Saying you get your tax back through the help to buy scheme is like saying you got a pay rise of 5% while inflation is at 10%.

The introduction of help to buy immediately raised prices by that amount. Prices would be at least 30k cheaper now if there was no help to buy.

It's depressing that FF/FG have actually convinced the plebs that it's a good thing.

Pussyhands

https://www.boards.ie/discussion/comment/119306217#Comment_119306217

"some people" were having trouble saving for a deposit. But there is actually no evidence this led to houses going unsold, as there ARE loads of people out there who can save for a deposit.

So while the HTB did help certain people buy, it only took them away from those who were able to save up for the deposit and in turn prices were driven up higher.

The problem is there's no houses available to buy. The problem is not people not being able to afford to save for a deposit.

AySeeDoubleYeh

I would suggest people not being able to afford to save for a deposit is a significant problem. Especially when you consider how far above the median income some of those people are.

wassie

The IT reported on this back in Oct 2021:

https://www.irishtimes.com/business/economy/having-two-help-to-buy-schemes-at-a-time-of-rapid-inflation-is-madness-1.4702765

The Cabinet is said to be divided on the efficacy of the scheme with some concerned it maybe too generously priced and aiding households already in a position to buy.

There was significant criticism when it was introduced in 2017, with some saying it had the potential to drive up house prices. While it didn’t initially coincide with a pick-up in headline prices, it did run parallel with an acceleration in new home prices.

But they went ahead with increasing it by €10k anyway after lobbying by building & lending sectors, despite warnings from ESRI.

https://www.irishexaminer.com/news/politics/arid-40227437.html

In a submission to be delivered to the Oireachtas housing committee, officials from the Economic and Social Research Institute (ESRI) will say that funding these people when supply is so constrained “will very likely lead to higher house prices”.

DFB-D

https://www.boards.ie/discussion/comment/119307695#Comment_119307695

Definitely this is an issue.

As a landlord and property owner, I am happy that the market went up so much, but it wasn't sustainable, a cyclical markets benefits only those who buy and sell land in large quantities.

We needed measures 3 years ago to allow the market to grow but not overheat, and it now looks like SF could be the next party in government, which brings much uncertainty for landlords.

Pussyhands

https://www.boards.ie/discussion/comment/119307695#Comment_119307695

The evidence just is not there to support that.

There's a lot of people on good money in this country. Friend of mine is no Einstein, working in construction, just got a mortgage by themselves and told me they save 2.5k a month.

I myself save around 2k a month and I'm not on amazing money either.

If the issue was people not being able to afford to save for deposits, then house's would go unsold.

awec

https://www.boards.ie/discussion/comment/119308710#Comment_119308710

"If the issue was people not being able to afford to save for deposits, then house's would go unsold."

This is completely incorrect. The two things are mutually exclusive.

It may not be an issue for you personally, or for your mate, but it absolutely was an issue and a major reason why HTB was brought in.

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/119308710#Comment_119308710

Myself and my partner are on good money - we also rent in Dublin, and in addition have an 18-month old dependent. Saving for a deposit has been extremely difficult, and saving 2k a month is not realistic in our situation.

Again, I am in a fortunate situation (in terms of salary) compared with many - if it has taken me this long to get something remotely close to a deposit together, what chance do those earning less have?

Saying 'houses would go unsold' if this were a problem is a fallacy - and the supporting evidence is absolutely there if you're even remotely inclined to look.

Pussyhands

https://www.boards.ie/discussion/comment/119308955#Comment_119308955

Whether you can save or not is meaningless as there's loads of potential buyers out there who can save.

The facts are facts. If people couldn't save for deposits then houses would go unsold or prices would drop. Neither of these have ever happened in the last decade.

Help to buy is a sham, a pure and utter sham.

AySeeDoubleYeh

I think this may have run its course, we'll agree to disagree!

awec

https://www.boards.ie/discussion/comment/119310502#Comment_119310502

"If people couldn't save for deposits then houses would go unsold or prices would drop."

This is total nonsense, have you been living under a rock the past decade?

You repeating something over and over does not make it a fact.

Imagine there are 100 people looking to buy houses. Because of a serious shortage of supply (i.e. like in Ireland), there are only 40 houses for sale. Of the 100 people, 50 of them are struggling to get the deposit together, but there's still more buyers than there is supply, so prices keep going up. But the deposit problem still exists too.

The two things are mutually exclusive. So long as there is more demand than supply, prices will go up.

Pussyhands

https://www.boards.ie/discussion/comment/119320350#Comment_119320350

That's not a deposit problem, that's an availability problem.

It only becomes a deposit saving problem when the availability is there and the people can't save for a deposit.

Expanding the pool of buyers for the same supply just makes the availability problem worse.

I assume all the people in favour of the help to buy are also in favour of scrapping the lending rules of 3.5 x salary? Because it's essentially the same thing but a different way of going about it.

Your example is spot on by the way. 100 people want to buy, 40 houses available, 50 can't get a deposit meaning 50 can. 50 buyers for 40 houses, demand still outstrips supply.

So what do you want to do? Give the other 50 more money to chase those 40 houses so now instead of 50 people chasing 40 houses you have 100 people chasing 40 houses. Prices soar even higher.

timmyntc

https://www.boards.ie/discussion/comment/119320350#Comment_119320350

Thats exactly the point being made - that the key issue here is not ability to save for a deposit, because prices are still rising with the current situation of people allegedly struggling to raise a deposit, so they are ultimately having no impact on prices.

We still have more buyers than supply so the deposit issue is irrelevant, meaningless. Schemes to help people raise deposits will just inflate prices and will not help anyone as ultimately the problem is too much demand not enough supply. Deposit saving is a red herring.

AySeeDoubleYeh

Let's say there's 1 house for sale on the island, but we have 4 people who can afford it - do you see any problem here?

Pussyhands

https://www.boards.ie/discussion/comment/119320501#Comment_119320501

That's a completely different topic to the one we're discussing, which is whether the Help to Buy actually is a good idea.

alwald

HTB was never a good idea as the price of new houses/apartments increased overnight as a result of this scheme. The price of second hand houses/apartments followed the same trend as new houses and also increased but at a slower rate from my observation.

HTB would have been good if the stock of new houses was adequate.

AySeeDoubleYeh

Ok, let me make it easy - do you see an issue with an ever-increasing number of people in their 30s/40s being unable to save a deposit?