Softening house market?

tom_murphy112

Ah this thread is funny. Home owners want prices to continue to rise, while those that don't have a house wants prices to crash.

But honestly people thinking that prices will continue to rise at this pace are delusional. As someone posted few weeks ago, if you are on 100K a year. Your take home pay is only 5.5K a month after the tax man takes his cut. Pay 3K for rent + electricity, heating, food, car loan, car tax, insurance, fuel.. one doesn't have much left in the pocket !

Just getting a pay rise ain't going to help, as the tax man will just get a bigger chunk, as more people will just hit 40% tax rate sooner. The government needs to increase that threshold and/or reduce tax. But lets just say that won't happen.. Still waiting on USC to go away !

Ray Palmer

https://www.boards.ie/discussion/comment/119364344#Comment_119364344

It appears you don't understand how the tax system works in Ireland. When you go over the threshold you pay higher tax on the amount above not on your entire income. There is one anomoly I aware of and that is when a self employed person goes over €100k the have a higher USC applied to all their income but only the self employed

tom_murphy112

https://www.boards.ie/discussion/comment/119364776#Comment_119364776

LOL - I know how taxes work. I would be on a higher than the average salary and if I was renting at the current prices. It would be hard for me to cough up the rents they want !

You can also use sites like this to give you a rough estimate of your take home pay once the tax man gets his cut - https://salaryaftertax.com/ie/salary-calculator

GoldFour4

https://www.boards.ie/discussion/comment/119364288#Comment_119364288

Only getting worse unfortunately!

onedmc

https://www.boards.ie/discussion/comment/119364344#Comment_119364344

That doesn't really make sense, I have a house and I don't want houses to continue to rise. Its destabilizing and of no personal advantage to me I can't sell it as I need to live in it.

tom_murphy112

https://www.boards.ie/discussion/comment/119365063#Comment_119365063

So do I, but I think 80~90% of homeowners just want prices to continue to go up and up. The more absurd the market gets from reality the harder it will get if/when **** hits the fan.

1percent

https://www.boards.ie/discussion/comment/119363514#Comment_119363514

Ray, i wouldn't even call it wild speculation, closer to drunken musing.

Deub

https://www.boards.ie/discussion/comment/119364288#Comment_119364288

Isn’t the EU challenging Ireland on the rural need clause as being discriminating?

combat14

End of era for cheaper mortgages as ECB set to raise interest rates today

https://m.independent.ie/business/personal-finance/property-mortgages/end-of-era-for-cheaper-mortgages-as-ecb-set-to-raise-interest-rates-today-41856477.html

"When the higher costs from the ECB increases of servicing tracker or variable mortgages are added to rises in the cost of energy, motor fuel and food, some families will be facing a hit of close to €4,000 a year in their household budgets.

There are growing fears that the first in a series of ECB rate rises in 11 years will tip Ireland and the rest of the EU into recession.

The cost-of-living crisis shows no signs of easing, with figures from the European Union’s Eurostat this week showing prices rising here last month at a rate of 9.6pc."

there is no doubt about it house prices and rents will have to "soften" people just won't have the money to pay extortionate house prices/rents the way basic living costs are going...

Donald Trump

https://www.boards.ie/discussion/comment/119363430#Comment_119363430

You are probably correct. Someone else mentioned "checks and balances" - they don't appear to exist when it comes to pubic money. Back before the last bust, the Council in this area were responsible for a huge upsurge in prices for property. There was a period when they just would outbid everyone. You had some people who had sold land for building for stupid money and they were trying to buy some property in the area with that money. You basically had lads with windfall money being outbid by someone spending other people's money.

Some of the houses that the Council bought at that time have not been used since they were bought.

drogon.

https://www.boards.ie/discussion/comment/119366962#Comment_119366962

Honestly the ECB should have increased the interest rate years ago. Borrowing money should never have been cheaper than savings. This has just artificial kept the growth going on borrowed money.

combat14

https://www.boards.ie/discussion/comment/119367580#Comment_119367580

looks like its all going to come to a halt with .75 to 1% rise coming in next 2 months alone and more after that

surely a few rate rises over next 6 months will have a knock on effect on buyers affordability budget .. with ftbs being much older than before there is also less scope to increase term of mortgage too

drogon.

https://www.boards.ie/discussion/comment/119367588#Comment_119367588

Well the interest rate is meant to slow spending especially on borrowed money. It won’t only affect consumers but also companies as they would have to think twice to growth their business by borrowing.

greensausage

Purely out of interest, does anyone know roughly how many properties would have been for sale on Daft or other property websites on a given day back in the height of the recession in 2010 or 2011?

BronsonTB

3 houses for sale in my estate, asking prices have not come down but the interest in these properties is next to none...Demand is deffo softening...

Donald Trump

https://www.boards.ie/discussion/comment/119367672#Comment_119367672

It also gives a little more incentive for people to keep their money in cash. I'd keep more up to date with land sales but you'd often see articles where they interview auctioneers who would always be keen to emphasize not only how good things were going, but that lads were spending money rather than keeping it in the bank at 0% interest.

MentalMario

https://www.boards.ie/discussion/comment/119368933#Comment_119368933

79,468 in March 2007.

214,802 properties online in March 2011 (This figure sounds absurd).

158,670 in March 2015.

15,207 in March 2021.

18,147 today.

Daft had a site redesign in 2019 which makes it hard to check on Wayback Machine (URL Structure change too) so I'm not sure if those 2011 and 2015 numbers include sold houses or not but if they don't, we're currently at around 8% of supply that we had 11 years ago.

Good to see PTSB committing to not passing on this interest rate hike to SVR and fixed rate mortgage holders. Of course, is the least they can do given that our rates are way above the EU average

greensausage

Thanks for the info! It must have been amazing house hunting back in 2011 (if you were in a position to buy a house of course!)

StevenToast

https://www.boards.ie/discussion/comment/119368952#Comment_119368952

Interesting...any info on the estate?

drogon.

https://www.boards.ie/discussion/comment/119369023#Comment_119369023

The current CSO figures show there are over 166k empty houses in Ireland, of that over 48K have been empty for the last 6 years. Surely all that can't be derelict.

Additionally 35K houses were vacant cause it was up for rent. Yet we have less than 800 houses up for rent in the entire country.

The figures just don't add up.

amacca

https://www.boards.ie/discussion/comment/119369107#Comment_119369107

Yet somehow it wasn't imo.....anything you really wanted didn't come down much or wasn't put up for sake as owners decided to hang on........medium/large sized country towns that may have been different in Dublin.

Donald Trump

https://www.boards.ie/discussion/comment/119369023#Comment_119369023

Given that your March 2011 number seemed absurd, I had a look myself. I get a total of 89,806 listings for sale in Republic (69.5k) + North (20k) added together. Still a lot, but nothing like your 214k

https://web.archive.org/web/20110310172104/http%3A//www.daft.ie/

Ray Palmer

https://www.boards.ie/discussion/comment/119369244#Comment_119369244

When prices dropped what seemed to happen was houses in older estates in Dublin were not up for sale at all or a very low amount. When prices rose houses in these estates came on the market. So selection was limited

On empty housing Ireland runs at about 10% normally but before the crash it was up at 16% and now apparently about 8%. When people say their is a crash coming like before they tend to be looking only at price and saying it can't last. Huge difference in the market with a lot of demand and not enough property.

THere was a guy on the news yesterday saying he saw the writing on the wall so he got a fixed rate. The thing is in Ireland fixed rates are very high and the longer you get a fixed rate the higher the rate. In the USA for example when you fix your rate it at what the federal rate is at without additional bank rates. Here it never seems to make sense to get a fixed rate especially for a long period

DFB-D

https://www.boards.ie/discussion/comment/119371118#Comment_119371118

Fixed rates were actually lower than the current variable rate for 5 & 10 year periods. All other years were higher than the variable rate.

So if that guy fixed for 5 years, he reduced his rate immediately.

On the face of it and assuming there will not be major differences between year 4 and 5,it seems occasionally it can make sense to fix.

JDD

I dunno about the market softening just yet. My colleague is house hunting in Inchicore. Three beds are going up for €490-500k but the bids that are in are around the €680k mark. Now maybe the estate agents are deliberately underballing the market price but honestly why would they do that when there are hundreds sweating at the house viewings and putting in bids in as soon as the ad goes up on myhome.ie.

€680k. For a three bed. In Inchicore.

Now if that wasn't ever an indication of the top of the market, I don't know what is.

Keep your money in your pockets lads. You'll get a much nicer place in 18 months time. The market won't crash like 2011 - too much pent up demand, not enough new houses. So don't be expecting a 30% price drop. But prices will definitely go down.

Donald Trump

https://www.boards.ie/discussion/comment/119371590#Comment_119371590

why would they do that when there are hundreds sweating at the house viewings

It would make the people who have the cash/credit, and who are desperate, even more desperate and panicked if they see "hundreds" of other interested people.

Increased rates will have to have an effect at those prices. Roughly speaking, if you have a 500k mortgage, and rates move up by 1%, then you are going to have to get a jump in your salary of about 10k a year to offset that increase.

handlemaster

https://www.boards.ie/discussion/comment/119365184#Comment_119365184

Your opinion isnt accurate

tom_murphy112

https://www.boards.ie/discussion/comment/119391312#Comment_119391312

Which part ?

spaceHopper

https://www.boards.ie/discussion/comment/119365184#Comment_119365184

I've a mortgage and I don't give a rats ass what the house is worth, well I do in the sense that I want my kids to be able to buy somewhere. All I care about is what I owe the bank and can I afford it.

If house prices keep rising and we go back into buble territory (if we aren't there already) then it will eventually crash and that will cause another financial crisis and recession so more taxes and job losses - I don't want that. What's good for the economy is slow house value growth circa 2 - 4% pa That is after we have the next crash and price correction.

FYI we have fixed for 5 years 4 left, wish I'd gone for 10 and have 50% LTV. I prices drop by more than 10% in 4 years time I won't have 50% LTV