Softening house market?

Most property in Ireland is owned out right with no mortgage. The media needs to get eyeballs. Lots of stories about property are just space fillers

Do we realize that house, especially good house are luxurious, for last thousands of years it’s the same.

it’s like handbags. You have money you buy a Hermes, Chanel, LV. You don’t then buy a 20 euro backpack.

I bought a 20 year old one-off 4 bed on 2 acres near Rathdrum, Wicklow in 2018 for €395k, borrowing €350k. At the time we were advised by a well meaning relative involved in property not to buy, we were at the top of the market and we'd be in negative equity very soon.

This year we did an extension and renovation costing €150k and when the bank had it revalued it was estimated to be worth €500k had we not touched the place, and €700k with the renovation complete.

Now I don't think we'd achieve €700k here if we decided to sell, I think that's wishful thinking at best, but the higher valuation gives us more equity in the house and access to better rates.

But the point ultimately is that in 2018 people involved in property thought we were at the top of the market and here we are 4 years later with prices still climbing. It's hard to really call how things will play out with it.

We just fixed with AIB for 2.35% over 5 years.

just to put a figure on the comment above about ‘a lot of houses having no mortgage’, there are 735k mortgages outstanding according to the CB, and I believe there are about 1.75m residential addresses in the country - so 42% of all properties have a mortgage outstanding.

there are 88k BTL mortgages, with 10% still in arrears.

Needless to say, there’s a lot of PPR mortgages that are actually rented houses - no one I’m aware of called up their bank looking for their tracker to be moved to a 4.8% BTL 😏.

https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears/2021q4_ie_mortgage_arrears_statistics.pdf?sfvrsn=7

Saw that earlier - the headline had more bark than the article has bite. It basically says that prices are high now, but not in the same way as other places and any drops would be “moderate”.

you can tell they were only dying to use those 2 words “soft landing” 😏

The going rate for a newly qualified accountant (who should be in their mid twenties really) is 60k. No accountant is on 40k 8 years into their career unless they have zero qualifications

Oh and constantly quoting the national average salary is a bit meaningless considering:

It would be higher in Dublin versus nationally

Average includes part time workers

Its not particularly difficult to find a career in Dublin that pays over 40k 8 years in..

The smarter people with 10 plus years left on a mortgage would be fixing for 10 plus years.

Glassdoor is hardly a good reference.

83k for 5 years post qualified - which is about 8 - 8.5 years total experience

You keep bringing this up, but it seems like you are just describing your own situation. You need to be able to decide when things turn from positive to negative and vice versa. It is always easiest to see a trend continue but to take advantage you need to know what indicators would make you change your mind.

I keep bringing it up because it is a fact.

Its not about trends, its about stability. There is no stability in renting. Even rent controls, an attempt to bring stability to the market have actually introduced more instability. Far more than would ever have been there had there been no rent controls. More rent controls bring even more instability. Then it bleeds into sales.

No matter which way the market turns, positive or negative you are better off buying than renting.

Time is your friend with a mortgage. Time is not your friend if you rent.

Ask anyone who bought just before the last crash and ask them are they glad they did now. Anyone.

And now it has been established also that if you buy now and fall on hard times your house will not be repossessed unless you let it be repossessed willingly. As long as you make some sort of effort to pay something each month you can live there as long as you want. So once you are in your house you are in a far better position than renting.

If they had a crystal ball at the time sure. But as now, at any point in time you just do not know whats ahead. So even though those people who bought just befroe the crash thought they had done the wrong thing for years, they actually didnt when they look back now.

Likewise anyone who could have but didnt buy in 2015 and waited til now, is probably sorry they didnt, but as long as you can get out of the rent trap now, you are winning.

The only losing game is renting.

The market was softening in 2007 anyway. But in September 2007 we had the run on Northern rock. At that point it was clear that things were not going well. I went travelling at around that time (I had finished up a contract) and remember being worried about the situation. Bear Stearns collapsed in March 2008, at this point I was so worried about the state of the economy that I came back home to find a job. Finally Lehman Brothers collapsed in September 2008 at that point if you were not worried about what was happening then you must have been asleep.