Current public sentiment towards the housing market?

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room305 said:
I always found this a bizarre way to measure inflation.
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It means that Irish inflation will track the rate rises ....given the mad size of our mortgages ....and that rate rises will not curb inflation in Ireland but may fuel it.
 
room305 said:
It is somewhat paradoxical, but I imagine as interest rates trend upwards to combat inflation, many Irish workers will start to aggressively demand higher wages to meet rising borrowing costs.
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They can demand all they like, but are unlikely to get them. We have already lost most of our competitive edge in this regards.

The economy will suffer especially, the extra money going to be spent on servicing higher mortgage costs will result in money not being spent elsewherein the economy.

It's possible to see a stagflationary scenario for the irish economy, whatever about anywhere else.

 
ivuernis said:
They can demand all they like, but are unlikely to get them. We have already lost most of our competitive edge in this regards.
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Sadly, in the public sector they probably will.
 
room305 said:
Example:

Interest-only €1M mortgage for 35 years @ 3.5% - €4,132.92 p.m.
Interest-only €1M mortgage for 35 years @ 8.5% - €7,468.61 p.m.

That's quite a jump to take in the space of a few years!
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I think you gave the capitol+interest repayment figures above. gave me these figures for interest only...

Interest-only €1M mortgage for 35 years @ 3.5% - €2,916.67 p.m.
Interest-only €1M mortgage for 35 years @ 8.5% - €7,083.33 p.m.
 
room305 said:
Sadly, in the public sector they probably will.
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Who's going to pay for it if the private sector gets a hammering and government revenue from the construction industry contracts.
 
whizzbang said:
let all go work for the corpo...

seriously..
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Have thought about it, some family members work in the public sector and comparing salaries i can believe the recent stat that says on average public sector workers earn 40% more than private sector workers. Plus there's all added benefits, e.g. pension, better job security, etc.
 
This from the Sunday Independent...
 
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walk2dewater said:
And because of the way we measure inflation [we count mortgage payments not house prices] Irish inflation will SOAR as ECB rates rise.
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Short of wage hikes or tax breaks inflation in other goods and services should drop as the money once spend on them goes into servicing the higher mortgage repayments so it might be all a case where inflation for everything rises.
 

That being said would it not drive you nuts working in there? Some friends of mine work for the goverment and they are surrounded by deadbeat work to rulers. It would do my head in to be honest.
 
whizzbang said:
That being said would it not drive you nuts working in there? Some friends of mine work for the goverment and they are surrounded by deadbeat work to rulers. It would do my head in to be honest.
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Agreed, that's why I thought about it and decided not to, still the money was tempting tho.
 
ivuernis said:
Agreed, that's why I thought about it and decided not to, still the money was tempting tho.
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it really is madness, who would have thought the most secure jobs would be the best paid, it seems backwards!?
 
Getting back to the topic at hand, i have a developer acquaintance who assures me the market won't drop (not that i would expect him to say otherwise), but at the same time he has recently off-loaded some of his property portfolio and diverted the funds into other areas.
 
You are right. My mistake, the figures I gave relate to a with capital repayments mortgage. Highlights how little the IO mortgage saves you once rates go much higher.

A 242.85% increase in a few years. Quite staggering.

As an aside, I am continuously baffled by the lack of knowledge on the part of property investors here. Over the weekend, I asked a friend of mine (whom I have been trying to convince to sell his investment property and pay off his outstanding debts) was he concerned about rising interest rates over the short-medium term.

He conceded that although he was worried about the difficulty of making the repayments on his interest-only mortgage, there was only a year and a half left to run on the interest-only component. After which, he assured me confidently, rising interest rates would no longer be a concern as all the interest will have been paid off on the loan and he will only be repaying the capital ...
 

Did he give any explaination for this apparent lack of confidence in the market? Or is it a simple case of diversifying?
 
whizzbang said:
it really is madness, who would have thought the most secure jobs would be the best paid, it seems backwards!?
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Like a lot of things in this crazy economy of ours i guess, but they have unions and are less prone to the vagaries of globalisation. I've never been in a unionised job, work in IT, and the spectre of competition from out sourcing to more competitive countries always looms on the horizon.

 

That's the best one I've heard in quite a while. I hope you corrected him. And if so what was his reaction?
 
Howitzer said:
That's the best one I've heard in quite a while. I hope you corrected him. And if so what was his reaction?
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It was a struggle not to burst out laughing to be honest. Anyway, I said that I had never heard of such a mortgage and that typically an interest-only mortgage involved repaying only the interest for a few years followed by repayments of both interest and capital but that at all times you are repaying the interest on the outstanding balance of the loan.

Although he insisted he was sure, some back of a beer mat calculations on just how much he would have to be repaying the bank to "forward pay" all the loan interest, even if he had fixed @ 3.5% for 30 years, seemed to convince him.

I left it at that but have my fingers crossed he will give serious consideration to selling. Even my parents when I visited them this weekend, seemed less bullish on property. My father was all set to purchase another as recently as one month ago (despite my pleas) but has now decided to adopt a "wait and see" attitude to the market and will reassess the situation in a few months.

If you want an indicator of what public sentiment is like, that is not a bad one. I believe many people are moving into a cautionary phase which will only be heightened as rates continue to rise.
 
whizzbang said:
Did he give any explaination for this apparent lack of confidence in the market? Or is it a simple case of diversifying?
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No, he has nothing but confidence in the market, but his diversification, whilst not an admittance of a downturn tells me he feels there is at least the chance of an imminent peak. Actions speak louder than works as they say.

 
ivuernis said:
No, he has nothing but confidence in the market, but his diversification, whilst not an admittance of a downturn tells me he feels there is at least the chance of an imminent peak. Actions speak louder than works as they say.

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a peak followed by further gains? interesting trigonometry
 
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