Current public sentiment towards the housing market?

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Calina said:
You have got to be joking me? People were spending 600K plus in Collinswood?
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That one went sale-agreed but didn't go through, came back on the market about a month later. It's been back on for months now, no buyers.
 
Going rent in Collinswood is 1400-1500 (depending on how lucky). Average mortgage on 550K is around 2200 (cap repayments included). I rented in Collinswood for a while, and a fair whack of it was rented. I wonder if that's still the case.
 
StoppedClock said:
I'm lovin' the sentiment but just before I start making smug phone calls and marching around the office yelling "I told you so" can you please confirm that we have peaked and that the crash is currently underway?
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There is no evidence of a peak, considering the last stats we have say there were record price increases in the first quarter (half?) of this year. There is annecdotal evidence of prices being lowered on these boards, but I remember the same thing being said last year. It also summer which is a known time for slow sales. It will be another few months when a few more rate hikes kick in before anyone can say which way its going. IMO too early to tell yet.
 
I think that the market has turned from what we saw in the spring/early summer. Asking prices for similar properties in my bellwether development are static. However asking prices 4-5 months ago were an invitation to treat not the vendors anticipated selling price. Bidding wars are possibly history for large swathes of the market, negative equity may be a reality (if unidentified) for many recent buyers.
 
CelloPoint said:
That's another good point. Can't remember where I saw it (boards.ie or here on AAM), but is there any evidence that the banks are not passing on the rises to their customers? If this is the case, the Irish banks are basically giving 2 fingers to the ECB, and it's like saying "to hell with the long-term future of the Irish economy, we're going to milk the tiger for every last drop of blood" and "we know better than the ECB".
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Given the increasing share trackers have in the market then the rate increases on these would automatically have been passed on to many borrowers anyway. It generally takes a week or two before the banks announce increases in their rates but I'm pretty sure most are passing on the increases in full for example AIB passed on the full .25% in March and [broken link removed] although it was 10-12 days before they announced this.
 
whathome said:
That is because US buyers generally lock rates for the total duration of their mortgage. Variable (adjustable) rate mortgages (ARM's) are a recent arrival to the US market. So people rush to lock in a low rate. Variable rates are dominant in Ireland so the "race against rates" is less likely to have as much of an effect here.
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Actually its more of a problem in Ireland where vast majority are variable or semi variable(fixed for a few years only). Banks stress test at prevailing mortgage rate +2% ,so where theres loads of variable mortgages the higher rates go the more people are affected by reduced borrowing capacity. If majority are on long term fixed terms then the stress test isnt required.
 
bearishbull said:
Actually its more of a problem in Ireland where vast majority are variable or semi variable(fixed for a few years only). Banks stress test at prevailing mortgage rate +2% ,so where theres loads of variable mortgages the higher rates go the more people are affected by reduced borrowing capacity. If majority are on long term fixed terms then the stress test isnt required.
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The effect of the stress test is neutral. Rates go higher, stress test goes higher by the same amount. Agreed that there will be a few crazies that will try to borrow in case their approval drops.

If you were locking your mortgage rate for 30 years, would you wait for rates to rise before buying? This is the position for many US buyers, the race against rates has more of an effect over there.
 
Duplex said:
negative equity may be a reality (if unidentified) for many recent buyers.
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NE is virtually assured for any one who has bought in 2006 with minimum deposit when you consider stamp, legals etc.
 
summerhill said:
Any of the bank's passed on the latest interest rate increase to mortgage holders yet??? Any indication as to when it will happen?
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When the banks have sold off their branch networks and HQs?
 
whathome said:
The effect of the stress test is neutral. Rates go higher, stress test goes higher by the same amount. Agreed that there will be a few crazies that will try to borrow in case their approval drops.

If you were locking your mortgage rate for 30 years, would you wait for rates to rise before buying? This is the position for many US buyers, the race against rates has more of an effect over there.
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Long term Mortgage rates in America never went below approx 5.5%,even when variable rates were ultra low most americans were fixing into long term rates at 5.5%. For several reasons it does have a bigger effect here and race against rates didnt exist to a large extent in the usa.
 
bearishBull please claify your understanding of race against rates.

Do you mean people trying to lock in lower fixed rates or borrow larger amounts?
 
StoppedClock said:
bearishBull please claify your understanding of race against rates.

Do you mean people trying to lock in lower fixed rates or borrow larger amounts?
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Both, but mainly with regard to borrowing capacity, rates rise and you can borrow less,but when majority of market is fixed theres less of a race to get in before rates rise whereas where the majority are variable(as in ireland) there is a race to get in before a)rates rise to unaffordable levels and b) the amount you can borrow at a set income level is reduced due to higher rates.
 
bearishbull said:
Long term Mortgage rates in America never went below approx 5.5%,even when variable rates were ultra low most americans were fixing into long term rates at 5.5%. For several reasons it does have a bigger effect here and race against rates didnt exist to a large extent in the usa.
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The 30 Year FRM (Fixed Rate Mortgage) in the US dropped from 6.5% in Sep '03 down to 5.5% in Feb '05. Current average is 6.63%. There was a rush to lock at the lower 5.5% to 6% range.

[broken link removed]
 
bearishbull said:
amount you can borrow at a set income level is reduced due to higher rates.
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Are people really that stupid that they cannot see the link betwen higher lending amounts and higher prices and inversely lower lending amounts and lower prices?
 
StoppedClock said:
Are people really that stupid that they cannot see the link betwen higher lending amounts and higher prices and inversely lower lending amounts and lower prices?
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It sounds crazy but I suspect a minority are that stupid.
 
whathome said:
The 30 Year FRM (Fixed Rate Mortgage) in the US dropped from 6.5% in Sep '03 down to 5.5% in Feb '05. Current average is 6.63%. There was a rush to lock at the lower 5.5% to 6% range.

[broken link removed]
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Yeah but its not as significant as here. 5.5% is only 15% less than 6.6%. Borrowing capacity wasnt affected much like will be/is the case here now.
 
bearishbull said:
5.5% is only 15% less than 6.6%
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6.6 is 20% more than 5.5.

And it's 20% more for 30 years!

I think we all accept that there will be some head-cases that believe they should rush out and get a big mortgage while they can but rates have risen enough already to take most of them out. They may have had some effect in the spring but it's too late now.
 
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