Current public sentiment towards the housing market?

Status
Not open for further replies.
HowStrange, you have summed up my current position and thoughts exactly. If the only thing I can afford is a crap house then frankly I am not interested, Ireland is good place to live but its not THAT good.
 
Yeah Bedsit - be careful what you read into the US markets at moment -

its like the Grand Old Duke of York and his ten thousand men at the mo. Most Commentators are agreed that the US is slipping toward recession at the moment - how fast and how bad it will be is the main question - The Markets really haven't a clue at the moment - any scrap of info will be used as evidence that its going this way or that - That there would be a rebound in the mortgages market is no surprise given Bernanke held off on another interest rate rise for the moment (many will take the chance to refinance as opposed to buying) and gives the herd a chance for a good auld jog this week -
the basic fundementals haven't changed and one stray missile in the ME could have them all the Bear Cave by the end of the week.
 
Remix said:
They might need to dig out and dust off the "price-reduced" and "must sell" boards that have been in storage for the past ten years or so!
Click to expand...

I think they will make up new "soft landing price" boards, nobody wants to use dirty words like "reduction",
 

But will they drop back the 20+% that they have increased in the last two years whilst you have been waiting for the bubble to burst? In some localised areas perhaps they will, but I don't see the average house price dropping that much IMHO.
 
What do people think are the percentage of specuvestors who will be happy with nominally flat prices, (i.e. the soft landing) and therefore hold on to properties for the long term
 
What is the point in whether or not they will go back to where they were two years ago?

Surely all that matters now is where will they go next?
 

Oh Yes, without a doubt, you wouldn't believe how people are acting (and its not all Dublin Suburbs that is buzzing with keeping up with the Jones' - its alive and well in the country areas!!

I know of one couple and their kids that have recently moved into a big house that go around telling everyone that their house is the biggest in the "family" i.e. siblings, cousins etc. The adults say this!

They also had to buy a bigger newer car when someone bought a newish car. Their little girl was telling people that her Mammy and Daddy had a bigger car and house than everyone else.

Then, when someone got a new TV, they went out and bought a bigger one and their teenage daughter said to their customer that they now have the biggest TV too.

This is modern Ireland alive and well!
 

This presupposes the following:

1) no change in unemployment
2) ongoing high inflation including salary inflation

The problem, as I see it, is that the average salary in Ireland is somewhere between one eighth and one eleventh the average house price depending on which lot of statistics you read. Certainly the average house price in Dublin - where I live and work - is more than 10 times my salary which is approximately double what it was when I was 26 and additionally, I also earn well in excess of the average salary. In some respects, the maths do not actually add up.

I don't see salary inflation being very likely at the moment. Basically, we're sliding in competitivity as regards a lot of the rest of the world. Much of employment growth is in the construction industry. IBEC did their absolute best to limit reward in the latest collective deal and anyway, a massive number of people are not signed up to the National Wage Agreement. I know people who are earning less in real terms now than they were 5 years ago.

For me, the issue is that lending criteria were heavily relaxed over the past three or four years, and now loan terms are increasing heavily too. The net result is that even if monthly payments appear to be equivalent to three, for years ago, people are carrying more debt for longer, and they are massively open to shocks. When the difference between a 25 year mortgage and a 30 year mortgage monthly repayment is less than 100E, and people can't afford the 25 year mortgage, then they are probably at the very, very limit of affordability, in a market of rising rates.

Anecdotally, there are stories of people getting far in advance of the 5x salary because they're trainee accountants or civil servants. I'm not absolutely sure how true those stories are though.

Those people whom you expect to be in the best position to clear their mortgages earlier need to be living in accommodation that suits their long term needs. I'd be surprised if there were many sub 26 year olds in that position, to be honest with you, unless they were saving for a house and still have their confirmation money intact, certainly in Dublin. Possibly the same outside Dublin given the disparity in average incomes.

The problem is, because there is a massive disparity between rents and mortgages, and the norm is for them to track, there are three possible scenarios 1) rents rise to meet mortgages 2) property prices fall so that mortgage repayments meet rents or 3) combination of the two. Only in one of those scenarios is it possible to avoid property coming down in price, and that's no guarantee of continued rises. The problem is rent is largely dictated by salaries and if average salaries are not rising, it will be difficult for rents to go up wholesale unless there's a crash in rental supply.

Which is possible, but given the massive supply in actual accommodation units, is unlikely.
 
Dusty said:
But will they drop back the 20+% that they have increased in the last two years whilst you have been waiting for the bubble to burst? In some localised areas perhaps they will, but I don't see the average house price dropping that much IMHO.
Click to expand...

Thats the big question, I dont think so. House in my area have gone up 40% in 18 months, its a crazy increase but are they going to decrease 50% or more in order for people to see negative equity? No.
 
PS - All the money is borrowed:
For the new car
For the new TV
and a 35 year mortgage at 35 years of age

I have a feeling they will suffer in the next couple of years
 
CapitalCCC said:
What is the point in whether or not they will go back to where they were two years ago?

Surely all that matters now is where will they go next?
Click to expand...

Agreed. Sure there was people who made a killing even in the last 2 years!! The IO and 100% mortgages drove prices through the roof. FTB's thought it was 10 Christmas's at once. But I really think things have changed now. Would like to see more examples of an increase in supply before we can say things are turning though.
 
Quote SHARP - "I know of one couple and their kids that have recently moved into a big house that go around telling everyone that their house is the biggest in the "family" i.e. siblings, cousins etc. The adults say this!

They also had to buy a bigger newer car when someone bought a newish car. Their little girl was telling people that her Mammy and Daddy had a bigger car and house than everyone else.

Then, when someone got a new TV, they went out and bought a bigger one and their teenage daughter said to their customer that they now have the biggest TV too."

- Anyone who'd listen to them would be a bigger ejit!
 
homeowner said:
You cant borrow x10 your salary. x5 is the most the banks will give you and that is only recently. It used to be 3.5 times your salary plus 1.5 times your partner's salary. So I dont understand your argument.
Click to expand...

You are WRONG yourself. That sort of explains why you dont understand the argument.

It USED to be 2.5 times main income and 1 x second income until the late 1990's .

It USED to be 2.5 times main income up to maximum 80% until the late 1970's
 
man, you don't need a new house, you need new friends!!
these people you know sound appalling!!

 
I was thinking that too, the guy who has a wife that is going to leave him unless she gets a new BMW...well he must be VERY stupid or VERY VERY ugly!!!
 
Alot of people are being lent 6 & 7 times their salary. I rang around various mortgage lenders and was offered 7 times my salary by 2 lenders.
 
2Pack said:
You are WRONG yourself. That sort of explains why you dont understand the argument.

It USED to be 2.5 times main income and 1 x second income until the late 1990's .

It USED to be 2.5 times main income up to maximum 80% until the late 1970's
Click to expand...

With BOI in 2002 it was 3.5 times your salary plus 1.5 times your partner's salary.
 
bogwarrior said:
man, you don't need a new house, you need new friends!!
these people you know sound appalling!!
Click to expand...

LOL!!
Unfortunately they are "family" i.e. I married into this mess of a family


......and they ARE appalling!
 
Contrarian said:
Alot of people are being lent 6 & 7 times their salary. I rang around various mortgage lenders and was offered 7 times my salary by 2 lenders.
Click to expand...

are you a PQ accountant or low down a guaranteed civil service salary scale of some sort, if they are lending against future income that is not guaranteed by exams or scales then that was a truly insane multiple

also was it IO or Repayment mortgage ??
 
CapitalCCC said:
I was thinking that too, the guy who has a wife that is going to leave him unless she gets a new BMW...well he must be VERY stupid or VERY VERY ugly!!!
Click to expand...

Well he's not very,very ugly, but I will agree on the stupid part. But as you are aware, people will do desperate things in order to save a marriage, especially when there are kids involved.

"Till death due us part, in sickness and in health, for richer or poorer"

I personally think she is sick and going through an early mid life crisis.
 
Status
Not open for further replies.
Menu
Log in
Register