Current public sentiment towards the housing market?

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Realistically, how much should a bank lend a couple earning €60k/year. The old lending rule 2.5 times first wage, 1.5 times second wage was chucked out the window years ago. If it was still in place the a couple on average industrial wage could not borrow more than €120k. Even if the bank would lend 4 times combined wages that would still be only €240k, considering the average house price in Dublin is over €400k. Plain and simple most are priced out of the property market.
 
BigM said:
I sincerely hope we get a dead cat bounce early next year - I'm selling my rental property once the current lease is up in Jan.[in 2007]"
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I've had Landlords try to end my lease before it is due to expire so they can sell. I am not sure what the postion is now, you might be able to break the contract if you give genuine reason allowed by law and are in fact lying then you can be prosecuted.

All tenants are entitled to at least 4 years lease after 6 motnhs continuous occupancy, but ifyou are selling or moving yourself or a family member this does not apply.

However you better be telling the truth ;)

I think it is at least human to let you tenants se eout the lease and if they want to leave sooner then make it clear that you have no problem and you'll give them back their deposit pronto rather than forcing them out.

SO you might get them out of their own choice, Its very reasurring to know that they could start searching and if they find something before Jan they can leave sooner without negative finacial loss or duress. Its to your advantage.

As a tennat myself I am appalled at the private rental sector an the sicken disaster that is about to unfold.

Its amazing how quickly this collapse is moving.
 
miju said:
firstly , everyone in the world would like a cheap house to buy or rent (except of course for pro / spectulative investors) , it's not a sentiment unique to this thread
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I agree, but there is also a huge swell of negative sentiment towards our economy on this thread. I don't think it's rational analysis. I think it's emotional. People want to see a crash.

miju said:
secondly, to flip what your saying , how about not investing and letting the greater fool get burned and even though your wages are lower than the people "ahead" of you, because you are in actual fact in real terms well ahead of the game when the bubble pops because while everyone else is drowning in the pool and reaching for a life belt your sitting idly by on the side sipping sangria and catching some sun watching in amazement :)

it doesn't all work the one way you know
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There's absouletely no difference between that and making out like a bandit at others expense during a bull run. Neither are particularly desirable traits, but people will do both...

whathome said:
I think you might be getting confused between

a) Sentiment - which is how people feel about the state of the market now and in the future (that's what we are discussing)

and...
b) Desire or yearning for cheaper property - that is always the case for buyers. (which we are not discussing)
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I think they're stongly linked in many posts on this thread. Maybe I'm misinterpeting others...
 
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Open_Window said:
As a tennat myself I am appalled at the private rental sector an the sicken disaster that is about to unfold.

Its amazing how quickly this collapse is moving.
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I think one of the main things that has kept housing from being a thorn in the Guberments side is while a lot of people were gaining by their property going up those that missed out could at least afford a nice place to rent.

If in the short term** rents go up but sellers are sticky and prices stagnate people will have nowhere to live and this will become the issue leading up to the election.

**And it will be short term, see other thread
 
partisan said:
... if wage increases didn't correlate with inflation to some degree, even then, we'd be long bankrupt [snip]... If your wages don't keep up, and you can't afford to invest in other assets you'll be left behind. It's harsh, I don't like it, but I think that's the way it is and thinking otherwise may result in you being left behind yourself (how many of us challenge our bosses when our pay rises don't match or beat inflation? My attitude is, if they don't it's time to leave).
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What you are talking about is a wage/price spiral.

Business is global, inflation is local. There is absolutely no guarantee your boss can afford to pay you more than inflation (which will itself only fuel inflation anyway) or he may go out of business himself.

Your attitude suggests some harsh realities lie await.
 
http://www.unison.ie/stories.php3?ca=9&si=1709909&issue_id=14793
"I need to earn €50,000 just to cover the costs of childcare and the mortgage - that's before we even start spending money to live," she said.

That about sums it all up. Average families are just getting by, what happens when there is another spate of interest rates increases. People will try sell their homes, move into rented accommodation, which might already be happening as there is a scarcity of rentals on the market.
 
partisan said:
I think they're stongly linked in many posts on this thread. Maybe I'm misinterpeting others...
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That's ridiculous - Sentiment, and buyers yearning for cheaper property are not strongly linked. If that were true, sentiment would NEVER change. Buyers always want cheaper property. Have you ever heard of a buyer saying "If only I could pay a bit more for that house I'd be happy"?

Sentiment does change however, people go from thinking "I better buy now before prices go up" to "I'm going to hold off, prices look like they might fall". Before and after that change in sentiment, they'll always be yearning for cheaper property.
 
JayDub said:
Realistically, how much should a bank lend a couple earning €60k/year. The old lending rule 2.5 times first wage, 1.5 times second wage was chucked out the window years ago. If it was still in place the a couple on average industrial wage could not borrow more than €120k. Even if the bank would lend 4 times combined wages that would still be only €240k, considering the average house price in Dublin is over €400k. Plain and simple most are priced out of the property market.
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As Irish Banks package up most Irish mortgage debt and sell on the money market as Residential Mortgage Backed Securities. The amount that the banks can lend will depend on the money markets appetite for Irish mortgage debt. As lending standards are super relaxed and the risk profile of RMBS seems to be rising globally I cant see the banks being able to flood much more money into a highly speculative market. In fact we may see a squeeze on credit.
 
ecstatic said:
Well i for one dont believe for a second the vacancy rate of 15% touted by this and many said subject experts when it comes to accomodation in dublin.
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Have you read the thread?

15% vacancies relate to empty properties countrywide, not rentals.

ie..speculators sitting on them with capital appreciation, they have not been rented out.
When cap. appreciation goes which its been doing now, whats the point of them holding on to them in a falling market and lose their profit?
They are dumping them onto the sales market along with landlord investors who were there to make a quick buck hence shortage of rental accomodation as you describe.
 
whathome said:
That's ridiculous - Sentiment, and buyers yearning for cheaper property are not strongly linked. If that were true, sentiment would NEVER change. Buyers always want cheaper property. Have you ever heard of a buyer saying "If only I could pay a bit more for that house I'd be happy"?

Sentiment does change however, people go from thinking "I better buy now before prices go up" to "I'm going to hold off, prices look like they might fall". Before and after that change in sentiment, they'll always be yearning for cheaper property.
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You make a fine intellectual point. What I meant was that a lot of the posts have emotional underpinnings. Either my English is terrible, or people like to argue with me. Maybe it's both ;-)
 
Dont panic the correction is over, we had our soft landing and prices are taking off again. I was talking to somebody today who was talking to somebody who works in daft and the price of houses has started to go up again, it was just a temporary correction after the huge increase in prices in the spring.
House price increases will continue to rise at 5% above the rate of the economic growth (i.e. 12% next year!!!)
:rolleyes:
 
Open_Window said:
I've had Landlords try to end my lease before it is due to expire so they can sell. I am not sure what the postion is now, you might be able to break the contract if you give genuine reason allowed by law and are in fact lying then you can be prosecuted.
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You can end the lease early as long as you put the house on the market within 3mths. If you decide not to sell the original tenants have to be given 1st refusal of the new letting.

I don't want to end the lease early - I'm not going to kick my tenants out of their home just in time for Christmas! And there's not much point anyway - even with just the 1mth notice I'd be putting the house on the market in December which is not exactly prime selling season.

But I will let them know next month what my plans are so they'll have almost 3mths to find somewhere else (or even make me an offer - who knows?)

It was the realisation that a purchaser (if there are any left!!) on above-average salary would have to pay around 10times his/he salary (or 5x joint) to live in an ex-council house that persuaded me that the market has indeed peaked.
What the commmentators refuse to acknowledge when they go on about 'rate hikes pricing FTBs out of the market' is that it is the market that's pricing them out, not the IRs. It's very simple really:
FTBs cannot afford to buy => prices must come down
not
FTBs cannot afford to buy => must make money cheaper/more accessible
 
random2006 said:
Dont panic the correction is over, we had our soft landing and prices are taking off again. I was talking to somebody today who was talking to somebody who works in daft and the price of houses has started to go up again, it was just a temporary correction after the huge increase in prices in the spring.
House price increases will continue to rise at 5% above the rate of the economic growth (i.e. 12% next year!!!)
:rolleyes:
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For a second there, I thought you were trying to be serious :D
 
random2006 said:
Dont panic the correction is over, we had our soft landing and prices are taking off again. I was talking to somebody today who was talking to somebody who works in daft and the price of houses has started to go up again, it was just a temporary correction after the huge increase in prices in the spring.
House price increases will continue to rise at 5% above the rate of the economic growth (i.e. 12% next year!!!)
:rolleyes:
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Oh no! Better jump in now and buy that house i saw that dropped €50k during the wk before they add it back on to the selling price again!!!
 
Duplex said:
Just a note on wage inflation in the construction sector (the largest part of the private sector). Its running at an annual rate of 3.7% CPI is 4% (public service is about 6%). So effective wage deflation.
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So Austin is gonna be pluggin those mortgage packages to the public sector to cover next years glorious 7%

It was noted by the other speaker if they are 4% out in their prediction its a disaster, and remember this, they got last year HPI totally wrong if I rember by something similar to 4%, in that it was higher so they really can't tell. Expensive guess merchants they are.
 
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