Residential loans did not bust the banks or the country, it was the commercial loans.
Yes there was thousands in negative equity but if they could work out the loans with the banks then over time these work themselves out.
Sweden’s issue with their banks didn’t bust their country in 1991. They had a bank crises which they could work out. The loans in Anglo and the rest of the banks that bankrupted Ireland and brought in the IMF were commercial.
God bless the house builders.
How have wage increases and cost of living / inflation increases correlated since the end of the Celtic Tiger era?
@Fran, how could I afford to go out 4 or 5 nights per week on trainee accountant wages in 2003?
Granted my rent was around €400 per month but still.
In the UK it’s 4.5 times your salary. Earning 70k and only being able to borrow 245k is a bit ridiculous. There should be a cap but not set as low as our one is.
20% and 3.5 times is excessive.
It is quite clearly taking people out the market who are still participating in the form of rent.
As you advance in your chosen career and pay increases incrementally your lifestyle tends to expand accordingly - nicer bottle of wine or whiskey, restaurant, holiday etc. Add in the car, the tv, the gym, the phone etc and you’ve built yourself a golden cage
If you buy a house and have a mortgage it is sort of like enforced saving as that goes out and then whatever you have left you run your life on. People have always struggled for first few years of buying a property and then adapt. The difference between now and then is people expect to move into a perfectly decorated and furnished home and not do it up/furnish it over time and that adds to strain. Lack of inflation also means debt has not been inflated away.
I’d also have been mindful that up to a certain age you are generally healthy but then statistically more likely to get sick/cancer/chronic disease and if you don’t have a mortgage then you won’t get one. I would suggest early 30s is optimal time to buy a home
Increase it to 10% and 4.5 times. What happens in terms of being able to buy a house/apartment then - very little as the guy beside you has just had his amount increased too. The only vague argument in favour is that you get more house building but seeing as the construction sector is already maxed out at the moment and has minimal additional capacity I’m not sure there’s much benefit.
I believe brokers can’t use either AIB or BOI due to their market dominance, or some weird reason like that.
Also - 20% is for second time buyers i.e. those with property already. I accept that it may not be suitable now, I’m in that situation myself, but these aren’t the homeless we are talking about.
I think BOI withdrew from the broker channel but are indicating that they will return to it shortly.
We were told that either the Central Bank or the Financial Regulator instructed them out of the broker channel until their competitors had enough market share.
Not necessarily as these things are circular.
As I said, the locked out people are still paying rent and can afford to rent. This makes property more desirable as an investment.
The State don’t have a problem with it as it is not holding up development at this time.
I’m not taking the piss Tim. Sometimes you just aren’t very clear.
Fair.
Absolutely. A clear solution here is a reduction of the 20% deposit when applicants can show they’ve been paying a certain amount of rent for a prolonged period. It’s a perfect solution for those worst hit in the rent trap.
Yeah - but in most instances property investment is tilted towards apartments while desire to buy is tilted towards houses. I would agree that it’s all connected though and intervention in any part of the market to assist a particular cohort usually hurts another and also has unintended consequences.
3.5 x income may be pretty risk averse but considering the complete mess we got ourselves in the last time I think its prudent overall. If we can tie property price growth to at or near wage growth over a period of time we may finally have a stable property market for the first time in a generation.
That would make sense far more than increasing income limits.
Lads losing the run of themselves telling their life storys. Others logged on to flex.
The problem is a supply issue. What happens when everyone has easier access to the funds? It will just inflate the market even more.
Has anybody thought of a massive programme of building social housing
Sort of makes sense when you think about it
Yes what’s needed is more Darndales, Jobstowns and Southills