New Central Bank Mortgage Rules

Watcher2

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I haven't seen a thread on this yet but if I just missed it, feel free to merge.

First-time buyer deposits cut to 10% as Central Bank eases mortgage rules

CB has relaxed the 20% deposit rule to 10% for all. Personally I think they should have restricted the mortgage term to no longer than 25 years. I thought they should have done that all along but since they loosened the 20% deposit rule, they should have tightened the length of mortgage term. They acknowledge the 20% rule was doing a good job but then they change it. Go figure!!
 


Spanner Island

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With prices going the way they've gone in recent years... in Dublin and other urban areas at least... 10% now is probably the equivalent to 20% a few years back anyway...

Property prices need to fall to reasonable levels... they should be around 4 or 5 times the average industrial wage - a wage rate which is already high in Ireland when compared to elsewhere (despite all the whingeing from trade unions).

Enabling people to borrow to buy extortionately priced property isn't going to solve much at all.
 

captain obvious

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What do they hope to achieve by this ? In a sellers market, making money available is only going to do one thing in my opinion.

Also, if the CB is in the business of stabilizing the banking sector, why are they effectively making credit easier to people who have less credit history than current mortgage holders. All that in a market with historically low interest rates ?

What are they at ?
 

Watcher2

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With prices going the way they've gone in recent years... in Dublin and other urban areas at least... 10% now is probably the equivalent to 20% a few years back anyway...

Property prices need to fall to reasonable levels... they should be around 4 or 5 times the average industrial wage - a wage rate which is already high in Ireland when compared to elsewhere and despite all the whingeing from trade unions.

Enabling people to borrow to buy extortionately priced property isn't going to solve much at all.
Well, I don't think even in Dublin prices have doubled in the recent past few years but I take your point. I am all for low house prices. High house prices do no one (of any use) any use. It only means that there is less money available to put into the economy and drive activity.
 

Watcher2

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What do they hope to achieve by this ? In a sellers market, making money available is only going to do one thing in my opinion.

Also, if the CB is in the business of stabilizing the banking sector, why are they effectively making credit easier to people who have less credit history than current mortgage holders. All that in a market with historically low interest rates ?

What are they at ?
There is a limp dick excuse of higher house prices means more incentive for builders to build houses.
 

'orebel

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I haven't seen a thread on this yet but if I just missed it, feel free to merge.

First-time buyer deposits cut to 10% as Central Bank eases mortgage rules

CB has relaxed the 20% deposit rule to 10% for all. Personally I think they should have restricted the mortgage term to no longer than 25 years. I thought they should have done that all along but since they loosened the 20% deposit rule, they should have tightened the length of mortgage term. They acknowledge the 20% rule was doing a good job but then they change it. Go figure!!
Puff! There goes any illusion of attempting to make housing affordable.
 

gerhard dengler

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With prices going the way they've gone in recent years... in Dublin and other urban areas at least... 10% now is probably the equivalent to 20% a few years back anyway...

Property prices need to fall to reasonable levels... they should be around 4 or 5 times the average industrial wage - a wage rate which is already high in Ireland when compared to elsewhere (despite all the whingeing from trade unions).

Enabling people to borrow to buy extortionately priced property isn't going to solve much at all.
Using the Residential Property Price Register, select an area that you are familiar with and you can see the % change in house prices
in that location since 2011.

https://www.propertypriceregister.ie/
 

RodShaft

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They are trying to repair banks balance sheets.


There is a huge number of properties still in negative equity from loans made a decade ago.

The only way for the banks not to go bankrupt is for house prices to increase so they can slowly liquidate this stock.


Banks have been playing a very long game. All government policy is aimed at protecting them. The mortgage holder or Joe Citizen doesn't feature much in their thoughts, because we don't have advisers or lobbyists sitting down with them.


As prices creep up to the point where banks are not taking so much of a hit, they will start to sell off houses out from under people.

It's already happening, but only generally with people who were at or near positive equity, but unable to keep up payments. Ironically those who tried hardest to keep their homes were generally the first to lose them.


All policy is framed with the notion of repairing bank balance sheets.

What really needs to happen is for the top tier of management to be taken out to College Green, and publicly executed.


Pour encourager les autres.


Sadly, this won't happen.
 

truthandjustice

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The truth is that nothing is selling at the moment, hopefully this will get the market moving before the Brexit crash occurs and everyone moves to Great Britain.
 

gerhard dengler

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Just took a look at https://www.propertypriceregister.ie/ and selected a location which I am familiar with.

In 2011, there were 12 properties sold in that location.
In 2015, there were 4 properties sold in that location.
Interestingly one property at the location sold in 2011 for €350k. In 2015, a property
6 doors up from €350k property, sold for €435k.

If you drive to that location today, you can see perhaps between 6-12 "for sale" signs.
These signs have been up for the best part of the past 12 months at a guess.
 

Watcher2

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The truth is that nothing is selling at the moment, hopefully this will get the market moving before the Brexit crash occurs and everyone moves to Great Britain.
There is fvck all to buy from the sound of things. All we hear is that its a supply problem. Then, our darling genius' in official Ireland bang out demand side solutions. These will only compound the problem.
 

Watcher2

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Just took a look at https://www.propertypriceregister.ie/ and selected a location which I am familiar with.

In 2011, there were 12 properties sold in that location.
In 2015, there were 4 properties sold in that location.
Interestingly one property at the location sold in 2011 for €350k. In 2015, a property
6 doors up from €350k property, sold for €435k.

If you drive to that location today, you can see perhaps between 6-12 "for sale" signs.
These signs have been up for the best part of the past 12 months at a guess.
That would indicate that negative equity is too large for the banks to take such a hit. All we hear is that there is not enough supply so there are surely buyers for those houses. The fact they have not sold would indicate the offers are rejected presumably because they are not high enough for the banks to let the sale through.
 

carlovian

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I haven't seen a thread on this yet but if I just missed it, feel free to merge.

First-time buyer deposits cut to 10% as Central Bank eases mortgage rules

CB has relaxed the 20% deposit rule to 10% for all. Personally I think they should have restricted the mortgage term to no longer than 25 years. I thought they should have done that all along but since they loosened the 20% deposit rule, they should have tightened the length of mortgage term. They acknowledge the 20% rule was doing a good job but then they change it. Go figure!!
There was never a 20% rule for First time buyers.

There was a 10% rule up to 220,000 and 20% of the balance above this.

All the central bank have done is made it 10% on all amounts rather than
have the 220,000 limit.

The 20% deposit rule applies to second buyers and remains in place.
 

Watcher2

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There was never a 20% rule for First time buyers.

There was a 10% rule up to 220,000 and 20% of the balance above this.

All the central bank have done is made it 10% on all amounts rather than
have the 220,000 limit.

The 20% deposit rule applies to second buyers and remains in place.
:roll:
 

im axeled

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I haven't seen a thread on this yet but if I just missed it, feel free to merge.

First-time buyer deposits cut to 10% as Central Bank eases mortgage rules

CB has relaxed the 20% deposit rule to 10% for all. Personally I think they should have restricted the mortgage term to no longer than 25 years. I thought they should have done that all along but since they loosened the 20% deposit rule, they should have tightened the length of mortgage term. They acknowledge the 20% rule was doing a good job but then they change it. Go figure!!
pressure from the baldy git, with the assistance of the banks, developers and of course the cabinet
 

im axeled

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That would indicate that negative equity is too large for the banks to take such a hit. All we hear is that there is not enough supply so there are surely buyers for those houses. The fact they have not sold would indicate the offers are rejected presumably because they are not high enough for the banks to let the sale through.
or the buying public has not the necessary, if they were that value the vulture's would have snapped them up
 

Watcher2

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pressure from the baldy git, with the assistance of the banks, developers and of course the cabinet
So much for "independence" eh?

I also heard on the radio this morning from a property lecturer in DIT that NAMA would have been an influence in this rule change as it would drive up prices and therefore the value of the residential book in NAMA.

FG, the other cheek of the FF @rse.
 

gerhard dengler

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That would indicate that negative equity is too large for the banks to take such a hit. All we hear is that there is not enough supply so there are surely buyers for those houses. The fact they have not sold would indicate the offers are rejected presumably because they are not high enough for the banks to let the sale through.
I think that you're right.

I know from the same location that neighbouring properties to the properties that sold for €350k in 2011 and €435k in 2015 respectively, were selling for between €500k and €700k at the real height of the madness.
 


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