‘Unsustainable’

at

This morning.

Via Irish Times:

The average deposit needed to buy a home is now €52,500 for a first-time buyer (FTB) and €135,000 for a mover purchaser, according to figures from the Banking and Payments Federation Ireland (BPFI).

This is more than double what it was less than a decade ago, reflecting the rapid increase in house prices since the low point of the crash in 2012 and the Central Bank of Ireland’s mortgage lending rules, which require buyers to have bigger deposits relative to the value of the property.

The BPFI’s latest housing market monitor includes a loan-level analysis of the source of deposits in the first half of 2021.

It found that nearly 42 per cent of FTBs and 25 per cent of mover purchasers used gifts as part of their deposits.

First-time buyer needs €52,500 for average deposit (Irish Times)

Meanwhile…

Social Democrats Housing Spokesperson Cian O’Callaghan said:

“An entire generation has been locked out of the market. Average deposits are now more than double what they were just 10 years ago. How can anyone on an average income afford to save €52,000? Homeownership is simply slipping out of reach for many young people.

The pressure to save vast sums of money, while also paying incredibly high rents, is putting people under huge stress and strain. It is therefore unsurprising that four in ten first-time buyers are reliant on gifts from parents in order to fund the purchase of a home.

“House prices have shot up by over 12pc in a year. This is unsustainable. The housing market is out of control and there is no evidence that the Government’s housing plan is working. In fact, things are getting worse instead of better.

“The solution to this crisis is crystal clear – the State must build thousands of homes that are genuinely affordable. This can be done by using public land. To date, this has not been done anywhere near the scale that is required. We need 10,000 affordable homes to be built each year.”

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18 thoughts on “‘Unsustainable’

    1. johnnny

      Your conflating a positive long term funding source with a short term clean up crew.

      It’s not complicated.

      Pension funds invest long term in high quality assets,to provide income,for example a prime D4 apartment building,state the art,best in class,they like pictures in their lobby of what they own.

      1. SOQ

        Well it doesn’t really matter if it is long term or not once they are eating into the new housing stock, therefore keeping prices artificially high. I don’t know too much about this but aren’t such banned in the UK?

      2. Cú Chulainn

        Except in Ireland where funds, with active government support, pre buy a large amount (hence SOQ’s question) of housing stock which drives up rent and asset value. Unlike NYC, there are no effective rent controls here.

        1. johnny

          paddy calls me in NY.

          he has control off a site in D4 to build 50 apartments on.

          option A-sell them individually or one at a time

          -but he has wait get paid until they built,then sold,has try find a loan build them.

          option B-i arrange a german pension fund to buy them all now,today.

          all he has do now is build them,with this contract of purchase and sale for them all,its no longer a speculative development, he can no go get equity and construction loan,do what he does best,build them.

          really only applicable at higher end,but pension funds are not the problem,nor true vultures,they long gone.

          real estate investing is say like the NBA/NFL if ya cant play in NY or LA go play in europe,who do you think wants go work on Resi deals in Dublin,only a bunch of cowboys who cant make it NY or Miami.

    1. Col

      That shows specific houses reducing their asking price, presumably because they were looking for too much to begin with.
      That is not directly related to what is reported above.

  1. scottser

    make no mistake, the government’s housing plan is working correctly. inflation is the friend of the investor and the enemy of the casual consumer. it was always thus, and you’d be naive to believe otherwise.
    if you think there should be a radical change to housing supply and consider housing as a human right then vote for a radical party with the balls to take on the banks, investors, developers, landowners and builders. and of course, don’t be surprised when the average homeowner gets upset when the brakes get put on his or her house price inflating and their retirement nest egg vanishing.

    1. goldenbrown

      ah. the element of surprise is already long gone scottser, long gone, you can be sure that the potential horror of the likes of SF sweeping in on a political upheaval is already well priced in:

      EU diplomats are ‘scenario planning’ for a Sinn Féin government….
      https://www.irishexaminer.com/news/politics/arid-40759770.html

      NOTHING bar a WW3 and Dublin getting erased in the process will shake the vampire squid off at this stage

      the coming generations are fupped and will 100% establish their post-C19 lives elsewhere

    1. goldenbrown

      and for the vast majority of those Mam and Dad’s involved here I guarantee you this is thin end of the wedge territory….late 50’s ejecting their long worked and banked €100k safety vest to little Johnny so the happy couple can scrape enough together to pay in to the lotto for a plasterboard box….question being what do they live on 15 years from now? pension? lol they better hope Johnny loves them.

  2. Nullzero

    To quote Chomsky “The country was founded on the principle that primary role of government is to protect property from the majority, and so it remains.”

    We do like to ape everything the yanks do after all.

    We have housing for the rich and the people who bless ’em just don’t feel like working.

    All of us working idiots get the have our trousers pulled down and be bent over while the state has it’s way with us.

    A decade of Fine Gael in power looks like this.

  3. John F

    I am not sure what the alternative is.
    The high deposits required to access mortgages are an absolute pain. But without them properly prices would explode short-term as banks give out bigger and bigger loans and eventually we would have in another massive crash.
    It’s all well and good saying change the current government with a more, left-leaning one who will impose wealth, along with more taxes and chase the foreign direct investment that has been key to this country’s success over the past 4 decades out to different markets.
    Where would be then? Massive levels of unemployment, poor state services and damn all taxes to fix them?
    Rent controls could help improve things, but costs like maintenance, lpt, management costs keep going up. In fact, between all taxes almost half of rent goes to the government from small landlord’s. Larger hedge fund investors get sweeter deals. Perhaps greater tax relief could be used in exchange for alleviating rents, I don’t know.

    1. goldenbrown

      I think that’s possibly the wrong question, more a case of “would Ireland have the guts or the interest to radically overall the system and would it’s owners (EU/banking/REIT vehicles) casually permit that to happen?”

      imho that would be a big fat NEIN

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