I normally don’t bother writing about this but, today’s supplement left me feeling like I was in 2006/7.
The prices on property have just gone crazy again. Is there a mass dump of expensive houses going on due to property tax? I would estimate that 80% of the houses were from 600K to a million. And plenty of crap property too.
A rough calculation; an 800K house at 75% LTV (200K deposit) is +3K per month on 30 years. That’s a Gross Wage of approx 6K per month just to pay the mortgage. If you want to keep mortgage at 33% of your net income, you’d need to be grossing +210K per annum joint (all crude calcs)
I’ve read all the “is it starting again threads” but today really struck it home to me.
Most of the high end stuff is likely to go to existing millionaires and foreign buyers. 75 % Mortgage is not really an option in the million euros bracket.
Are there enough existing millionaires and foreign buyers to meet supply of 80% of properties in IT Property Supplement? My only conclusion is that there are still loads of punters prepared to put themselves in hock to the banks for the rest of their days. It worked for the last generation but not for this one. We need a good ole spike in interest rates up to 10% to sort this out.
The houses advertised in the IT property supplement would normally represent the higher end of the market. There are a lot of vendors in that segment who have been holding off for years now, because their house wouldn’t sell for anything near the price it’s worth (their mindset). Now, they’ve heard the market is on the up and they’re scared they’ll be left sitting if they miss this opportunity to get out.
Looking at the PPR, approx 300 houses out of 2550 have sold for more than €500K, 190 for more than €600K, 130 for more than €700K and 90 for more than €800K.
And, as carrot and stick pointed out, the majority of these houses are not mortgages, although as for this notion of foreigners coming in an snapping up the bargains at the top of the irish market
If you’re a millionaire, or a high net worth individual, surely it should be easier to have at least 25% of a mortgage? Otherwise, you’re not really a millionaire. (Reminds me, I must to the euro lotto! - I want 1% off anyone who I’ve just reminded and wins)
It certainly feels like there has been an uptick in what sellers want. Then again, I’m always looking for something for nothing.
