BoI the one to monitor


#881

Nah probably not in the cities, but I reckon a 2-up, 2-down redbrick (i.e. ex-corpo house) in livable nick will fall to this. In the outer burbs and the countryside I think you’re right.


#882

I was going to make a point about end-destination homes being unrealistic FTB’s in 1993 (I bought an apartment then which I was very happy with for many years) and how the expectation of buying ones dream home as an FTB was a CT creation. I still get slightly peeved by general sympathy for younger relatives under-water by buying family homes as FTBs when a two-stage route to a family home seems more normal to me. I was then going to question the hardship of buying the above ex-corpo as an FTB vv an apartment. Then I realised that I was really only charting the underlying movement of credit availability and the human behaviours were second-order to that fundamental controller of all our lives.


#883

Had assumed that they would just transfer the mortgages into BOI?Cant see them lining up to buy it except at a fairly discounted price?


#884

Equally this type of money buys a 3 bed in a working class area.


#885

From IBEC Survey on average earnings in Manufacturing / Wholesale & Distribution in Dublin (though now a year out of date)

Employees earning <30k
Unskilled production worker (24k)
Semi-skilled production worker (29k)
Forklift Driver (27k)
Van Driver (29k)
Cleaner (24k)
Canteen Assistant (24k)
Junior Technician (28k)
Trainee Lab Technician (23k)
Junior Clerical Grade (28k)

Employees earning >30k
Skilled Production Worker
Craft worker
Fitter
Electrician
Mechanic
Toolmaker
Production, Stores & Craft Chargehands
Security Guard
Production, QC, Stores & Technical Supervisors
Intermediate & Senior Technicians
Graduate, Junior, Intermediate & Senior Engineers
QA Engineer
Draughtsman
Lab & Senior Lab Technician
Chemist
Intermediate & Senior Clerical Grade
Programmer
Analyst
Systems Analyst
Systems Supervisor
Network Administrator
Technical Support
Junior Sales Rep
Sales Rep
Marketing Exec
Telesales

I don’t have any other sectors to hand but Finance related professions, about 3 years ago, were earning approx 25% more than manufacturing. I don’t know if this is still the case.


#886

Don’t know about ibec’s survey, but any time I had a cleaning or canteen job it was always minimum wage. So 24k sounds a bit off to me. :confused:


#887

How many people on 30k per year would have saved up 30k? I’m guessing none.


#888

You’d be amazed. Not that they would maybe want to buy houses with it. Not here anyway :wink:


#889

The people earning <30k in Dublin are low or unskilled workers, or else trainees. These aren’t the people driving property prices so reducing the multiple they can borrow is going to make sod all difference to the market.


#890

Well if you were living at home it’s probably quite possible.


#891

You have to ask why is this happening? I don’t know, but as a guess I would think of 2 reasons, first as this group represent the average wage then they also represent the largest borrowing group. If a bank wanted to limit mortgage lending this would be their target group.

The other reason I believe is that the banks know that the average wage is due to be targeted by tax increases as the gov looks to run a surplus in the next 2-3 years

Finally this is the start of the official retrenchment of bank lending, as rates increase with open market access and the gov moves towards a surplus the ratio multiple for higher earners will fall too. The average ratios will return to its long term averages of 3-4 times earnings


#892

You seriously believe that single income households of
Unskilled production workers
Semi-skilled production workers
Forklift Drivers
Van Drivers
Cleaners
Canteen Assistants
Junior Technicians
Trainee Lab Technicians
and
Junior Clerical Grade
represent the largest group of home buyers in Dublin???


#893

Indeed lets add careers for the old, junior nurses all other manner of emotive flotsam.
The average wage is €35 k that’s a fact, the reason why this group constitute the majority of lending is because there are lots of them. I’m not referencing as this is common knowledge.

The reduction in ratio is not just for Dublin it’s for Ireland


#894

I’m guessing it’s true to say the wage distribution is positively skewed? i.e. the median is less than the mean?


#895

I’m taking the people that the IBEC survey puts on earnings of less then 30k. Have you any back up for the careers above that you mention.

That’s the national average industrial wage. Average wage in Dublin (which is where I’m talking about) would be higher. The median household income in Dublin is approx 60k i.e. of the 530,000 households in Dublin, 265,000 earning 60k are more. How far down do you reckon you have to go before you get to households earning 30k?

Just because there are lots of them doesn’t mean they are active in the housebuying market. The average FTB age is around 29-30 (I think, could be +/- a year). How many single 30 year olds on less than 30k do you think are looking to buy in Dublin and whereabouts?


#896

Esselte, you are splitting hairs

The article refers to an example of a first time buyer on €30k, you are referring to household income, that’s not mentioned. The traditional formula was 2.5 times the higher wage and once the lower wage. Whether a Dublin average earner is slightly above or below this will be unimportant, it’s in the same category. The article simple said that higher wage earners would still get 4+ times earnings

Clearly the bank has issues with average earners for whatever reason and has changed its lending criteria accordingly. I don’t think an average household income of 60 k which was the average back at the top of the boom 2007 and has fallen to about 50k since, independent.ie/business/pers … 16473.html, is relevant and that doesn’t account for the drop in after tax income due to various taxes.

This is the problem for the banks as net income drops, mortgage ratios have to fall


#897

No I’m not. I’m trying to see who exactly will be affected by the change and as I said, it will be 30+ year olds on less than 30k buying on their own. How many buyers fit that profile and where do you think they’ll be buying?

The traditional formula was 3.5 first salary + 1 x second salary back when we had double digit interest rates. Sticking with a rigid formula and ignoring the interest rates and the cost of borrowing is nonsensical.

As for incomes:
irishtimes.com/business/econ … -1.1360823
trueeconomics.blogspot.ie/2013/0 … -2012.html


#898

Indeed most of the ‘saving’ is paying off debt, so its not as if deposits in banks are booming rte.ie/news/business/2013/06 … ts-in-may/

I take your point on 3.5 times vs 4.5 times while interests are low now house price inflation ran well ahead of booming wages in the past 10 years and still remain well above average ratio’s of earnings to price. Household disposable income rising by 2.5% is meaningless in the context of the inevitable cuts to social transfer and tax rises due in the next 4 budgets. The banks will be looking at this

The narrow demographic you mention is not my interpretation of this, 30k salaries are not specific to 30 year olds and the trend is the thing to watch, mortgages are falling in number, value and as multiple of earnings. This process is set to continue in my opinion across the entire earnings range because of the economic backdrop, in particular I expect to see a big rise in interest rates on all debt with access back to the markets


#899

Bank of Ireland have closed a few branches, on the quiet, in recent months / years.

Another closure is on the cards. Pearse Street BoI is closing in 6 months time.


#900

My branch of nearly thirty years, Talbot St., closed a few months ago.