True, but if they were single they would be basically precluded from ‘getting on the ladder’. With city centre one-beds now around the €500/sqft mark or more (up from €200/sqft low) and with banks self-imposing an 80% max LTV on one-beds, your colleague based on 50k earnings would need a 75k deposit coupled with a 175k mortgage (3.5x earnings) to get off the rental market into a €250k shoebox. I think a 29yo single person on 50k would genuinely struggle to save €75k net of tax.
Of course it is their ‘lifestyle choice’ to be single - it comes with certain advantages, but the cost of housing is substantially increased and we are a nation with an increasing number of single-person households. I really do think that something needs to be done to cater to the accommodation needs of young professionals, who are exposed to both low wages and the full brunt of Dublin’s expensive housing. Of course students too - but there are numerous major student accom developments under construction already. I find it astonishing seeing ads on Daft from people in their late 30’s subletting rooms in their rented apartments/houses. I probably shouldn’t find it surprising - and I’m sure some of them want to live like that - but I just know that it wouldn’t appeal to me, and I’m sure for many of them it’s an question of necessity over choice. Everywhere I look, I see 2 bed apartments now at €2,000+ pm, 1 beds €1,500+, etc. Even split between people sharing, it is total madness for basic accommodation in this fairly basic city of ours.
Something has to change, but that something is not lending limits. When we have hundreds or thousands of houses in South Dublin and surrounds for sale at reasonable prices (i.e. 50-70% of boom-time peak equivalent prices) that people cannot buy because of lending restrictions and the rental market trap, then I’ll believe a change in LTV regs is needed. At the moment there is no such problem, it’s still a question of multiple parties fighting for the same scarce commodity, which ends up with prices spiralling higher. These CB rules are saving us from a lot more madness than is already out there.
I don’t see how we can sympathise with / lament the plight of negative equity mortgage holders (and of course I have some sympathy for genuinely struggling people whose lives are on hold, with families couped up in a one bed shoebox) and at the same time have so much cheerleading for a change in CB rules to facilitate a potential repeat of the same issue by pumping up prices to Celtic Tiger highs once again. The mind absolutely boggles and it really frustrates me to see anyone in the media criticising the rules. Even if it is cheaper at this moment in time to buy than rent, that is in part due to low-ish interest rates and a f***ed rental market with insanely limited supply and market distortions, such as thousands of people having rent paid by local councils. Once we continue to build new properties, that is key, and will I think alleviate issues with the rental market.