Central Bank Consultation - Policy for mortgage lending


#1269

The Indo sensationalises it of course

‘Trapped generation’ hit by new changes to mortgage lending rules
independent.ie/business/per … 62521.html


#1270

The dip in FG poll numbers seems to be having an effect on Leo…

Mr Varadkar said that he had bought his home in his mid-20s using a 100 per cent mortgage that was available from banks at the time, but acknowledged “that is now very difficult for people”.

Leo looking for the rules to be relaxed


#1271

I think the slight price downturn in Dublin has fired up the base: estate agents, builders, architects, developers etc.
They want FG to do the right thing now, to get more gas into the explosion. We can’t have these new build prices NOT going up by 5-10% each year. And what about the old second-hand market? We still have 10-20% of “recovery” to go yet!
:crazy_face:
Sickening stuff…


#1272

Agreed. This is staggeringly irresponsible from Varadkar. He must be under serious pressure from the vested interests.
Brexit uncertainty should suppress price rises IMO, regardless of any relaxation of lending rules.


#1273

I read this differently. The Taoiseach is admitting the Irish government has no control of the banks so he is reduced to supplication.

In the past, our governments gave the banks free rein - the Central Bank/Patrick Neary was the banks’ poodle, not a watchdog. Now, the ECB and European Single Supervisory Mechanism are firmly in charge and the Irish property market will never again pose a threat to financial stability. The air going out of Dublin’s property bubble and, with supply coming on, the market in Dublin and nationally should stabilise over the next few years.The developers etc. are twisting the government’s arm as hard as they can but the government was always opposed to the mortgage caps which limit the developers’ super-profits.

With 20K.+ new-build apartments coming on to the Dublin market (not counting the Glass Bottle site), the appetite of foreign REITs for BTL in Dublin will be tested and the prices for Irish buyers will be limited by the mortgage rules. Currently, the morgage rules are driving up the price of everything FTBs can afford but in a few years, no-one will pay 300K. for an artisan cottage in “totally broken and crime infested” parts of our capital city or 3-bed semis in the soft and dreary Midlands.

No-deal Brexit is a large pin hovering ever closer to the Dublin commercial real estate market and we could be in for a wild ride if Trump is re-elected (and you thought he has done his worst!!) but the Europeans will allow us to respond to these risks if and when they materialise.


#1274

I can only surmise that he is coming under pressure from VI’s, it would beggar belief that he would push people to get into more debt than needed.


#1275


But, hurry up and borrow more before prices get too high…


#1276

What a load of crap. He’s saying: “that’s where you get back to what you had before, credit-fuelled construction and pretty shoddy construction as well”. But a situation with CB lending limits would not be credit fuelled, it would be demand led. The reasons we can’t build more houses more quickly are:

  • Credit on the developer side – the banks won’t lend for a development without an outrageous profit margin because of past volatility;
  • Developer costs – labour is scarce and expensive, and the government is trousering an iniquitous amount of tax from all aspects of construction;
  • Land hoarding – if the developer can’t make an outrageous profit now, he’ll wait until he can … and the government will let him away with it.

So the solutions are:

  • Announce that the CB limits are in place forever; don’t bother imagining a future without them;
  • Reduce some of the taxes on construction to increase developer margins;
  • Tax the living shit out of land hoarders.

#1277

So the solutions are:

  • Announce that the CB limits are in place forever; don’t bother imagining a future without them;
  • Reduce some of the taxes on construction to increase developer margins;
  • Tax the living shit out of land hoarders.

I agree with a minor tweak.

Reduce tax on construction of shelter.
Where shelter is a home that sells for no more than 4 times average industrial wage.

P.S. iniquitous is a new word to me. Great word.


#1278

In the past, our governments gave the banks free rein - the Central Bank/Patrick Neary was the banks’ poodle, not a watchdog. Now, the ECB and European Single Supervisory Mechanism are firmly in charge and the Irish property market will never again pose a threat to financial stability. The air going out of Dublin’s property bubble and, with supply coming on, the market in Dublin and nationally should stabilise over the next few years

Agree with the stance taken to date by the CBI on mortgage caps, but on the issue of non performing loans and strategic default, we’ve not seem much evidence of independence from the ‘new’ Central Bank/SSM.

They have pushed the banks hard to unwind their bad books, crystallising losses for the Irish and European taxpayer while not doing anything to help encourage and enforce necessary repossessions and recycling of properties to those who can and will afford them. The fact that this approach puts Ireland firmly at odds with Western norms for property rights and lending with recourse from an institution that supposedly lives by hard and fast globalised rulebooks is the dead give away. Part of the problem, and not the solution.