Thought I’d share this here: Austria has very recently introduced many lending rules similar to Ireland that didn’t exist there before
Thought I’d share this here: Austria has very recently introduced many lending rules similar to Ireland that didn’t exist there before
8 comments
Amongst the new rules are:
– Max 40% of income per month to mortgage
– Min 20% down payment
– Max 35 years mortgage term
Also interest rates have shot up from <2% to ~3%
Wonder how that will work out.
Nooooo I should be allowed to saddle myself with unreasonable debt that I can never pay off and then use the system so I never get evicted even though I never pay the mortgage.
The alternative to those kind of rules is that you now have tons of over-leveraged borrowers with unaffordable mortgages, and as soon as there’s an economic downturn or a collapse in housing prices, [everything goes to shit](https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008).
In any case, relaxing lending rules would only exacerbate the housing crisis and drive housing prices up, so it would be the opposite of a solution.
Build more houses. Fuck these greedy dinosaurs profiting off young people.
The root of the current crisis is the overly- generous borrowing terms of the Celtic Tiger which led to the mother of all crashes. The mother of all crashes put the building sector into a deep freeze for a decade, and meanwhile the population continued to growth strongly. Building has picked up in recent years but no where near enough to fill the backlog and the population growth is still accelerating from immigration. So less restrictive borrowing terms doesn’t really help.
The big issue is the first number. 450k for an older, medium sized house. I was recently in connecticut, a house on a lake in a nice town was 300k. Sure you can pay 800k, but that gets you 5,000 sqft, in a nice area. The price we pay for what we get is astronomical. Building materials went up, sure, but the lack of supply is inflating prices way beyond their inherent value (cost to build). More houses outside the main cities would be more cost effective, as land is way cheaper.
If you allow people to borrow more it doesn’t magic up any more housing. Prices just go up
For real?
Anyone that thinks that “it would be better” if we had 40yr or 50yr 100% mortgages IS A FUCKING IDIOT