Housing Bubble Bursting

The problem with any of these "experts" is the fact that they tend to look too specifically at property and little else, the real economy is a very different place these days.

This is before you even start to look at limitations to growth, i.e. peak oil and other mineral supply limitations.

The problem with any of these "experts" is the fact that they tend to look too specifically at property and little else, the real economy is a very different place these days.

This is before you even start to look at limitations to growth, i.e. peak oil and other mineral supply limitations.

Zamboni

For your perusal.

http://www.rte.ie/news/2011/1012/keanereport.pdf

Still digesting it myself.

blah

Zamboni wrote: »

For your perusal.

http://www.rte.ie/news/2011/1012/keanereport.pdf

Still digesting it myself.

Thanks for that.
I can imagine some people who were shouting loudly about "debt forgiveness" won't be enthusiastic about the idea of giving their house to the government, renting it back and paying off the balance of the mortgage (Mortgate to rent option). They'll probably realise that not being able to afford a foreign holiday or a new car isn't a problem that's getting government support.

Hopefully the people who really need help (45,000) according to the report can get it from this.

Caoimhín

blah wrote: »

Hopefully the people who really need help (45,000) according to the report can get it from this.

Remember we live in a corrupt Banana Republic. I am certain that solicitors, vested interests and chancers will find a loop hole somewhere or get their "old boys network" to twist and corrupt the system so the ones who deserve it least will be first in line.
Can you name but scheme in the history of the state that hasnt been abused by cute hoors and gombeens?

Its like my auld favourites of the child benefit and over 70s medical card. Many who avail of these do not need the money. The Revenue seem to know what I had for breakfast and what I spent my communion money on. Surely with the click of a mouse tey could determine who is genuinely in need of these important supports?

jmayo

Has anyone noticed when government ministers are talking about "debt forgiveness or rather mortgage writeoffs, they use the line "those that cannot afford to pay and those that are not paying".

How many people out there are actually just not paying their mortgage rather than not being able to pay it ?

I bet there is a sizable percentage of people (anything upto 10%) who have decided to just give up paying and are availing of the fact that banks were precluded from or just not inclined due to market and costs to initiate repossession proceedings.

Caoimhín

jmayo wrote: »

How many people out there are actually just not paying their mortgage rather than not being able to pay it ?

I bet there is a sizable percentage of people (anything upto 10%) who have decided to just give up paying and are availing of the fact that banks were precluded from or just not inclined due to market and costs to initiate repossession proceedings.

The banks and the Revenue know bloody well who cant pay and who wont pay.

jmayo

Was it only me, but the way news last night was read or formulated it appeared to be a surprise or shock to the news department that the Keane report would advise that people whose mortgages were partially written off would have to relinguish ownership of their homes, but that they would be allowed rent them back ?

For some reason to me the way it was announced the media see it as some sort of a shock, whereas to us non mortgage forgiveness types it appears as bloddy common sense.

Maybe I am getting paranoid, but the way the media have been pushing this agenda over the last few months has been seeing vested interests at the back of it.

blah

They did sound surprised that Mortgage Interest Supplement wasn't going to continue indefinitely. As if taxpayer should continue paying the interest on people's mortgages forever, while we all keep our heads in the sand.

Zamboni

jmayo wrote: »

Was it only me, but the way news last night was read or formulated it appeared to be a surprise or shock to the news department that the Keane report would advise that people whose mortgages were partially written off would have to relinguish ownership of their homes, but that they would be allowed rent them back ?

For some reason to me the way it was announced the media see it as some sort of a shock, whereas to us non mortgage forgiveness types it appears as bloddy common sense.

Maybe I am getting paranoid, but the way the media have been pushing this agenda over the last few months has been seeing vested interests at the back of it.

Not just you.
The amount of radio show calls in from the public who are outraged at the prospect of renting 'their' house from a housing body was disturbing.
They seem to think they have an automatic entitlement to 'own' and keep an asset that they have not paid for and cannot make repayments for.
Frankly, the sheer ignorance of Irish people in how the world actually works is frightening.

Monty Burnz

blah wrote: »

They did sound surprised that Mortgage Interest Supplement wasn't going to continue indefinitely. As if taxpayer should continue paying the interest on people's mortgages forever, while we all keep our heads in the sand.

Yeah - so taxpayers pay for someone else's mortgage and their own at the same time, or even better - pay for someone else to own a house while only renting yourself.

Ray Palmer

Monty Burnz wrote: »

Yeah - so taxpayers pay for someone else's mortgage and their own at the same time, or even better - pay for someone else to own a house while only renting yourself.

In fainess the tax a home buyer pays is really double taxation. Interst relief was a way of rebalancing some of that. It certainly didn't pay the mortgage just alivated a small amount.

The idea of paying property tax after paying large stamp duty has got to be one of the most unfair concepts concieved.

Monty Burnz

Ray Palmer wrote: »

In fainess the tax a home buyer pays is really double taxation. Interst relief was a way of rebalancing some of that. It certainly didn't pay the mortgage just alivated a small amount.

Indeed, but we're talking about mortgage interest supplement here - that's where the taxpayer actually pays your mortgage.

Ray Palmer wrote: »

The idea of paying property tax after paying large stamp duty has got to be one of the most unfair concepts concieved.

Well, I have to pay income tax on dividends from shares that I paid stamp duty on, having already paid income tax on the money I used to buy the shares.

Death and taxes, huh?

Tazz T

Zamboni wrote: »

Not just you.
The amount of radio show calls in from the public who are outraged at the prospect of renting 'their' house from a housing body was disturbing.
They seem to think they have an automatic entitlement to 'own' and keep an asset that they have not paid for and cannot make repayments for.
Frankly, the sheer ignorance of Irish people in how the world actually works is frightening.

Yeah, jesus, why should they have the same rights as the bankers and property developers - the same people who are going to make even more money out of this 'scheme'.

It's unbelievable. The people of this country will be giving there homes back to the people who ripped them off in the first place for nothing and will still have to pay them rent, which will be little or no different from their current mortgage payment. When they can't do that, they'll be out in the street anyway. Before talking of the 'automatic entitlement' of the Irish people, start at the root of the problem, Zamboni, with stupid government decisions, inept bankers and greedy developers. They should pay first.

Let me guess. You're still in a job and making all the payments on your mortgage. And your position won't change if you circumstances change? Give me a break.

Monty Burnz

Tazz T wrote: »

Yeah, jesus, why should they have the same rights as the bankers and property developers - the same people who are going to make even more money out of this 'scheme'.

Who are these 'bankers'? Can somebody for once identify exactly who they are referring to?

Tazz T wrote: »

It's unbelievable. The people of this country will be giving there homes back to the people who ripped them off in the first place for nothing and will still have to pay them rent, which will be little or no different from their current mortgage payment. When they can't do that, they'll be out in the street anyway. Before talking of the 'automatic entitlement' of the Irish people, start at the root of the problem, Zamboni, with stupid government decisions, inept bankers and greedy developers. They should pay first.

You forgot to list foolish borrowers as a root cause, and of course 'economic cycles'.

Exactly who are 'the bankers' who should pay, and how much should they pay? Do you have any specifics, or just rhetoric?

Tazz T wrote: »

Let me guess. You're still in a job and making all the payments on your mortgage. And your position won't change if you circumstances change? Give me a break.

I don't even have a house - I'm out on the street, just like a tiny handful of people who stopped paying their mortgages.

jmayo

Ray Palmer wrote: »

In fainess the tax a home buyer pays is really double taxation. Interst relief was a way of rebalancing some of that. It certainly didn't pay the mortgage just alivated a small amount.

The idea of paying property tax after paying large stamp duty has got to be one of the most unfair concepts concieved.

Every other country has a form of property tax.
Indeed we did until an idiotic vote buying ff administration decided we didn't need it.

Nobody forced anyone to buy expensive property or multiple properties which in turn meant paying big chunks of stamp duty.

A big reason for our property bubble was the fact that property investment/speculation was made too attractive due to lack of ongoing taxes.

Zamboni

Tazz T wrote: »

Yeah, jesus, why should they have the same rights as the bankers and property developers - the same people who are going to make even more money out of this 'scheme'.

It's unbelievable. The people of this country will be giving there homes back to the people who ripped them off in the first place for nothing and will still have to pay them rent, which will be little or no different from their current mortgage payment. When they can't do that, they'll be out in the street anyway. Before talking of the 'automatic entitlement' of the Irish people, start at the root of the problem, Zamboni, with stupid government decisions, inept bankers and greedy developers. They should pay first.

Let me guess. You're still in a job and making all the payments on your mortgage. And your position won't change if you circumstances change? Give me a break.

Haha. Here we go, bankers this, devolopers that, government - Bear in mind that this is a democratic country so the blame lies with the electorate.
None of that has any specific relevance to an individual signing up to a massive financial deal and failing to live up to their part of the agreement.

As for my mortgage? No, I didn't buy as I used prudence and financial judgment and evalauted it would be a bad decision.
But now I'll be asked to pay for the people who just signed on the 100% mortgage dotted line so that these clowns can stay in their fine houses with the Sky Sports subscription and their 07/08 cars while I rent and drive a ten year old vehicle.
Give me a break.

Monty Burnz

Zamboni wrote: »

Haha. Here we go, bankers this, devolopers that, government - Bear in mind that this is a democratic country so the blame lies with the electorate.

Once again we have another person spouting rhetoric about 'bankers' and it's clear he hasn't a breeze what he's on about. The combination of anger and ignorance is a little worrying.

I blame the bankers.

Zamboni

Monty Burnz wrote: »

Once again we have another persons spouting rhetoric about 'bankers' and it's clear he hasn't a breeze what he's on about. The combination of anger and ignorance is a little worrying.

I blame the bankers.

They took oooor jobs! :pac:

jmayo

Tazz T wrote: »

Yeah, jesus, why should they have the same rights as the bankers and property developers - the same people who are going to make even more money out of this 'scheme'.

When do you think the madness should end ?
I bought a car a few years and the engine blew, should I also get a bailout ?

Tazz T wrote: »

It's unbelievable. The people of this country will be giving there homes back to the people who ripped them off in the first place for nothing and will still have to pay them rent, which will be little or no different from their current mortgage payment.

So basically the rest of us should help pay for their home and asset ?
And who says there isn't a fooking sense of entitlement in this fooking country. :rolleyes:

Rip off ? Rip off ?
Most of these people weren't shouting rip off when they were bragging how much they paid or how many properties they had.
In fact they were throwing it into the rest of us losers' faces about how we should get on the property ladder.

Tazz T wrote: »

When they can't do that, they'll be out in the street anyway. Before talking of the 'automatic entitlement' of the Irish people, start at the root of the problem, Zamboni, with stupid government decisions, inept bankers and greedy developers. They should pay first.

Ah FFS what about greedy and stupid buyers ?
Ah yes it is always someone elses stupid decisions and someone else should always pay.

Tazz T wrote: »

Let me guess. You're still in a job and making all the payments on your mortgage. And your position won't change if you circumstances change? Give me a break.

Let me guess you would like me and my family to pay for your home ?
Give me a break.

Zamboni

I think the problem stems from a massive shift in the Irish mindset.

Previously, the default start point for a person economically was being homeless with the clothes on your back.
This would have been the start point for countless generation on this island.
But since the 70's welfare trend, the default position appears to be that people expect to have a family house and a basic income regardless of whether it is financed by the housing authorities or through a financial institution or whether they work and contribute to society or not.
And now because this is regarded as the default position (which it bloody isn't), the electorate vote for the clowns who will maintain this fantasy.

I wish we lived in a purely capitalist country which lived within its mean.
Where a man could expect to accumulate wealth based on the rewards of his labour, innovation and financial decisions.

But the truth is we live in a communist state financed by the European Union and the International Monetary Fund where every man gets a house, income and a job is merely an option.

It's no wonder we have mental problems with suicide and depression when we have stripped ourselves of self worth, purpose and responsibility.

jmayo

Zamboni wrote: »

But now I'll be asked to pay for the people who just signed on the 100% mortgage dotted line so that these clowns can stay in their fine houses with the Sky Sports subscription and their 07/08 cars while I rent and drive a ten year old vehicle.
Give me a break.

Actually this morning on Newstalk we had some lady, whose husband worked as Architect or some such and lost his job, saying they were only scraping by with apartment mortgage repayments of 1400 per month.
Fair enough.

Now what got me was she announced they bought in 2005 with 100% mortgage and they both had good jobs so they could afford it.

First off they were both in their 30s and my question was how come they had no saving to put towards the purchase rather than get a 100% mortgage.
And if they had not any savings and had to get 100% then to my mind they could not afford it.

Ray Palmer

Monty Burnz wrote: »

Indeed, but we're talking about mortgage interest supplement here - that's where the taxpayer actually pays your mortgage.

Well, I have to pay income tax on dividends from shares that I paid stamp duty on, having already paid income tax on the money I used to buy the shares.

Death and taxes, huh?

You can't see the difference? You don't pay a tax for just having shares which you don't need to survive. The tax payer still doesn't pay the mortgage by any strech of the definition. A tax break does not make a full payment.

It is incerdibly short sighted to not realise a stable home is good for every citizen.

Don't get me wrong there are idiots out there who only have themselves to blame. I lived within my means and still do. It would bother me to see some people get a helping hand but the greater good has to be considered.

It disgusts me more when foreign nationals can come here and fleece the welfare system without contributing to the tax base. Much more than keeping somebody in their house even when they over streched themselves. One has a social benifit and the other doesn't

fontanalis

Zamboni wrote: »

Haha. Here we go, bankers this, devolopers that, government - Bear in mind that this is a democratic country so the blame lies with the electorate.
None of that has any specific relevance to an individual signing up to a massive financial deal and failing to live up to their part of the agreement.

As for my mortgage? No, I didn't buy as I used prudence and financial judgment and evalauted it would be a bad decision.
But now I'll be asked to pay for the people who just signed on the 100% mortgage dotted line so that these clowns can stay in their fine houses with the Sky Sports subscription and their 07/08 cars while I rent and drive a ten year old vehicle.
Give me a break.

This needs to be repeated until it has really sunk in.

Monty Burnz

Ray Palmer wrote: »

You can't see the difference? You don't pay a tax for just having shares which you don't need to survive. The tax payer still doesn't pay the mortgage by any strech of the definition. A tax break does not make a full payment.

It is incerdibly short sighted to not realise a stable home is good for every citizen.

Don't I have the right to a stable home too? Why must my money be taken to provide a stable home to someone else, but not me?

Caoimhín

Monty Burnz wrote: »

Don't I have the right to a stable home too? Why must my money be taken to provide a stable home to someone else, but not me?

We need to read between the lines with this whole scheme. The phrase "Cui bono" springs to mind.

Maybe its just my cynical and paranoid personality (which has hardened over the past 5 years living in this Banana "Republic".

I just somehow feel that this scheme was not brought in primarily to benefit hard pressed home-owners. I am beginning to think that the primary reason for introducing this scheme is so that there is no repossession sales on the housing market. This artificial manipulation of the market is to set a floor on the drop in prices. So who benefits? For a start, the banks who will have less bad publicity from repossessions and the mortgage repayments are kept up.

Then we have the massive and influential estate agent/auctioneer lobby. The lower properties go in price, the lower their bottom line goes. They would dearly love to see the state to manipulate the price of housing so that it doesn't fall too low.

We also have the builders/developers who, quite simply dont want prices to fall further, devastating the value of their existing and future assets. Again, an artificial floor for prices in the market must be put in place to prevent any more losses. Sure with any luck, within 10 years, property prices will be back to "normal" and so it will be back to helicopters and private jets.

Finally we have the political and higher professional classes. They have an enormous amount of investment properties (think Frank "40 gaffes" Fahy. I know he is gone but the same selfish and self serving disease is rampant from County councillors to TD's.

What depresses me most in this whole disaster is the failure of those who should know better to recognise that lower housing costs would reduce the cost of living and therefore international competitiveness. But no, they would rather raise taxes and cut essential services.

The worst thing of all is that we seem to be doomed to repeat the whole mess all over again in the medium to long term future.

I was going to rant about the self entitlement some people have when it comes to having the rest of society mop up after their naive and greedy fiscal mistakes. I wont though or we would be ere all night :mad:

jmayo

Actually I was thinking the same thing.
A big part of this proposal is that people do not leave their homes and someone even mentioned the neighbours would not even know.

The banks do not want the property as trying to sell it would be more of a headache.
The vested interests do not want repossessions as it adds even more supply to an already swamped market.

Interesting when you read who was involved in the previous residential mortgage review body and what parties made submissions.

When you look at the working group members it is just a list of civil servants drawn from a multitude of departments, a few form the CB and a couple of reps from two state owned banks.
These would the same bunch who actually got us into this mess.

I would love to get through FYI how much this cost and what their expenses were like. :rolleyes:

Zamboni

jmayo wrote: »

Actually I was thinking the same thing.
A big part of this proposal is that people do not leave their homes and someone even mentioned the neighbours would not even know.

Michael Noonan said that on RTE News.
So they are effectively proposing creating social housing in private estates far above and beyond any normal criteria for allocating housing to councils.
So nothing is sacred. The guy that bust his ass to live in a private estate will be living beside council tenants. Further removing the effort/reward system and destroying self worth and purpose.

jmayo wrote: »

Interesting when you read who was involved in the previous residential mortgage review body and what parties made submissions.

When you look at the working group members it is just a list of civil servants drawn from a multitude of departments, a few form the CB and a couple of reps from two state owned banks.
These would the same bunch who actually got us into this mess.

I would love to get through FYI how much this cost and what their expenses were like. :rolleyes:

And their collective ingenious proposal is the creation of 100 new civil servants.
The mind boggles.

Scanlas The 2nd

Imagine this scenario.

You lend 400k to your friend to buy a house, down the line your friend can't pay you back so you go to take the house from him as compensation, then your friend says no you can't have it back, and everyone agrees that you are a pr1ck for having the temerity to want something back for the money you gave someone.

Ray Palmer

Monty Burnz wrote: »

Don't I have the right to a stable home too? Why must my money be taken to provide a stable home to someone else, but not me?

Nobody is taking the option away and you can still get your stable home if you want.
Your tax is not taken to give somebody to provide a stable home it is being used to shore up a lack of control by the governement. Part of it was due to poor planning and part was lack of the normal controls due to joining the Euro. It is not as simple as blame the government for everything we voted the Euro in which was more a casue of the problm than anything the governement acctually did.

Very easy to blame the government but it ignores the democratic decssion to join the Euro and the central european bank.

People obviously can't see the social dangers and are looking out for themselves complain how somebody else might get something they don't. It is the ultimate selfish attitude far worse than the people who were just trying to find a place to live in a runaway market. Yes there were idiots but not everybody who bought a house and who is now in trouble was an idiot. People here want to punish and get retribution on everybody who is trouble. That is no form of justice for you or them.

If you think destroying what is a valid housing market due to current situations means you can get a home yourself you are kidding yourself. It would benifit very few people who would have taken more gambles than a person who bought a house.