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Housing Bubble Bursting
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Ray Palmer wrote: »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.Ray Palmer wrote: »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.Ray Palmer wrote: »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.0 -
Monty Burnz wrote: »All of that has nothing to do with debt forgiveness at all.Monty Burnz wrote: »I don't want people punished, I just don't want to be punished so that they get off scot-free. Is there any good reason why those who did the right/smart thing should be punished, and those who did the stupid/wrong thing should be let off?
So people getting away scott free bothers you but you don't want anybody punished! That is talking out of both sides of your mouth. The right/smart thing to do really depends on what time you were a valid person in the market. At what point was it right to wait? Don't kid yourself it was luck of circumstance.Monty Burnz wrote: »What is a 'valid housing market'? I don't want to destroy anything - I want to see a genuine market emerge where nobody is trying to artificially support prices.
A valid market involves people who are in tempory problems allowed to recover instead of punishing them and destroying the market due to fear and cascading effects of banking problems. You still won't be able to get a home if the system collapses. Artifically control is much the same as keeping the market on life support while it recovers rather than let it die.
Yes there is an argument to say let it die but you don't seem to have any consideration of the long term effect on the whole of the country for a long long period of time. There is a tipping point where it is probably worth letting it die.
It won't effect me one way or the other so I don't have a vested interest in a collapse. You on the other hand do have a vested interest and couldn't care less about who suffers once you get your pound of flesh and get your own place. Everybody is perfectly aware that many baying for blood really just want a cheaper houe while they pat themselves on the back for being so "smart". Don't confuse luck and circumstance with being smart.0 -
Won't debt forgiveness keep property prices higher than they should be (let's face it most people want it high to offload what they bought at a minumum loss), hardly valid!0
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Ray Palmer wrote: »It has everything to do with debt forgiveness. A situation was generated that put people at risk. You can't assume everybody will know what the right thing to do is. There is also the fact that the "right" thing is very subjective and is really guessing.
So people getting away scott free bothers you but you don't want anybody punished! That is talking out of both sides of your mouth. The right/smart thing to do really depends on what time you were a valid person in the market. At what point was it right to wait? Don't kid yourself it was luck of circumstance.
Well what you are suggestiong won't do that becasue you scare the herd and put a ton of people in finacial trouble who have little control over how it is done. You are using a simplistc mentality and ignoring concequences. It is not an easy solution nor a single casue problem.
A valid market involves people who are in tempory problems allowed to recover instead of punishing them and destroying the market due to fear and cascading effects of banking problems. You still won't be able to get a home if the system collapses. Artifically control is much the same as keeping the market on life support while it recovers rather than let it die.
Yes there is an argument to say let it die but you don't seem to have any consideration of the long term effect on the whole of the country for a long long period of time. There is a tipping point where it is probably worth letting it die.
It won't effect me one way or the other so I don't have a vested interest in a collapse. You on the other hand do have a vested interest and couldn't care less about who suffers once you get your pound of flesh and get your own place. Everybody is perfectly aware that many baying for blood really just want a cheaper houe while they pat themselves on the back for being so "smart". Don't confuse luck and circumstance with being smart.
I am sure Monty can and will fight his own battles but you are completely putting words in his mouth and purposely misconstruing what he says.0 -
Ray Palmer wrote: »It has everything to do with debt forgiveness. A situation was generated that put people at risk. You can't assume everybody will know what the right thing to do is. There is also the fact that the "right" thing is very subjective and is really guessing.Ray Palmer wrote: »So people getting away scott free bothers you but you don't want anybody punished! That is talking out of both sides of your mouth. The right/smart thing to do really depends on what time you were a valid person in the market. At what point was it right to wait? Don't kid yourself it was luck of circumstance.Ray Palmer wrote: »Well what you are suggestiong won't do that becasue you scare the herd and put a ton of people in finacial trouble who have little control over how it is done. You are using a simplistc mentality and ignoring concequences. It is not an easy solution nor a single casue problem.Ray Palmer wrote: »A valid market involves people who are in tempory problems allowed to recover instead of punishing them and destroying the market due to fear and cascading effects of banking problems. You still won't be able to get a home if the system collapses. Artifically control is much the same as keeping the market on life support while it recovers rather than let it die.Ray Palmer wrote: »Yes there is an argument to say let it die but you don't seem to have any consideration of the long term effect on the whole of the country for a long long period of time. There is a tipping point where it is probably worth letting it die.Ray Palmer wrote: »It won't effect me one way or the other so I don't have a vested interest in a collapse. You on the other hand do have a vested interest and couldn't care less about who suffers once you get your pound of flesh and get your own place. Everybody is perfectly aware that many baying for blood really just want a cheaper houe while they pat themselves on the back for being so "smart". Don't confuse luck and circumstance with being smart.0
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Debt foregiveness will probably collapse the market. People are trapped at the moment, forgive them their debt and they will sell. If the house is mortgage free then any price will do. i.e. a house bought for 400K with a 380K mortgage is a milestone and wont be sold at 200K. If you are told that whatever you sell the house at is enough to pay off the mortgage ( I assume people wont get to pocket the sale proceeds) then you will sell at 150K, 100K, whatever. The market will collapse.
Gainers:
1) renters,
2) householders in negative equity
3) future buyers.
Losers:
3) householders not yet in negative equity
The US has something like this - you can hand back your keys to the bank and the mortgage is forgiven, and that makes their busts more bustier.
The only people who should oppose this are people still in positive equity.0 -
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Monty Burnz wrote: »Interesting points, but of course it will cost us all extra in taxes to fund these debt write-offs, so you can add 'tax-payers' to the list of losers.
Yes. True. On the other hand we are paying to prop prices up at the moment.0 -
Monty Burnz wrote: »Interesting points, but of course it will cost us all extra in taxes to fund these debt write-offs, so you can add 'tax-payers' to the list of losers.
I'm actually not clear on this. The banks have factored in mortgage writeoffs, according to newstalk etc. Now, does this mean they factored in a small level (as they might have done in less calamitous times) and have been recapitalised accordingly, or does it mean that they factored in say 10% of mortgages being defaulted on?
How much default can the banks take (assuming we went down that road, which I don't approve of) before they return to the taxpayer saying 'give us more money please'.0 -
Ray Palmer wrote: »It has everything to do with debt forgiveness. A situation was generated that put people at risk. You can't assume everybody will know what the right thing to do is. There is also the fact that the "right" thing is very subjective and is really guessing.
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People put themselves at risk by taking out massive mortgages. They were all aware they had to pay back the loan plus interest. So what if everyone doesn't know what the right thing to do is, you still have to be responsible for your actions or the economy turns into a mess.0 -
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Snakeblood wrote: »I'm actually not clear on this. The banks have factored in mortgage writeoffs, according to newstalk etc. Now, does this mean they factored in a small level (as they might have done in less calamitous times) and have been recapitalised accordingly, or does it mean that they factored in say 10% of mortgages being defaulted on?Snakeblood wrote: »How much default can the banks take (assuming we went down that road, which I don't approve of) before they return to the taxpayer saying 'give us more money please'.
One other point - the money we put into the banks in recapitalisation money is not gone until it's gone. What I mean is that the money is still there as an asset belonging to us, much as if the state gave Aer Lingus 15 billion euros or something to develop their business. Until Aer Lingus waste all that money on snazzy uniforms, or the company goes bust, our money is still there. If they invest it in new planes, we'll even have assets to show for it. The money sitting on the banks balance sheets that the tax payer pumped in hasn't gone up in smoke - yet.0 -
Monty Burnz wrote: »You can't assume that everyone will know the right thing to do, I agree. But you can assume that some people will know the right thing to do. I did the right thing, and I wasn't guessing. I could have explained to you why I expected a crash back in 2004, but you probably would not have accepted my arguments.
That's assuming massive thing about me. I thought the market would crash at some point in back in 2001. Does that mean I wion for realising the market wasn't stable in the manner it was growing without any breaks?Monty Burnz wrote: »I'd rather a solution that placed the emphasis of resolving the problem on those who caused it, and the consequences of making bad decisions on those who made them. I didn't bid up the price of any property. I didn't borrow any money. I didn't default on any money owed.
Again this is that make beleive that many people have that they had no input on the situation nor benifted from it.
First off you increased the rental market.
Secondly your rent was cheap because of an increased supply.
Thirdly your rent is currently low because of the market situation.
Rent is cheaper than mortgages due to supply if the housing boom didn't happen you would be paying more for rent than a mortgage. I have lost equity and never defaulted either.Monty Burnz wrote: »How will the market die? Are you confusing lower prices with 'death'?
Lower prices will benefit the economy as less of our money is tied up buying and paying loans for unproductive assets. We can afford to work for less and the cost of doing business here will go down.
You seem to be forgetting about all the people who will be homeless and the fact we will still have to pay the loans back to Europe where the money came from. All those homeless people will have to be housed and it will be the governemnt who will have to house them.Monty Burnz wrote: »And the ad hominem bit to finish. Bravo. I won't bother addressing this crap if you don't mind.
You still seem to be ignoring the consequences of what you beleive your personal benifts will be.0 -
Ray Palmer wrote: »That's assuming massive thing about me. I thought the market would crash at some point in back in 2001. Does that mean I wion for realising the market wasn't stable in the manner it was growing without any breaks?Ray Palmer wrote: »Again this is that make beleive that many people have that they had no input on the situation nor benifted from it.
First off you increased the rental market.
Secondly your rent was cheap because of an increased supply.
Thirdly your rent is currently low because of the market situation.Ray Palmer wrote: »Rent is cheaper than mortgages due to supply if the housing boom didn't happen you would be paying more for rent than a mortgage. I have lost equity and never defaulted either.Ray Palmer wrote: »No you are confusing lower prices meaning you have the ability to buy a house. Banks aren't lending now do you think that will improve if things get worse?Ray Palmer wrote: »You seem to be forgetting about all the people who will be homeless and the fact we will still have to pay the loans back to Europe where the money came from. All those homeless people will have to be housed and it will be the governemnt who will have to house them.Ray Palmer wrote: »You still seem to be ignoring the consequences of what you beleive your personal benifts will be.0 -
Ray Palmer wrote: »A valid market involves people who are in tempory problems allowed to recover instead of punishing them and destroying the market due to fear and cascading effects of banking problems. You still won't be able to get a home if the system collapses. Artifically control is much the same as keeping the market on life support while it recovers rather than let it die.
So you probably think the likes of NAMA is good because it doesnot allow the market to actually reach it own levels ?
Do you seriously think it is good to be keeping
BTW how do you know he won't be able to get a home if the system collapses ?
He might have been fiscally conservative or maybe not and invested his money wisely, how do you know that he is not sitting on a few hundred grand ?Ray Palmer wrote: »Yes there is an argument to say let it die but you don't seem to have any consideration of the long term effect on the whole of the country for a long long period of time. There is a tipping point where it is probably worth letting it die.
ERhh that is bordering on the old mantra that the economy depends on house prices.
Good economy is not dependent on house prices.
It is actually the other way around in most sane countries.Ray Palmer wrote: »It won't effect me one way or the other so I don't have a vested interest in a collapse. You on the other hand do have a vested interest and couldn't care less about who suffers once you get your pound of flesh and get your own place.
...
I call schenanagins.
AFAIK I do recall from somethread around here that you are a landlord and that family members are landlords.
You always give the landlords point of view on threads around here.
Isn't it in your own interest that property prices remain high, otherwise the value of your asset(s) have decreased ?0 -
Monty Burnz wrote: »
Homeless, like I've been since I left my parents' house? Excuse me while I get out my tiny violin...if I think renting is good enough for me then I think it's good enough for anyone else. The notion that all the people who can't afford to pay their mortgage can't possibly afford to rent a place is patently ridiculous.0 -
Ray Palmer wrote: »You obviously missed the the main part of how things work in Ireland. If you kick people out of their houses here that can't afford their mortgages the still have to pay the mortgage back AND pay rent. So what is patently riddiculous about them not being able to do that?
Yep, so what we need is bankruptcy reform, not debt forgiveness. And no, they are not the same.
Nate0 -
Ray Palmer wrote: »You obviously missed the the main part of how things work in Ireland. If you kick people out of their houses here that can't afford their mortgages the still have to pay the mortgage back AND pay rent. So what is patently riddiculous about them not being able to do that?
Bankruptcy reform is coming in the new year. You go bust, leave the house you can't afford, and move into something you can. You start with a clean slate and no debts hanging over you.0 -
Monty Burnz wrote: »Bankruptcy reform is coming in the new year. You go bust, leave the house you can't afford, and move into something you can. You start with a clean slate and no debts hanging over you.
Hurrah!0 -
Monty Burnz wrote: »Bankruptcy reform is coming in the new year. You go bust, leave the house you can't afford, and move into something you can. You start with a clean slate and no debts hanging over you.0
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Ray Palmer wrote: »You don't know the difference between proposal and actual law yet either. :rolleyes:0
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Ray Palmer wrote: »You don't know the difference between proposal and actual law yet either. :rolleyes:
As far as I can tell Ray, everything is still at the proposal stage with regard to this issue.
Nate0 -
Monty Burnz wrote: »Ray Palmer wrote: »You obviously missed the the main part of how things work in Ireland. If you kick people out of their houses here that can't afford their mortgages the still have to pay the mortgage back AND pay rent. So what is patently riddiculous about them not being able to do that?
Bankruptcy reform is coming in the new year. You go bust, leave the house you can't afford, and move into something you can. You start with a clean slate and no debts hanging over you.
Coming out of bankruptcy does not mean you have a clean slate. You might be able to run your own affairs again without having to run everything by the bankruptcy trustee in a much shorter period than is currently the case, but it will stay on your credit history and you ain't going to be getting another mortgage or borrowing large amounts of money for a very long time, and many private landlords wont touch you. You will have a banjaxed credit score pretty much for ever. Ok, it gets rid of unmanageable obligations, but it isn't the painless way out that a lot of people think even if you come out of it in a 3 year timescale0 -
So you probably think the likes of NAMA is good because it doesnot allow the market to actually reach it own levels ?
Do you seriously think it is good to be keeping
BTW how do you know he won't be able to get a home if the system collapses ?
He might have been fiscally conservative or maybe not and invested his money wisely, how do you know that he is not sitting on a few hundred grand ?
ERhh that is bordering on the old mantra that the economy depends on house prices.
Good economy is not dependent on house prices.
It is actually the other way around in most sane countries.
I call schenanagins.
AFAIK I do recall from somethread around here that you are a landlord and that family members are landlords.
You always give the landlords point of view on threads around here.
Isn't it in your own interest that property prices remain high, otherwise the value of your asset(s) have decreased ?
I know it was obvious he has his own agenda.
He has no problem with good honest people paying for his own personally greedy life.
When did it change that one house was not enough for some people. Then when it goes tits up they want their money back and "daddy" to help them.
Such a sad weak nation of people we are.0 -
Scanlas The 2nd wrote: »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.0 -
Monty Burnz wrote: »It was not luck. I presume the bubble is obvious to you in retrospect? Well some of us could see it in real time.0
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Monty Burnz wrote: »Ray Palmer wrote: »You don't know the difference between proposal and actual law yet either.Coming out of bankruptcy does not mean you have a clean slate. You might be able to run your own affairs again without having to run everything by the bankruptcy trustee in a much shorter period than is currently the case, but it will stay on your credit history and you ain't going to be getting another mortgage or borrowing large amounts of money for a very long time, and many private landlords wont touch you. You will have a banjaxed credit score pretty much for ever. Ok, it gets rid of unmanageable obligations, but it isn't the painless way out that a lot of people think even if you come out of it in a 3 year timescale0
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Two things:
1. Blaming the banks is no longer an option. We ARE the banks. Thanks to the disastrous blanket bank guarantee the banks cant fail. If they lose the taxpayer borrows money to make up the shortfall. As yer man said "we're all monkeys now".
2. High house prices are a BAD THING.
High house prices wrecked our economy.
High house prices means higher mortgage repayments means more money to the banks and less money spent in the economy. (Unless you can borrow more and more for ever and ever).
High house prices means higher wages which makes us uncompetitive in the global jobs marketplace (we have been losing manufacturing jobs since 2000).
People associate high house prices with a thriving economy. This is wrongful thinking it only works short term when there is a glut of cheap easy credit available.
So to those who think of rising or falling prices in terms of who gains and who loses out the truth is we all lose out with high house prices.
The recent docu. by richard curran was perpetuating the myth that recovery is tied into a "recovery" of house prices. IMO house prices ARE recovering to normal sustainable levels.0 -
Two things:
1. Blaming the banks is no longer an option. We ARE the banks. Thanks to the disastrous blanket bank guarantee the banks cant fail. If they lose the taxpayer borrows money to make up the shortfall. As yer man said "we're all monkeys now".
2. High house prices are a BAD THING.
High house prices wrecked our economy.
High house prices means higher mortgage repayments means more money to the banks and less money spent in the economy. (Unless you can borrow more and more for ever and ever).
High house prices means higher wages which makes us uncompetitive in the global jobs marketplace (we have been losing manufacturing jobs since 2000).
People associate high house prices with a thriving economy. This is wrongful thinking it only works short term when there is a glut of cheap easy credit available.
So to those who think of rising or falling prices in terms of who gains and who loses out the truth is we all lose out with high house prices.
The recent docu. by richard curran was perpetuating the myth that recovery is tied into a "recovery" of house prices. IMO house prices ARE recovering to normal sustainable levels.
I would love to see a national newspaper to lead with an article similar to this instead of the rubbish they continue to peddle about the property market in Ireland0 -
Spiritofthekop wrote: »[/B]
I know it was obvious he has his own agenda.
He has no problem with good honest people paying for his own personally greedy life.
When did it change that one house was not enough for some people. Then when it goes tits up they want their money back and "daddy" to help them.
Such a sad weak nation of people we are.
Do you not believe in renting? Should people not have the option to rent?0 -
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Do you not believe in renting? Should people not have the option to rent?
If you don't mind me answering - I of course think that people should be able to rent. I've rented all my adult life. The issue is with BTL investors looking for bailouts or hoping that market manipulation will hold up the value of their assets at the expense of the taxpayer, the next generation of first time buyers, and the standard of living of everyone in the state.
I'm very glad that there are good landlords out there (along with plenty of bad ones) providing a service to those who don't want to buy (yet or ever). Of course, we do need to revolutionise the laws around renting here - a copy and paste from the German model should work fine - but that's another discussion.0
This discussion has been closed.
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