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How to curtail a housing boom .. in retrospect

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  • 23-03-2010 10:59am
    #1
    tmax
    Registered Users Posts: 37 ✭


    http://www.globalpropertyguide.com/Asia/South-Korea

    Hopefully our governments of the future can learn from their mistakes and from the better practises of other small (ish) export-led countries like Korea


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    #2
    spockety
    Moderators, Education Moderators Posts: 5,459 Mod ✭✭✭✭spockety


    Very good measures, though our problems here could have been prevented without even being that draconian.

    Rule 1: Max term of a mortgage is 25 years
    Rule 2: Max Loan-To-Value is 90%
    Rule 3: Second income carries little weight (x1)
    Rule 4: Repayments stress tested to ensure no more than 30% of income spent on mortgage repayments at an assumed interest rate of 7.5%
    Rule 5: A primary residence cannot be used as collatoral/security on an investment property.


    Also in an Irish context, tax breaks for investors/developers should have been severely curtailed or eliminated altogether.

    Those measures alone would have stopped the madness we witnessed.


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    #3
    pooch90
    Registered Users Posts: 2,379 ✭✭✭pooch90


    In my opinion an awful lot of it comes back to sh!thead planners handing out permission left right and centre for cheapo housing estates in inappropriate locations which are now lying idle


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    #4
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    pooch90 wrote: »
    In my opinion an awful lot of it comes back to sh!thead planners handing out permission left right and centre for cheapo housing estates in inappropriate locations which are now lying idle

    This and section 23 tax breaks have a lot to answer for in regards to the banking crisis, completed and purchased houses like the above that were bought as BTL's have something to do with it, but idle housing stock is nothing to do with the bubble.

    excess housing stock = less demand to buy. Less demand to buy = lower asking prices. Lower asking prices and housing buble = chalk and cheese


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    #5
    fontanalis
    Closed Accounts Posts: 3,619 ✭✭✭fontanalis


    Financial literacy would help.


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    #6
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    fontanalis wrote: »
    Financial literacy would help.

    Totally agree personal Finance should be studied in primary schools, and a business subject of some sort should be mandatory to at least junior cert level.


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    #7
    Victor
    Registered Users Posts: 78,355 ✭✭✭✭Victor


    Taxing property on an ongoing basis would have been useful as it creates a long term income for government and not a tax bubble.

    It also suppresses repayment ability and therefore keeps property prices at a more reasonable level.

    Stamp duty discourages mobility and trading up/down to a more appropriate property to one's needs.


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    #8
    TheInquisitor
    Closed Accounts Posts: 1,530 ✭✭✭TheInquisitor


    Max loan ratio of 90 %


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    #9
    earlyevening
    Registered Users Posts: 1,330 ✭✭✭earlyevening


    D3PO wrote: »
    Totally agree personal Finance should be studied in primary schools, and a business subject of some sort should be mandatory to at least junior cert level.

    Amn't sure this would help. I know several chartered accountants and other supposedly smart people who got stung.


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    #10
    fontanalis
    Closed Accounts Posts: 3,619 ✭✭✭fontanalis


    earlyevening wrote: »
    Amn't sure this would help. I know several chartered accountants and other supposedly smart people who got stung.
    I worked in a company around 2006 and an accountant who was managing the Sarbanes oxley project was telling me I was crazy not to buy an apartment.


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