Effect of budget 2010 on the Property Market

steven.blanc

I for one am delighted with the reform of stamp duty in this years budget.
The new rates of stamp duty are:
1% on all transactions up to €1,00,000 and 2% above, all this can do is help create confidence in the current economic crisis.

What do others think?

jdivision

Why would anyone have confidence in the property market?

mrgaa1

Was the property tax mentioned? Personally he should have scrapped stamp duty for all property under 500k

Anyhow its up to the banks now - as Tom Cruise so eloquently put "Show me the money"

triple-M

so do ftb's have to pay stamp duty now?

steven.blanc

People need to live somewhere, why pay others mortgages for them, in most cases it is now cheaper to buy than rent.

Take a property at €400k stamp duty did equate to €19,250 for owner occupiers it now amounts to €4000 a saving of €15,250. Any saving for home owners can only be a good thing!

Mr. Loverman

steven.blanc wrote: »

People need to live somewhere, why pay others mortgages for them, in most cases it is now cheaper to buy than rent.

Interest is at a historic low. This is temporary. When buying you have to think long-term...!

Let me guess. Rent is dead money?

Does this apply to both residential and non residential?

mathie

triple-M wrote: »

so do ftb's have to pay stamp duty now?

FTBs are no different to second, third etc buyers now.

mrgaa1

triple-M wrote: »

so do ftb's have to pay stamp duty now?

I wouldn't think so - that would be a real disaster.

However if someone was buying a house a 300k (not a FTB) they would pay 3k stamp duty. Under the old regime it was 7% over 125k it would have meant a payment of €12,250 - so quite a significant saving.

danbohan

Mr. Loverman wrote: »

Interest is at a historic low. This is temporary. When buying you have to think long-term...!

Let me guess. Rent is dead money?

dont be like that you will kill the next bubble , ok altogether now , ''rent is dead money'' ''rent is dead money ''

steven.blanc

I am a relation and work on both sides of the property industry (Sales AND Property Management). In my opinion it is now a very good time to buy, house prices are low and getting lower, interest rates are low and stamp duty is now very reasonable. I for one am now a lot keener in buying than I was this morning!
I do not for one feel that people should go out and buy half a dozen apartments at the next new Development launch, but what I do feel is that it is now getting more attractive to buy ones family home.

I could be wrong but I think the budget reforms re stamp duty is a blanket reform. E.G. All buyers and on all purchases(Commercial/Residential)

mikom

steven.blanc wrote: »

I am a relation

Cousin, uncle, shillfather?

colc1

steven.blanc wrote: »

I for one am delighted with the reform of stamp duty in this years budget.
The new rates of stamp duty are:
1% on all transactions up to €1,00,000 and 2% above, all this can do is help create confidence in the current economic crisis.

What do others think?

As long as the prices come down to a realistic level asap thats the main thing so they need to bring in a proper property tax and not some token one like the e100 a year joke one...only delaying the inevitable....When prices get real they'll start selling houses the problem in the property market in the past was over-confidence.

colc1

steven.blanc wrote: »

People need to live somewhere, why pay others mortgages for them, in most cases it is now cheaper to buy than rent.

Take a property at €400k stamp duty did equate to €19,250 for owner occupiers it now amounts to €4000 a saving of €15,250. Any saving for home owners can only be a good thing!

Are you an estate agent by any chance?

RentDayBlues

I am a relation and work on both sides of the property industry (Sales AND Property Management). In my opinion it is now a very good time to buy, house prices are low and getting lower, interest rates are low and stamp duty is now very reasonable. I for one am now a lot keener in buying than I was this morning!
I do not for one feel that people should go out and buy half a dozen apartments at the next new Development launch, but what I do feel is that now is getting more attractive to buy ones family home.

I could be wrong but I think the budget reforms re stamp duty is a blanket reform. E.G. All buyers and on all purchases(Commercial/Residential)

So someone in the property industry now thinks its a good time to buy, well let me get my cheque book. . . . .

mrgaa1

Transfers of residential property
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Reduction in rate for transfers of residential property to 1% on properties valued up to €1 million, with 2% applying to amounts over €1 million, in respect of instruments executed on or after 8 December 2010;
Abolition of various reliefs and exemptions, in respect of instruments executed on or after 8 December 2010, as follows:

1. First time buyer relief
2. Exemption for new houses under 125 sq m in size
3. Relief on new houses over 125 sq m in size
4. Consanguinity relief for residential property transfers
5. Exemption for residential property transfers valued under €127,000
6. Site to child relief

[/FONT][/FONT]
http://www.budget.gov.ie/budgets/2011/Documents/Summary%20of%20Measures%20Combined.pdf

So there it is - everyone pays. so if you are a FTB get down to your solicitor tonight and sign something.

Mr. Loverman

steven.blanc wrote: »

In my opinion it is now a very good time to buy, house prices are low and getting lower

The bit is bold is the reason no one should buy now.

House prices in Ireland are still a rip-off.

We have a long way to go before we hit the bottom.

colc1

steven.blanc wrote: »

I am a relation and work on both sides of the property industry (Sales AND Property Management). In my opinion it is now a very good time to buy, house prices are low and getting lower, interest rates are low and stamp duty is now very reasonable. I for one am now a lot keener in buying than I was this morning!
I do not for one feel that people should go out and buy half a dozen apartments at the next new Development launch, but what I do feel is that it is now getting more attractive to buy ones family home.

I could be wrong but I think the budget reforms re stamp duty is a blanket reform. E.G. All buyers and on all purchases(Commercial/Residential)

Haha I was kidding above about you being an estate agent...at least you're honest I'll give you that. Interest rates being low is obviously a reason not to buy sure they're only going up everyone knows that. Also take a trip even across the water or to France and anyone would realise prices are not low I reckon they'll fall at least another 50%...and thats in Dublin down the country in places lacking infrastructure who knows how much...

Blazer

If you think house prices are low now wait for another year and watch them drop bigtime once mortage defaults start kicking in..
that's if there's anyone left in the country to buy a house.

steven.blanc

Lol, everyone is open to criticism. I am looking for peoples views of todays budget I am not hear to preach on the property market, I am too young to do such a thing!

I am the son and am a property manager. All in all a reduction can only help consumer confidence

mathie

Mr. Loverman wrote: »

The bit is bold is the reason no one should buy now.

House prices in Ireland are still a rip-off.

We have a long way to go before we hit the bottom.

Sc@recrow wrote: »

If you think house prices are low now wait for another year and watch them drop bigtime once mortage defaults start kicking in..
that's if there's anyone left in the country to buy a house.

Can either of you tell me this weekends Lotto numbers too?

BrianBlessed

Donnie Cassidy wrote: »

I am a relation and work on both sides of the property industry (Sales AND Property Management). In my opinion it is now a very good time to buy, house prices are low and getting lower, interest rates are low and stamp duty is now very reasonable. I for one am now a lot keener in buying than I was this morning!
I do not for one feel that people should go out and buy half a dozen apartments at the next new Development launch, but what I do feel is that it is now getting more attractive to buy ones family home.

I could be wrong but I think the budget reforms re stamp duty is a blanket reform. E.G. All buyers and on all purchases(Commercial/Residential)

Hmmmmm

mathie

mrgaa1 wrote: »

Transfers of residential property
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Reduction in rate for transfers of residential property to 1% on properties valued up to €1 million, with 2% applying to amounts over €1 million, in respect of instruments executed on or after 8 December 2010; Abolition of various reliefs and exemptions, in respect of instruments executed on or after 8 December 2010, as follows:

1. First time buyer relief
2. Exemption for new houses under 125 sq m in size
3. Relief on new houses over 125 sq m in size
4. Consanguinity relief for residential property transfers
5. Exemption for residential property transfers valued under €127,000
6. Site to child relief

[/FONT][/FONT]
http://www.budget.gov.ie/budgets/2011/Documents/Summary%20of%20Measures%20Combined.pdf

So there it is - everyone pays. so if you are a FTB get down to your solicitor tonight and sign something.

"in respect of instruments executed on or after 8 December 2010; "
What exactly does this mean?
When is a sale 'executed'?

steven.blanc

colc1 wrote: »

Haha I was kidding above about you being an estate agent...at least you're honest I'll give you that...

Dont worry at all, I am proud of what I do. Believe it or not the recession has weaned out the majority of rogue agents in the property industry,perhaps the best thing to come out of the recession. Now if certain bankers and solicitors would follow........................

Those new to the industry are all degree qualified and I for one strive to achieve RICS status. I love nothing more than to prove peoples opinions of property professionals wrong by always offering an honest, professional and courtious service. The property industry is my career, my life and I love what I do whether it be management, marketing or sales!

My point is that the Government has made a significant gesture towards the Property Market and should be commended for trying to fix the problems they have helped create no matter how late.!!

JoeyJJ

The FTB exemption removal has not stimulated me to buy and prob delay me, probably save more with reduction in prices however with more upfront cost it will mean a probably longer time before I buy. I know falling Market etc wasn't expecting to buy just yet but it def reduces the chances of me buying next year unless there is a faster continous downward spiral.


It will be an extra 2-3k for me to save.

gurramok

It won't stimulate the property market. You need FTB's to hold the whole market up in good times nevermind bad times. They just got levied an extra tax of 2 grand on a 200k house.

jobless

is this change in stamp duty for first time buyers only?..

johndaman66

gurramok wrote: »

It won't stimulate the property market. You need FTB's to hold the whole market up in good times nevermind bad times. They just got levied an extra tax of 2 grand on a 200k house.

Agreed, until first time buyers start entering the market in any significant numbers again I should think activity will remain pretty stagnant. Bringing FTB's into the the stamp duty net certainly won't create a mass frenzy of FTB's.

steven.blanc wrote: »

In my opinion it is now a very good time to buy, house prices are low and getting lower, interest rates are low and stamp duty is now very reasonable.

I am at odds with these comments, in particular pointing out that intersts rates being low means its a good time to buy? I would suggest that the opposite is the case. Low interest rates are more likely to be keeping prices propped up at the moment. The wont stay low forever either.

I think you are failing to look at the wider picture and implications of the budget or at least you fail to acknowledge said implications in your posts. A considerable amount of money is being taken out of the economy (too much I reckon which will have the affect of contracting the economy further) and this is going to have an obvious impact on house prices too. Also a lot of people realise that this is only the first of a number of austerity budgets... Don't want to be going too far off the topic of conversation but things will get a hell of a lot worse before they get better I'm afraid

Mr. Loverman

mathie wrote: »

Can either of you tell me this weekends Lotto numbers too?

You really think the economy is going to "turn a corner" shortly and house prices will start rising again...?

Can't believe there are people who still don't get it. It is beyond obvious at this stage.

Zamboni

JoeyJJ wrote: »

The FTB exemption removal has not stimulated me to buy and prob delay me, probably save more with reduction in prices however with more upfront cost it will mean a probably longer time before I buy. I know falling Market etc wasn't expecting to buy just yet but it def reduces the chances of me buying next year unless there is a faster continous downward spiral.

It will be an extra 2-3k for me to save.

+1
At least it may deter us further from catching a falling knife.

Either way it should immediately reduce demand on the market as any FTBers that were planning on buying soon will be delayed in purchasing as they now have further thousands to raise.

mathie

Mr. Loverman wrote: »

You really think the economy is going to "turn a corner" shortly and house prices will start rising again...?

Can't believe there are people who still don't get it. It is beyond obvious at this stage.

Did I say the economy is going to "turn a corner" and house prices would start rising again?
No I didn't so let me clarify it for you.

I was making the point that no-one can predict the future.

Do you remember late 2005 / early 2006?
A majority of people were in a buying frenzy.
A majority of people were advising people to buy.
A majority of people thought property prices would always go up.

Now we have a majority of people saying the exact opposite.

I'm not saying we're anywhere near the bottom.
I'm just saying the herd behaviour and an inability to predict the future are factors.

Take a look at this ...
http://www.bigfatpurse.com/wp-content/uploads/cycle-of-market-emotions.jpg

If 2005 / 2006 was 'Euphoria' then where are we now?

blah

mathie wrote: »

Take a look at this ...
http://www.bigfatpurse.com/wp-content/uploads/cycle-of-market-emotions.jpg

If 2005 / 2006 was 'Euphoria' then where are we now?

Where do you think we are now? I'm curious.

bmarley

steven.blanc wrote: »

I for one am delighted with the reform of stamp duty in this years budget.
The new rates of stamp duty are:
1% on all transactions up to €1,00,000 and 2% above, all this can do is help create confidence in the current economic crisis.

What do others think?

Yes, good news for some. Came to late for me though, I paid 10,000 in stamp duty in 2006 and the value of my house has been slashed almost in half. Any chance we might get a bit of a refund to pay off some of my mortgage? No, but you will pay property tax. It's a joke.:D

spockety

*YAWN*

Until the average house price gets back to about 4 times the average wage there is nothing to talk about.

Anybody who claims that it is currently a great time to buy is ignoring history for some reason, or is not looking back beyond 2006. It is not a great time to buy. In historical terms, it is a bloody awful time to buy. Come back and shill when house prices are reasonable, which they will be again no matter what measures anybody tries.

robd

steven.blanc wrote: »

I for one am delighted with the reform of stamp duty in this years budget.
The new rates of stamp duty are:
1% on all transactions up to €1,00,000 and 2% above, all this can do is help create confidence in the current economic crisis.

What do others think?

• Steven. You seem to have missed the last IBF report http://www.ibf.ie/gns/media-centre/news/10-11-30/Home_Purchasers_Dominate_Mortgage_Market.aspx
• It stated that FTBs are the largest segment of the market at 45.7% value and 41.3% volume. Previously they were exempt from stamp duty (up to 1 mil), now they have to pay 1% (up to 1 mil).
• Previously new houses were exempt from stamp duty now they're levied at 1% (up to 1 mil).
• Trader uppers require FTBs to purchase property off them to trade up.
• Many people who bought from about 2004 onwards are in negative equity.
• Banks must increase capital reserve to 12.5% which leaves them with little of no funds to give out.

Don't get me wrong, I totally agree with this change. Horse bolted aside.

Can't see how it will help the property market whatsoever though.

Rabidlamb

spockety wrote: »

[
Until the average house price gets back to about 4 times the average wage there is nothing to talk about.

I agree fully, question is what the average industrial wage will be in the future.
I saw some paper quoting it at €36k today but I'm not convinced.
I believe that it's coming closer to €30k in provincial towns.
In a few years you should be able to buy a modest 3 bed semi for €120k max in Carlow/Portlaoise/Mullingar etc.

fliball123

Can I just add something here to all Estate agents and Nay sayers that if someone out there is looking to buy and there are a lot of FTBs waiting to buy, My advice is to wait for at least another 6 months let this new property DB come online and we will get a feeling of exactly were property prices are. Having said that the possibility is that Interest rates and ECB rates which drive the banking rates will probably be higher ... Ideally what you should do is go to your bank get an aggreement on how much you can get and try and get the offer for 6 months (not sure if this is still possible) keep an eye on the ERSI stats and then look at this new DB which will have to be online sometime next year...

For those who say dont buy...People want their own place and for the Estate agents people are no longer going to be bullied by what you say...

Anyways good luck to all in there endeavours you will need it after that budget

spockety

I don't say "don't buy". People are free to do whatever they want with their money. I do however have a problem with people making claims about how good a decision it is from a financial perspective.

fliball123

spockety wrote: »

I don't say "don't buy". People are free to do whatever they want with their money. I do however have a problem with people making claims about how good a decision it is from a financial perspective.

Well you have to weigh up everything such as

How much are you paying on rent
How much will the interest move up
How much will property continue to fall
How much will the banks loan
How much more cash will be taken between now and 2014 in the next 3 budgets


These would be the 5 major factors for buying a house for anyone and it will be different for different people. Only they will know if its financally sound to do so . Also a lot of people are not doing it for the sake of financial gain ...they just want a place to live in.

The other thing that I have seen is rent has actually started to go back up.. has anyone else seen this in the last 6 months or so?

seamus

robd wrote: »

Can't see how it will help the property market whatsoever though.

I think you might be overestimating the impact of the 1% on FTBs.

On a €200k property (probably the middle-upper cost of a FTB property at this stage), your stamp duty is just €2k. Yes I said, "just", because as all of us who've bought property in the last ten years knows, this is less than what you'll have to pay your solicitor, and you would have far more than €2k set aside for sundry purchases in the process. It's not a small amount no, but buying a house is known as a large financial commitment so I don't think that 1% introduces an enormous barrier for FTBs.

If I'd had to pay 1% extra as an FTB, it wouldn't have been a barrier. Not in the slightest.

I think the core of your post is spot on though; a previously huge barrier for trader-uppers has now been removed, but negative equity is a far bigger barrier which will prevent people from moving onto a new home.

Do we have any idea how many homes were purchased by FTBs between 2004 and 2008? These are the people who can't move and if they make up a significent proportion of homeowners in the 25-40 age brackets, then their inability to move will keep the property market stagnant for years.

dory

Rabidlamb wrote: »

In a few years you should be able to buy a modest 3 bed semi for €120k max in Carlow/Portlaoise/Mullingar etc.

No need to wait my friend, Some nice little bit of real estate available for that price in Carlow.

robd

seamus wrote: »

I think you might be overestimating the impact of the 1% on FTBs.

It's more that I think it all adds up. It's certainly not a stimulus.

Bear in mind that a few years ago they could get 100% mortgage, pay for the furniture on a credit card, and get a loan for the solicitors fees and other sundries from the Credit Union, in the name of a holiday. All ridiculous, but many cases of it posted on this site.

Fast forward to today. Same solicitors fees, less salary due to tax increases and even pay decreases. Be doing well to borrow 92% and loan offer will be reduced due to higher criteria and lower salary, that's if they get an offer, let alone can they actually draw the mortgage down. And now 1% stamp duty. OK, on the positive side big price reductions.

A lot done more to do (on house prices), to quote a certain soon to be ex leaders party.

Mr. Loverman

mathie wrote: »

Did I say the economy is going to "turn a corner" and house prices would start rising again?
No I didn't so let me clarify it for you.

I was making the point that no-one can predict the future.

Do you remember late 2005 / early 2006?
A majority of people were in a buying frenzy.
A majority of people were advising people to buy.
A majority of people thought property prices would always go up.

Now we have a majority of people saying the exact opposite.

I'm not saying we're anywhere near the bottom.
I'm just saying the herd behaviour and an inability to predict the future are factors.

Take a look at this ...
http://www.bigfatpurse.com/wp-content/uploads/cycle-of-market-emotions.jpg

If 2005 / 2006 was 'Euphoria' then where are we now?

I am not the majority of people. I have been saying since the mid-2000s that we are in a property bubble. I am a regular on thepropertypin. I have numerous bannings from askaboutmoney because I pointed out the obvious: we are in a property bubble.

It is insanely obvious Ireland has at least a decade of pain ahead of itself.

mathie

blah wrote: »

Where do you think we are now? I'm curious.

I'd say we're between fear and desperation with the possibility of a dead cat bounce now with the 1% stamp duty.

What about yourself?

who_ru

if only there were strict guidelines brought in 10 years ago in relation to build quality, size, sound proofing of apts and of course regulating management companies then maybe we wouldn't be so keen on purchasing 3 beds all the time. if only eh....now there is a lost opportunity. probably half of all europeans, many with kids, manage to live in good apts all over europe but oh no not here, they threw anything up, hopeless sounding proofing, shoebox size, awful electrical heating, amateur landlords everywhere.

rokossovsky

Still sick over handing them 56K only 2 years ago. Ah shure it was for the better of the counthry.:mad:

tazzzZ

I am a FTB and looking to get on the market myself. the budget has defo made me hold off.

tbh though its getting to the stage where buying a house is money spent and not money invested as it used to be thought of. its getting to be like buying a car and as soon as u drive out of the showroom knock 5k off the value. unfortunately that 5k equates to a hell of alot when it comes to a property!

iguana

mathie wrote: »

Now we have a majority of people saying the exact opposite.

I'm not saying we're anywhere near the bottom.
I'm just saying the herd behaviour and an inability to predict the future are factors.

I can't tell you tonight's Lotto numbers but I can tell you what will happen if you leave a pot of water on a hot hob overnight. You don't need to be psychic to understand cause and effect.

We have been "bailed out" by the IMF at a punitive interest rate. The economy won't be recovering for quite a long time and until it does house prices aren't going anywhere but down.

(Unless of course we end up with a new currency and then it's possible that houses will probably end up costing 100's of millions of New Irish Punts but that will be because of the same rampant inflation that causes a pint of milk to cost over a grand.)

mckildare

steven.blanc wrote: »

I love nothing more than to prove peoples opinions of property professionals wrong by always offering an honest, professional and courtious service.

My point is that the Government has made a significant gesture towards the Property Market and should be commended for trying to fix the problems they have helped create no matter how late.!!

You're one of a kind OP! As an honest estate agent maybe you can go tell people what their houses are actually worth so the property crash can kick off again, current prices are nowhere near what I can afford in a lifetime so I have no intention of buying yet, even though I have the Irish bug to own a house

BobbyD10

I wouldn't think the Budget will make much difference to the property market.

I have been waiting patiently for the last few years and as a prospective customer to this industry I too will be waiting further down the line.

The budget has meant people have less money in their pockets.

I'm not sure the interest rates are as low as people seem to think, your looking at rates over 3% now. They will go up again in the new year as the banks are waiting for the Christmas period to finish.

Now that I am talking about banks, for property to shift there needs to be money and banks are just not lending. Even professionals are being refused mortgages.

I thought there is a lot of reliefs abolished from the budget which may not improve things either.

Anyway, its all about people's personal circumstances and whether they can afford to purchase property. I do think that there is some demand out there that currently has been shoveled into savings in the banks.

Its all about confidence really and that is in short supply at this point.

CuppaCocoa

Very pleased! My partner has just bought (not signed contract for!) the house next door to me and the budget has saved her over 5k! That's a fitted kitchen!