Do we want a property price recovery.

daithicarr

There is always talk about a property market recovery. But if the prices increase to anything near what they are again will we not just face the same problem.

Houses in Ireland were over priced when compared to other country's, this put us at a competitive disadvantage as it put pressure on wages to increase above our neighbors.

From a mid to long term point of view, and given the abundance of land to people we have, should property prices not be managed in such a way as to make them a competitive asset rather than massive disadvantage

3DataModem

It doesn't matter what the prices are, as long as retail lending practices are reasonable, sustainable and consistent.


Back to 3.5 + 1 in my opinion.

gaius c

daithicarr wrote: »

There is always talk about a property market recovery. But if the prices increase to anything near what they are again will we not just face the same problem.

Houses in Ireland were over priced when compared to other country's, this put us at a competitive disadvantage as it put pressure on wages to increase above our neighbors.

From a mid to long term point of view, and given the abundance of land to people we have, should property prices not be managed in such a way as to make them a competitive asset rather than massive disadvantage

We need to stop ALL manipulation of the market and let it find it's own level.

daithicarr

The market will always be manipulated in some way, by government, by big business etc. I presume your suggesting no regulation or very little?

It was a lack of regulation that got us in this mess, company s trying to outdo each other without looking at the long term.

If there was no regulation and housing was allowed to be built in water ever style or where ever a developer chose, we would just end up with more urban sprawl and estates with little amenity's.

But on the main point ,I would say the price does matter, if the cost of housing, electricity, transport etc is significantly higher in one area than another then it makes it less competitive. So why are we pushing for the speedy recovery of property prices when it will just impact negatively on an already poor competitiveness?

not to mind the social cost of people having to spend a disproportionate percentage of their income on a vital necessity

realitykeeper

daithicarr wrote: »

There is always talk about a property market recovery. But if the prices increase to anything near what they are again will we not just face the same problem.

Houses in Ireland were over priced when compared to other country's, this put us at a competitive disadvantage as it put pressure on wages to increase above our neighbors.

From a mid to long term point of view, and given the abundance of land to people we have, should property prices not be managed in such a way as to make them a competitive asset rather than massive disadvantage

This is an inspired suggestion OP. For it to work, the government would have to stop interfering in the property market, with one exception - they should bring in the emergency legislation needed to allow the banks to repossess and flog the properties that are being defaulted on.

daithicarr

Are you suggesting that people should be allowed build what they please, where they please ?

Also would there not be considerable contention with the idea that wealthy institutions can do what they want and not only get bailed out for massive mistakes , but then also take back the property's they were bailed out on.

While at the same time, normal citizens loose their homes, end up owing the banks money and have to pay extra tax to subsidies the same banks.

gaius c

daithicarr wrote: »

The market will always be manipulated in some way, by government, by big business etc. I presume your suggesting no regulation or very little?

It was a lack of regulation that got us in this mess, company s trying to outdo each other without looking at the long term.

If there was no regulation and housing was allowed to be built in water ever style or where ever a developer chose, we would just end up with more urban sprawl and estates with little amenity's.

But on the main point ,I would say the price does matter, if the cost of housing, electricity, transport etc is significantly higher in one area than another then it makes it less competitive. So why are we pushing for the speedy recovery of property prices when it will just impact negatively on an already poor competitiveness?

not to mind the social cost of people having to spend a disproportionate percentage of their income on a vital necessity

Fabulous oratory except that it has nothing to do with the context of my post.

thebman

It depends on whether you own property or not...

Pete_Cavan

daithicarr wrote: »

not to mind the social cost of people having to spend a disproportionate percentage of their income on a vital necessity

Obviously everyone needs a place to live but owning your place of habitation is neither vital or necessity. In many parts of the developed world, a lot of people live happy and prosperous lives without ever owning their own house/apartment. In this country that would be a more attractive option if there was an improvement in tenant rights and greater protection of these. Spending a disproportionate percentage of your income on anything is not a good idea, especially something which is susceptible to large fluctuations in value as property, and there is no "having to" do this.

gaius c

Pete_Cavan wrote: »

Obviously everyone needs a place to live but owning your place of habitation is neither vital or necessity. In many parts of the developed world, a lot of people live happy and prosperous lives without ever owning their own house/apartment. In this country that would be a more attractive option if there was an improvement in tenant rights and greater protection of these. Spending a disproportionate percentage of your income on anything is not a good idea, especially something which is susceptible to large fluctuations in value as property, and there is no "having to" do this.

Rents are increasing despite us being in year six of a downturn. This is a cost to working families and ultimately helps maintain our high cost base.

Dob74

gaius c wrote: »

We need to stop ALL manipulation of the market and let it find it's own level.

All markets can be manipulated.

At the moment the government are helping the Banks and NAMA keep prices high.
The banks have been given a free hand to do what ever they want. Between 02-07 they lent too much money without enough security. They clearly do not what they are doing. So the central Bank needs to step in and regulate.

The central bank must state clearly how much a square foot a home loan for can be.
And what times earning can be loaned to buyers.
Since FG or FF will be in government for the near future that will never happen.

jmayo

daithicarr wrote: »

There is always talk about a property market recovery. But if the prices increase to anything near what they are again will we not just face the same problem.

Don't worry your little head that prices will go back to the levels they were, relative to income be it salaries/wages or rents.
The golden goose is cooked and what was is left is wanted by those who lent it to us in the first place.

BTW you have noticed we have less banks now and our own indigenous ones are technically probably insolvent without taxpayer backing ?

As a direct answer to the question you posed.
There is no way we should have or want high property prices, as in prices anything near those of our bubbles years.
We have enough problems due to our location without making it damm expensive to put a roof over your head to live here.

daithicarr wrote: »

From a mid to long term point of view, and given the abundance of land to people we have, should property prices not be managed in such a way as to make them a competitive asset rather than massive disadvantage

No the only things that should be regulated is actual planning and development land.
Someone suggested it years ago that possible development land should be taken into state control and earmarked as such.
That way the underlying price of the development land is controlled and not allowed run riot making millions for those in the know, and with connections, at the expense of ordinary buyers.

Then the so called entrepreneurs, a fair few of whom spent quiet amount of time answering questions in tribunals, should not be allowed build up landbanks thanks to politcal bribes sorry patronage.

Also proper lending criteria and property taxes (not property tax incentives) takes care of the rest.

BTW do you have some assets who are not quiet as competitive as you once believed they would be ?

snubbleste

The government does not intervene in the market to facilitate people to buy silly!
Minister for Housing: It is not the intention of this scheme — or of any other Government intervention in the housing sector — to incentivise or entice people into the market. http://oireachtasdebates.oireachtas.ie/Debates%20Authoring/DebatesWebPack.nsf/takes/dail2012062800158

antoobrien

daithicarr wrote: »

There is always talk about a property market recovery. But if the prices increase to anything near what they are again will we not just face the same problem.

The recovery of a market doesn't mean a return to the peaks, it means a return to "normal" trading. The problem with a lot of the commentary is eye catching terms like "recovery" without explaining what that actually means.

For example when I hear recovery I hear the need for stability and some predictability in the market. When somebody sitting on a negative equity mortgage hears recovery they hear a return to whatever price I paid.

Do we want a recovery - yes, we want the prices to recover to the stage that prices are not way out of whack - that means too low as well as too high. That will give the predictability that everyone needs and we can get on with life as normal.

daithicarr

jmayo wrote: »

There is no way we should have or want high property prices, as in prices anything near those of our bubbles years.
We have enough problems due to our location without making it damn expensive to put a roof over your head to live here.

I know we dont want that, but it seems to me the government are behaving in a way that illustrates a desire to return to a property led boom.

What meaningful steps have they taken to ensure we dont see the same speculation on land and lack of spatial development and one off housing ?

jmayo wrote: »

BTW do you have some assets who are not quiet as competitive as you once believed they would be ?

Not sure what your getting at here or how its relevant, but as for "assets" I seem to have very few, be they financial assets or sell-able skills.

One of the joys of this downturn is periodic periods of unemployment which eat in to my savings/assets and a bunch of "skills" for which there is no market. Can only thank my luck that when I did go looking for a home in 2006\7 my average earnings ensured I hadn't a hope of buying a home.

jmayo

daithicarr wrote: »

I know we dont want that, but it seems to me the government are behaving in a way that illustrates a desire to return to a property led boom.

But always look behind who is making pronouncements or issuing advice.
In other words be fooking cynical and untrusting.
Remember the government is sitting on a huge tranche of property thanks to NAMA.
If property went back up then NAMA might have the loss making pile of crud that it actually has.
And if anyone claims they are making a profit and will make a profit ask them how much of their Irish based assets have been sold ?
Glass bottle site being a nice example of this.

daithicarr wrote: »

What meaningful steps have they taken to ensure we dont see the same speculation on land and lack of spatial development and one off housing ?

Forget one off housing as that is small fry and a red herring dragged up by either some would be communists/right wing ideolgies who all want us to live in constricted urban settlements because it is supposedly cheaper/less drain on resources or some greenies who think the rural environment is for their viewing pleasure.

The ones to get right is the development around actual urban areas and the pre allocation of future development land be it for residential or commerical grounds.
There should be no estates build without planning for road, transport, leisure, school, etc infrastruture.
We never learnt from the disaster that was Tallaght where loads of people where left for years with fook all in the area.
And there should be no amassing land banks to allow some get very rich at the expense of the end buyers, all thanks to some cosy backhanded arrangements with politicans.

daithicarr wrote: »

Not sure what your getting at here or how its relevant, but as for "assets" I seem to have very few, be they financial assets or sell-able skills.

One of the joys of this downturn is periodic periods of unemployment which eat in to my savings/assets and a bunch of "skills" for which there is no market. Can only thank my luck that when I did go looking for a home in 2006\7 my average earnings ensured I hadn't a hope of buying a home.

So if you had the wherewithal you would have bought in 2006/2007 ??
Dear God did you not realise we had one of the world biggest bubbles :eek:

daithicarr

jmayo wrote: »

daithicarr wrote: »

Forget one off housing as that is small fry and a red herring dragged up by either some would be communists/right wing ideolgies who all want us to live in constricted urban settlements because it is supposedly cheaper/less drain on resources or some greenies who think the rural environment is for their viewing pleasure.

How about well designed rural area's with things called Villages, where services can be centrally located , amenity's close by, less rural isolation etc.

or just continue dotting them around the rural landscape and hope that fiber broadband will be making its way up the Bohereen some day soon.

I realized when i went looking and found a dark, grubby, ****ely built apartment in cork would set me back three times what the banks were willing to offer me.

jmayo

daithicarr wrote: »

How about well designed rural area's with things called Villages, where services can be centrally located , amenity's close by, less rural isolation etc.

The problem is they are never well designed, because our planning is a nod and a wink.
Look how some small rural villages near our major cities were stuffed full of new estates yet the local schools were never prioritised.

BTW what services in local rural villages ?
Local postoffices, local small schools, local Garda stations have been shut.

daithicarr wrote: »

or just continue dotting them around the rural landscape and hope that fiber broadband will be making its way up the Bohereen some day soon.

Oh FFS leave it out.
I can point to areas right next to our major cities, in fact one urban area within 15 miles of the centre of our capital, where there is totally sh**e broadband coverage, so don't give us this cr** about how we would have great telecoms if only we didn't have people living in rural areas.
It is garbage because we can't even provide adequate telecoms in our urban areas.

daithicarr wrote: »

I realized when i went looking and found a dark, grubby, ****ely built apartment in cork would set me back three times what the banks were willing to offer me.

You didn't even have to go looking to spot the elephant in the corner.
All you had to do was pick up one of our daily or weekly newspapers or watch our naitonal broadcaster to see the complete and utter madness.
And your decision shouldn't have been based on what the banks were willing to offer you, but on what you were earning.

When the sh**ty apartment cost 10 times your annual income is when you should have seen the alarm bells, not because it weas 3 times what the bank was willing to offer you.

daithicarr

Im not saying that if you build villages we will all have super utilitys, just that it makes it easier to provide them to a bigger section of the population when there is proper spatial planning. Just because the planning is currently awful doesn't mean we should try and strive for better ? or should we just continue with as is?

My decision was more based on , I earn X, I can afford to pay Y a month, which will give me a mortgage of Z, for which i could afford a car parking space and maybe a caravan.

Ulysses Gaze

No we don't want to have a price recovery to the point where we get to the same situation we had before.

The simple solution to collapsing rents would be to withdraw rent relief for land lords.

We'd become more competitive sure, but a lot of land lords would go to the wall.

Im not saying that if you build villages we will all have super utilitys, just that it makes it easier to provide them to a bigger section of the population when there is proper spatial planning.

This is an interesting article and really highlights how dependant we had become on Property.

http://www.independent.ie/irish-news/councils-zoned-land-for-million-surplus-homes-26688795.html

Lbeard

jmayo wrote: »

We never learnt from the disaster that was Tallaght where loads of people where left for years with fook all in the area.

They had heroin. Some of the best in Dublin too.

macraignil

Working for minimum wage in this country, as is the only employment option for many, allows too small an income to buy property as the basic costs of living here take such a large portion of the wage. As long as the majority of our working population have no hope of owning a home I believe suicide and emigration of young people will remain high in Ireland. A property price recovery will only benefit those who own property. This portion of the population are good FF and FG voters so if the government still has any manipulating ability property prices will be pushed up so FF/FG get voted in again. Many of those who disagree will have left the country or followed Bertie Ahern's advice when they were on top of the right wing tag team sideshow that attempts to represent a democratic system.

Tea drinker

3DataModem wrote: »

It doesn't matter what the prices are, as long as retail lending practices are reasonable, sustainable and consistent.


Back to 3.5 + 1 in my opinion.

IMHO this is incomplete. If we had our own currency we could get away with this (disregarding price on P/e ratio) through manipulation, but we don't, and while we inflated prices of goods, services and houses through the boom, we now we they have to be adjusted down, with a huge decrease in spending power.
Look at how hard it is to bring government spending to sustainable level - started getting evidently crashy in 2007, was full swing 2008 and here we are in 13 and still haemorraging cash.

Best to have house prices that match international norms, our sustainable employment and pay levels, not some imaginary tigerland pay.
But you are bang on regarding sustainable lending practice - it's the pillar of any good bank.

theUbiq

No is the obvious answer. Although, if the idiots keep voting the landed gentry into power we could end up with prices back up at their previously unsustainable levels... We need new people running the banks and the government. The current bunch are obviously clueless and too bloody greedy to really change anything.

Farmer Pudsey

We require a properly functioning property market. This is a market where people have confidance that if they purchasse a house that it will not fall in value. The rate of price decline has slowed and at present propert prices are below the price of construction in a lot of the country. However consumers/investors are still a little unsure.

Godge

Farmer Pudsey wrote: »

We require a properly functioning property market. This is a market where people have confidance that if they purchasse a house that it will not fall in value. The rate of price decline has slowed and at present propert prices are below the price of construction in a lot of the country. However consumers/investors are still a little unsure.

A properly functioning market is one where prices may rise as well as fall.

By definition, a market where people have confidence that if they purchase a house that it will not fall in value is not a properly functioning market.

The post does not make sense.

Farmer Pudsey

Godge wrote: »

A properly functioning market is one where prices may rise as well as fall.

By definition, a market where people have confidence that if they purchase a house that it will not fall in value is not a properly functioning market.

The post does not make sense.

Neither is one where they fall in value all the time.

Godge

Farmer Pudsey wrote: »

Neither is one where they fall in value all the time.

http://www.rte.ie/news/business/2013/0628/459414-property-prices-down-1-1-in-the-year-to-may-cso/


Well, currently they are rising in Dublin and falling outside Dublin, rising in May but falling over the year, suggests that we have a functioning market.

Sure there are still distortions because of subsidies to landlords like rent supplement and rent relief but after another fall when they are removed, the market should start to function properly.