Are we heading for another property bubble?

bingowings2015

I came into a little money recently and find myself with the deposit for a house. I'm confident of getting a mortgage but not sure if to go for it, or not?

Should I wait or bite the bullet?

SCOOP 64

Were you buying, Dublin ?

bingowings2015

Yes, Dublin. Although I am open to anything within commuting distance

goz83

I would speculate and say yes. The question is when? I think we will have another pop inside 5 years. Prices are reasonable enough at the moment. Nothing like a place to call home, rather than a place to argue with your landlord about.

johnp001

bingowings2015 wrote: »

I came into a little money recently and find myself with the deposit for a house. I'm confident of getting a mortgage but not sure if to go for it, or not?

Should I wait or bite the bullet?

Are we heading for another property bubble?
Just ask an estate agent! http://www.independent.ie/business/irish/banking-inquiry/were-facing-new-property-bubble-bank-inquiry-told-31115352.html
Under oath even they say yes :eek:

Irish house price inflation (national mind, dublin is far more extreme) has been running at 15% which is 6 times EU average against a backdrop of CPI deflation.
http://www.irishtimes.com/business/economy/irish-house-price-inflation-six-times-higher-than-eu-average-1.2073984

Supply inflow in Dublin up 60% year on year
Stock on market (Dublin as measured by Daft listings) up 54% year on year
Sharp inflow and supply rises are leading indicators of downward price movements.

Dog of Tears

The current prices are being driven primarily by lack of supply which is unlikely to alleviate in the medium term.

househero

johnp001 wrote: »

Irish house price inflation (national mind, dublin is far more extreme) has been running at 15% which is 6 times EU average against a backdrop of CPI deflation.

Ireland is not an average EU country. Our economy is a net exporter we have a very young population and an unnaturally high tax take. Comparing Ireland to 'EU averages' makes no sense economically.

The UK, France, Germany and Italy face completely different problems to us over the next 20 to 30 years as Asia and south America become the dominant economic areas.

House prices rose so fast because they fell too far in Ireland... Too many idiots reading English owned Irish newspapers spooked the market. Dublin has been a wealthy and stable property market for over 200 years. Its not built on sand.

The market will be stable for the next 5 years seeing moderate gains before another fall (nowhere near as extreme as what we have seen)

johnp001

Dog of Tears wrote: »

The current prices are being driven primarily by lack of supply which is unlikely to alleviate in the medium term.

Please could you share the sources for your property market supply prediction as it is so far at odds with my own figures (which are taken from Daft listings)?

househero wrote: »

Ireland is not an average EU country. Our economy is a net exporter we have a very young population and an unnaturally high tax take. Comparing Ireland to 'EU averages' makes no sense economically.

The only reference I could find for Ireland's relative tax take put it as very low within the EU (bottom in EU15, fifth from bottom in EU27), do you have an alternative reference?
http://www.eapn.ie/eapn/policy/resources-on-taxation/tax-in-ireland-and-europe

househero wrote: »

...

House prices rose so fast because they fell too far in Ireland... Too many idiots reading English owned Irish newspapers spooked the market. Dublin has been a wealthy and stable property market for over 200 years. Its not built on sand.

Whatever wealth and stability the Dublin property market built up over the last 200 years was wiped out in the crash after the last bubble.
The bubble inflated prices were entirely dependent on money that our banks borrowed from Europe and were unable to pay back. Since the bailout this wealth is no longer in Ireland.

househero wrote: »

The market will be stable for the next 5 years seeing moderate gains before another fall (nowhere near as extreme as what we have seen)

I don't agree with this conclusion but am interested to hear what you think the catalyst for falls in 5 years time will be?

hfallada

A bubble is generally built on unsustainable levels of borrowing eg 100% mortgages. We now have mortgage restrictions to stop another bubble. Dublin will be a solid investment. Its the heart of our industry and services industries. There will always be jobs in Dublin and life moves on when a massive employer closes, where as a small town is almost destroyed when a factory closes.

Ireland has the youngest population in Europe. We now have a very solid economy compared to most of Europe. We have 10% unemployment and yet we dont have a working banking system and we dont have enough construction at the moment. Once these issues are slowly resolved, the economy will grow faster.

I cant see how people would think prices will fall significantly in Dublin the next 10 years. But a SF Government might scare some FDI and their taxation polices if implemented, will cause people to emigrate.

quadrifoglio verde

househero wrote: »

Ireland is not an average EU country. Our economy is a net exporter we have a very young population and an unnaturally high tax take. Comparing Ireland to 'EU averages' makes no sense economically.

The UK, France, Germany and Italy face completely different problems to us over the next 20 to 30 years as Asia and south America become the dominant economic areas.

House prices rose so fast because they fell too far in Ireland... Too many idiots reading English owned Irish newspapers spooked the market. Dublin has been a wealthy and stable property market for over 200 years. Its not built on sand.

The market will be stable for the next 5 years seeing moderate gains before another fall (nowhere near as extreme as what we have seen)

Dublin has been a wealthy and stable property market for over 200 years?
I beg to differ.
Well Irish Times has done the research for me
http://www.irishtimes.com/life-and-style/homes-and-property/300-years-of-property-booms-and-busts-1.2111375

There is no such thing as a long term stable market. Bitcoins, oil, gold, hogs, wheat, Apple shares, they all go through booms and busts , nothing that can be speculated on is stable.

To the op,you want to buy a home, you think you'll get the mortgage, if it's somewhere you're happy to live in for the forseable future then there's no risk I'm buying. People who bought at the peak of the boom with a long term view of living there aren't affected by negative equity, it's those who bought with the plan to trade up after a few years that got bit in the ass and end up married with kids and renting a house and paying a mortgage on a 1 bed apartment.

ted1

bingowings2015 wrote: »

I came into a little money recently and find myself with the deposit for a house. I'm confident of getting a mortgage but not sure if to go for it, or not?

Should I wait or bite the bullet?

If you see a place you picture yourself in for years then buy it. If you see a place to get you in the property ladder then don't

househero

johnp001 wrote: »

I don't agree with this conclusion but am interested to hear what you think the catalyst for falls in 5 years time will be?

Too many questions John. If you want an answer ask me just one at a time please mate.

Housing is not a supply and demand market. In fact the whole supply and demand theory is misused and over simplified.

We are talking about two different types of tax. Your stats are labour related costs, I was referring to irelands corporation tax take, which is far higher than it should be. For reasons publicised recently.

Do not take my 5 years as a hard figure, I stopped saying medium term as people got confused. I'm assuming you didn't take it as a hard number anyway as you were looking for indicators for another fall. Macro economic conditions will dictate the speed of the next fall but we will see rises before this happens and unless the housing regulations are reversed, the fall will be nowhere as bad. As a timeline... Oil rises, end of EU QE, bank refinancing (higher interest rates) EU govs collectively softening economic policy to increase inflation to reduce gov debt in real terms is a cycle that has been activly pushed by western gives for over a century. Money is moving east and we will cycle through this for the next 30 years or so. The EU won't see any significant growth (in real terms) allowing for further deflation if the west and the reduced growth of the BRICS due to increased regulation.

This is based on the now. Now in 5 years might be different hahahaha

Just so you are aware. A flat in a crappy bit of town in an Indian or Chinese city, that lists plumbed water as a 'feature' and comes with a load of crap you don't get in the west. would as of right now, cost you at least 200k. In a country where you would be earning around 3 times less. Suddenly the west looks cheap and we have to wait for the eadts collapse.

Money moves from east to west and back. It always has done and will continue to. Its economic manufactured growth, bubbles and busts.

FYI I sold in 06, seeing the crash, spent 2 years wondering wtf was still going on before the poop hit the fan. I rebought at the end of 2013, which looks a lit like the bottom of this cycle.

If depreciation takes hold, all bets are off.

househero

quadrifoglio verde wrote: »

Dublin has been a wealthy and stable property market for over 200 years?
I beg to differ.
Well Irish Times has done the research for me
http://www.irishtimes.com/life-and-style/homes-and-property/300-years-of-property-booms-and-busts-1.2111375

There is no such thing as a long term stable market. Bitcoins, oil, gold, hogs, wheat, Apple shares, they all go through booms and busts , nothing that can be speculated on is stable.

Don't quote a newspaper hahaha

If you bother to read the actual study that the journalist is writing about, you will see prices have risen in real terms with the exception of a 30 year period immediately preceding when we kicked the bjaysus out of the English (local instability).

In economic terms a stable market does NOT mean prices will be the same one year to the next. This is where I think you may have got confused. It means it will follow economic growth and asset appreciation in the medium term (averages basically). A 200 year history of rising prices is as stable as it gets.

You explained exactly this point very well to the OP. In the end as long as your looking at the medium to long term, short term market changes are unimportant to a family.

The big exception is Japan and deflation

househero

bingowings2015 wrote: »

I came into a little money recently and find myself with the deposit for a house. I'm confident of getting a mortgage but not sure if to go for it, or not?

Should I wait or bite the bullet?

If you need a house buy it. They are cheap enough. Don't buy an over valued property in a select pocket of Dub and you'll be grand lad.

ted1

househero wrote: »

If you need a house buy it. They are cheap enough. Don't buy an over valued property in a select pocket of Dub and you'll be grand lad.

That's very poor advice, dublin properties will ALWAYS. Be more desirable than rural properties, you need to pad out your advice. Maybe you simply meant to say " don't buy over valued properties "

househero

ted1 wrote: »

That's very poor advice, dublin properties will ALWAYS. Be more desirable than rural properties, you need to pad out your advice. Maybe you simply meant to say " don't buy over valued properties "

No I meant what i said. You misread it. Don't buy in overpriced select pockets of dub...

Buy in dub. Don't buy an overpriced house in dub as there are still many good value properties to be snapped up.

mickman

househero wrote: »

No I meant what i said. You misread it. Don't buy in overpriced select pockets of dub...

Buy in dub. Don't buy an overpriced house in dub as there are still many good value properties to be snapped up.

Going by your handle , sounds like you got lucky when you sold in 2006 and now you reckon you can time the market :-)

Henry Ford III

From another thread nearby.

househero wrote: »

We payed (a rental deposit in) cash. The arsehole claimed we didn't pay when we left. We couldn't do anything about it. I wrecked his house before I left.

Might be a good idea to factor this in when considering househeros opinion on all matters property.

kuntboy

goz83 wrote: »

Nothing like a place to call home, rather than a place to argue with your landlord about.

Except you don't really "own" it do you? You effectively "rent" it off the government via property tax.

In the UK people's assets (including their home) are routinely seized and sold to pay council tax if they are in arrears.

mickman

Henry Ford III wrote: »

From another thread nearby.



Might be a good idea to factor this in when considering househeros opinion on all matters property.

Sounds like a decent guy :-)

Atlantic Dawn

If you can afford a house now and your plan is to live in the house go ahead and buy it. If your looking to buy as an investment to make money don't go buying for atleast 5 years.

ezra_pound

kuntboy wrote: »

Except you don't really "own" it do you? You effectively "rent" it off the government via property tax.

In the UK people's assets (including their home) are routinely seized and sold to pay council tax if they are in arrears.

Of course you own it. I pay 7e lpt a week. Is this the rent for my house?

stringed theory

househero wrote: »

Just so you are aware. A flat in a crappy bit of town in an Indian or Chinese city, that lists plumbed water as a 'feature' and comes with a load of crap you don't get in the west. would as of right now, cost you at least 200k. In a country where you would be earning around 3 times less. Suddenly the west looks cheap and we have to wait for the eadts collapse.

Typical definition of India middle class: income of over €3000 per annum.

So a tiny minority can afford 200k for an apartment, and, actually, they are quite stuck for choice. There are very few places in Indian cities where you can escape the appalling Indian environment. China is better, but there is still the same problem of limited demand for an even more limited supply of desirable accommodation.

In contrast, western countries have an enormous range of attractive and desirable places to live in, and city prices will increasingly be underpinned by immigration from Asia.
Investment funds may swing between East and West, but actual immigration is almost entirely a one way street, and likely to remain so.

Archaeoliz

johnp001 wrote: »

The only reference I could find for Ireland's relative tax take put it as very low within the EU (bottom in EU15, fifth from bottom in EU27), do you have an alternative reference?

Those figures quoted are from 2007-2008.

There is a publication "Debunking Irish Income Tax Myths" available online in pdf format published in September 2014. It states "Ireland is not a low income tax country... Since 2010 Ireland has experienced a sharp jump in taxation of personal incomes... The rise has seen Ireland become the 5th highest tax jurisdiction for personal incomes in the EU".

Can't seem to link to the pdf but a Google search will bring it up if you're interested.

Sala

OP I think if you have a decent deposit, can comfortably afford the mortgage, are not buying to get on the ladder (ie a one bed that you only intend to keep for a couple years), and find something you like in location you like, go ahead and buy. If prices go down you may well be annoyed but that's the worst you'll be provided you have bought something suitable you can afford. If prices goes up, similarly it won't affect you, unless you have bought the wrong property for you and need to sell.

I think the worst thing you can do, which seems to be happening now with the AIP situation, is panic buy. You may make a costly error

alastair

Archaeoliz wrote: »

Those figures quoted are from 2007-2008.

There is a publication "Debunking Irish Income Tax Myths" available online in pdf format published in September 2014. It states "Ireland is not a low income tax country... Since 2010 Ireland has experienced a sharp jump in taxation of personal incomes... The rise has seen Ireland become the 5th highest tax jurisdiction for personal incomes in the EU".

Can't seem to link to the pdf but a Google search will bring it up if you're interested.

Ahh - IBEC's rather strange interpretation of how to read the taxation stats. And from a body well known for it's considered position on taxation of any kind.
Right.

http://www.irishleftreview.org/2014/09/30/ibecs-myth-debunking-bunk/
http://www.tasc.ie/download/pdf/tasc_response_to_ibec_tax_analysis.pdf

goz83

kuntboy wrote: »

Except you don't really "own" it do you? You effectively "rent" it off the government via property tax.

In the UK people's assets (including their home) are routinely seized and sold to pay council tax if they are in arrears.

I think you might have posted before you drank your coffee.

Villa05

mickman wrote:

Going by your handle , sounds like you got lucky when you sold in 2006 and now you reckon you can time the market :-)

It's not that terribly difficult. Many saw the crash coming well up to a year in advance.

The Spider

Villa05 wrote: »

It's not that terribly difficult. Many saw the crash coming well up to a year in advance.

They did, and I'll count myself among them, however people are now applying the same criteria against this rise rise in prices, which is a mistake, we don't have 100 percent mortgages or trackers any more. We also don't have an economy based on building, but we do have the fastest growing economy in Europe.

We also have no supply because of the building industry collapse. Banks aren't going to collapse again.

Nope things are different this time around, and applying the logic that led to the last crash is a fools game, different circumstances.

bluemartin

bingowings2015 wrote: »

I came into a little money recently and find myself with the deposit for a house. I'm confident of getting a mortgage but not sure if to go for it, or not?

Should I wait or bite the bullet?

How wonderful for you, many have to save and scrimp for years before they have the much needed house deposit so you are very lucky.

Every one needs a place to live in, why squander it on rent when you could have your own place. Some say its better to rent but I can honestly that when you retire, you have far far more security in your old age when you have your own little teacht.
Don't worry about house prices rising or falling that's not relevant when you looking for a home to live in. Lots of people waited and waited for the right time to buy in Dublin but unfortunately in doing so they missed the boat.

mickman

Villa05 wrote: »

It's not that terribly difficult. Many saw the crash coming well up to a year in advance.

Maybe some people spotted it the first time but getting it right once doesn't mean people will be right again

evolving_doors

You also have to factor in the 'moving on' time OP.. you might wind up in your thirties and ready to move on (family/job) but only a dent in your first mortgage if youve waited (say 20k , so in the heel of the hunt you sell and get the 20k. You still need the deposit for a new gaffe then consider youll be starting over again on a new mortgage.

Could you get in early and start chipping away at the mortgage to give you more deposit leverage at the other end when the time comes?

Could you keep yer gaff and rent it out while you get a new gaffe (if the rent covers the mortgage on property 1 thats a sweet position to be in so it would make sense to get the mortgage paid off ASAP to get a better ratio)?

Then again the cost of monthly mortgage now verses the rent youre paying now is important. If theres say a difference of say 300pm even then calculate would that be just as much as the difference yould get from selling a house in 10 yrs time (30k)?

But then again the possibility of having a gaffe to rent out is gone if youve been renting and waiting (or just kicked down the road by ten years).

Do you think a house might be a better option than throwing money into a pension. (I would be considering my current house as a pension because I personally dont see any value in putting much money into costly pension schemes myself).

I spse though it all depends on the totality of your finances and planing for future (family etc!)

But to the substantive question , will prices go down in the capital? I would say no given the strong rental demand. Even in times of recession people flock to capital centres and this has largely happened with dublin.

I think value for money is predominately based around the rental value. Dont forget there is a baby boom still to filter through the system in about 15-20 years. So the demand for family houses/college rentals will definitely be there then.

Panda_Turtle

Gebgbegb wrote: »

Dont forget there is a baby boom still to filter through the system in about 15-20 years. So the demand for family houses/college rentals will definitely be there then.

Baby boom? Aren't people having less kids these days?

goz83

The Spider wrote: »

They did, and I'll count myself among them, however people are now applying the same criteria against this rise rise in prices, which is a mistake, we don't have 100 percent mortgages or trackers any more. We also don't have an economy based on building, but we do have the fastest growing economy in Europe.

We also have no supply because of the building industry collapse. Banks aren't going to collapse again.

Nope things are different this time around, and applying the logic that led to the last crash is a fools game, different circumstances.

I don't think that's exactly right. Banks are driven by profit, rather than the needs of society. Just when you think a lesson has been learned, they feed the greed. Soon enough, that greed turns into a monster and breaks loose, destroying everything around it. Sorry for the melodram, but I don't think the banks will ever have societies best intentions in mind, even if it meant stability for the banks. They chase the money, that is their nature.

It is only a matter of time before we have another booming construction sector. In the last year alone, I have seen foundation developments turn into homes and they are probably already sold (belmayne/parkedge). Vacant apartment blocks are now filled after years of being practically empty. Demand is beating supply and rather quickly too....here in Dublin anyway. The tight grips on the banks are loosening, as currencly flows through them, massaging the hands of an empty minded puppet government. There will be a crash. It is the belief that we are stronger and wiser that will guarantee the crash hits us harder than the last. As a society, we have just stepped outside after our stay in hospital. if we are not very careful, we will be mowed down by a speeding brinks van, as we cross the road to order a brand new bmw.....paddy spec of course

Panda_Turtle wrote: »

Baby boom? Aren't people having less kids these days?

Perhaps some are, but not from what I have seen. I'm one of the squeezed middle, i'm in my early 30s and baby number 5 is on the way

My sister in her mid twenties is expecting baby number 4 :eek:

My sister in law is pregnant on her first and she is late twenties, but in general, i think the average is still high.

Duckjob

Gebgbegb wrote: »

You also have to factor in the 'moving on' time OP.. you might wind up in your thirties and ready to move on (family/job) but only a dent in your first mortgage if youve waited (say 20k , so in the heel of the hunt you sell and get the 20k. You still need the deposit for a new gaffe then consider youll be starting over again on a new mortgage.

You seem to be assuming the OP plans to buy something that he'll grow out in the new few years. That sounds suspiciously like the "property ladder / starter home" horsesh*t that EAs had everyone buying into 10 yrs ago.

What if the OP buys something now that can meet his future needs for family etc ?

gaius c

To answer the question in the OP, we may already be past the top of the peak and in the downward phase.

Barely Hedged

goz83 wrote: »

I don't think that's exactly right. Banks are driven by profit, rather than the needs of society. Just when you think a lesson has been learned, they feed the greed. Soon enough, that greed turns into a monster and breaks loose, destroying everything around it. Sorry for the melodram, but I don't think the banks will ever have societies best intentions in mind, even if it meant stability for the banks. They chase the money, that is their nature.

It is only a matter of time before we have another booming construction sector. In the last year alone, I have seen foundation developments turn into homes and they are probably already sold (belmayne/parkedge). Vacant apartment blocks are now filled after years of being practically empty. Demand is beating supply and rather quickly too....here in Dublin anyway. The tight grips on the banks are loosening, as currencly flows through them, massaging the hands of an empty minded puppet government. There will be a crash. It is the belief that we are stronger and wiser that will guarantee the crash hits us harder than the last. As a society, we have just stepped outside after our stay in hospital. if we are not very careful, we will be mowed down by a speeding brinks van, as we cross the road to order a brand new bmw.....paddy spec of course
.

To be honest, this post is just meandering waffle of the highest order.

The original poster will be well advised to ignore everything in it

goz83

Barely Hedged wrote: »

To be honest, this post is just meandering waffle of the highest order.

The original poster will be well advised to ignore everything in it

To be honest, i think your own posts are full of fictitious shîte.

Yeah, my above post was a bit colourful. Let me tell you a little secret though......it was meant to be!

Still plenty of truth in it, even if there is a little intended waffle.

Barely Hedged

goz83 wrote: »

To be honest, i think your own posts are full of fictitious shîte.

Yeah, my above post was a bit colourful. Let me tell you a little secret though......it was meant to be!

Still plenty of truth in it, even if there is a little intended waffle.

What posts would they be that are full of fictitious ****e?

Ill let you in on another little secret. Theres no way of establishing tone from a post on an internet forum unless it's very specific. There was nothing specific about your post just rambling nonsense.

The_Morrigan

Barely Hedged wrote: »

To be honest, this post is just meandering waffle of the highest order.

The original poster will be well advised to ignore everything in it

goz83 wrote: »

To be honest, i think your own posts are full of fictitious shîte.

Yeah, my above post was a bit colourful. Let me tell you a little secret though......it was meant to be!

Still plenty of truth in it, even if there is a little intended waffle.

Barely Hedged wrote: »

What posts would they be that are full of fictitious ****e?

Ill let you in on another little secret. Theres no way of establishing tone from a post on an internet forum unless it's very specific. There was nothing specific about your post just rambling nonsense.

Cut it out the two of you.

Panda_Turtle

goz83 wrote: »

Perhaps some are, but not from what I have seen. I'm one of the squeezed middle, i'm in my early 30s and baby number 5 is on the way

My sister in her mid twenties is expecting baby number 4 :eek:

My sister in law is pregnant on her first and she is late twenties, but in general, i think the average is still high.

Jeeze, you and your sister in law are busy, still plenty of time to pop out another ten between ya's

Not the average as far as I can see

Eric Cartman

bingowings2015 wrote: »

I came into a little money recently and find myself with the deposit for a house. I'm confident of getting a mortgage but not sure if to go for it, or not?

Should I wait or bite the bullet?

If your looking at a 3 bed semi or smaller then id wait. New mortgage rules especially for FTB will have a deflating effect on prices for these type properties, especially apartments. If your looking for something larger and planning to stay for a decade then yeah by all means go for it while interest rates are in the pan, those will track inflation and if you can even get 5 years of eroding the principal youll be better off even if values sink a little again.

* ofcourse the apartments and 3bsemi rules dont apply to dublin 2,4,6,6w - those apartments and semi's arent ever going to be ftb pricing

bluemartin

Eric Cartman wrote: »

If your looking at a 3 bed semi or smaller then id wait. New mortgage rules especially for FTB will have a deflating effect on prices for these type properties, especially apartments.

Why do you say that?

You will be paying it for 20 or 30 years. Interest rates can only go one way in that period - up!. Factor in what interest rates of 10% to 15% (perfectly usual historically) would do to your repayments and the property market...

The tax system in Ireland is strongly geared towards supporting the housing market. If you just wanted to invest a windfall, you should be better off investing in blue chip stocks and shares long term, and your money would be more accessible, but these are penalised in Ireland compared to many other countries.

The_Conductor

Deleted User wrote: »

You will be paying it for 20 or 30 years. Interest rates can only go one way in that period - up!. Factor in what interest rates of 10% to 15% (perfectly usual historically) would do to your repayments and the property market...

While interest rates are at a historically low level, Europewide- and can only go in one direction- to point your finger at a point in the 80s when we were going it alone and somehow suggest that its a useful historical comparitor- is nonsense. The ECB is a composite of a basket of currencies- the only useful historical comparitor- would be to graph how the combined interest rates of the constituent currencies moved over-time- in the same proportional weight each is assigned in the Euro. Our historical max of 18% would only be 2% of the basket. Ireland was, in fact, the only EMS currency which did not move in tandem with German interest rates between 1979 and 1988. Mairead Devine wrote a very interesting paper on this a few years back- I'll see if I can find you a link..........

Edit- link to Máiréad's report here

Deleted User wrote: »

The tax system in Ireland is strongly geared towards supporting the housing market. If you just wanted to invest a windfall, you should be better off investing in blue chip stocks and shares long term, and your money would be more accessible, but these are penalised in Ireland compared to many other countries.

The taxsystem-and political interventions in the market place- may have traditionally supported the housing market. Present policies are however the flipside of the coin.

Interest, as an allowable deduction for investors, has been cut to 75% and stated policy is to remove it.

Deposits for FTBs @ 80% are prudent- and arguably 60% for investors, are also prudent. These are new policies.

MIS and other rental and supports for tenants and owners have stagnated and/or reduced.

FIS- has been restructured to remove an emphasis on ignoring property ownership, and also all childcare costs are out of the equation (i.e. if you're on a good wage- but its all going on childcare- tough cookies......)

Arguably- individualisation of the tax bands itself- a fundamental policy of McCreevy and one he has stated is part of his proud legacy- has itself- undermined the traditional family unit- and made dual income households a necessity for anyone who intends to buy (wholly independently of any talk of income muliples for property prices etc).

Since 1997-1998- government policy, and more recently, Central Bank intervention (albeit at the instigation of the ECB)- has been to implement policies that supported the employment market- which was welcome after the abusive ecomonic policies of most of our governments since independence. Since 1994- this improved cashflow- provided income to people- who hitherto would have been unable to imagine buying their own property- and as a consequence- stayed in Ireland to work and bring up their families here- where they would otherwise have emigrated.

I grew up in an Ireland of the 70s and 80s. Many people imagine the last 5-6 years of emigration to be a new thing. Well- its not. Its been a traditional pressure valve for the Irish government- if they can't provide jobs for people- hell, we'll export them instead.........

Any support the property market got- aside from schemes for first time buyers- of questionable value- as they encouraged short-term-ism, and people to view a box sized apartment as 'getting on the property ladder' with the intention of trading up- was coincidental, rather than intentional.

The biggest travesty in our economic independence- was the manner in which the government gorged itself on stamp duty.......... This was an incidental income stream that no-one had imagined would turn into the torrent it did. Once the government had this income- by god they would do nothing to jeopardise it. Their policies were geared towards protecting their income though- and once again- the housing market itself was an incidental beneficiary of all of this.

The original Bacon reports- go through this- step by step in the mid-to-latter 90s. It got ignored- it wasn't politically acceptable to acknowledge it- despite the fact that it was a commissioned report.........

People seem to think that there is a master road-map somewhere, that economists, central banks and governments adhere to. Well- there isn't. They stumble from emergency to emergency. They have unexpected windfalls. They have financial ruins. Political decisions of today are locked away from examination for decades- and when they're finally opened- politicians assume that history may view their shortcomings in a kinder light than the harsh criticisms they would face were they to be debated by the people of the day.

If there is another bubble- its not that it was foreseeable, on unforeseeable- its because of a lack of will to take actions- good or bad- and the expediency of sitting back and allowing whatever is coming down the road, to arrive- and sure, if its providential- we're grand, and if its not- we'll deal with it- when we have to deal with it, and not a minute before.

Firefighting- should be left for the unforeseen- and not be used as an everyday mechanism for dealing with entirely probable courses of events. Unfortunately, in an Irish context- we have forgotten this salient point.

Crumbs868

Eric Cartman wrote: »

If your looking at a 3 bed semi or smaller then id wait. New mortgage rules especially for FTB will have a deflating effect on prices for these type properties, especially apartments. If your looking for something larger and planning to stay for a decade then yeah by all means go for it while interest rates are in the pan, those will track inflation and if you can even get 5 years of eroding the principal youll be better off even if values sink a little again.

* ofcourse the apartments and 3bsemi rules dont apply to dublin 2,4,6,6w - those apartments and semi's arent ever going to be ftb pricing

To put a different spin on falling houses

Say we have another dip in prices (3bed semi falls €25k/10%). For a lot of owners in negative equity they are only willing to accept a certain price(otherwise it's not worth their while / they have nowhere to go / bank won't let them) so this €25k may be the difference between them putting their house on the market and not. So I believe another fall in house prices will actually reduce available stock further.

My point is everyone has a theory (including both my own and yours) and they really are just people's predictions / best guesses with lots of holes in them.

The_Conductor

The_Conductor wrote: »

The taxsystem-and political interventions in the market place- may have traditionally supported the housing market. Present policies are however the flipside of the coin.

Policies to support the housing market may be less than in the past. However the fact that the OP is considering housing as a suitable place to invest a windfall illustrates that other, logically better, investments such as stocks and shares are still considerably disadvantaged from a tax perspective in Ireland compared to property.

For comparison, in Belgium dirt tax is 30% and this meets the liability regardless of the marginal tax rate and there is no cgt on investment gains.

Barely Hedged

Crumbs868 wrote: »

To put a different spin on falling houses

Say we have another dip in prices (3bed semi falls €25k/10%). For a lot of owners in negative equity they are only willing to accept a certain price(otherwise it's not worth their while / they have nowhere to go / bank won't let them) so this €25k may be the difference between them putting their house on the market and not. So I believe another fall in house prices will actually reduce available stock further.

My point is everyone has a theory (including both my own and yours) and they really are just people's predictions / best guesses with lots of holes in them.

All the banks offer negative equity mortgages. How would this affect your example above?

Eric Cartman

bluemartin wrote: »

Why do you say that?

With the 220k ftb limit coming a lot of stock will move from 250k-275k into the 220k bracket, apartments will decrease to make them seem attractive compared to it , larger homes will be mostly unaffected by it though

Villa05

The_Conductor wrote:

The original Bacon reports- go through this- step by step in the mid-to-latter 90s. It got ignored- it wasn't politically acceptable to acknowledge it- despite the fact that it was a commissioned report.........

The_Conductor wrote:

While interest rates are at a historically low level, Europewide- and can only go in one direction- to point your finger at a point in the 80s when we were going it alone and somehow suggest that its a useful historical comparitor- is nonsense. The ECB is a composite of a basket of currencies- the only useful historical comparitor- would be to graph how the combined interest rates of the constituent currencies moved over-time- in the same proportional weight each is assigned in the Euro. Our historical max of 18% would only be 2% of the basket. Ireland was, in fact, the only EMS currency which did not move in tandem with German interest rates between 1979 and 1988. Mairead Devine wrote a very interesting paper on this a few years back- I'll see if I can find you a link..........

Would it be fair to assume that our mortgage rates will be the same as the eu average going forward, when our current rates are more than double the eu average.
Everywhere in this country we have to pay for someone else's mistakes.
We show very little sign of learning from those mistakes, so comparing with normal markets is unfair when we are incapable of providing a normal functioning market.

evolving_doors

Panda_Turtle wrote: »

Baby boom? Aren't people having less kids these days?

maybe this year I dont know, but in the last few years yes, definite boom in kids. See news reports today about increasing class sizes etc

even if the numbers are dropping there is still a current housing shortage to deal with... and no way is that going to improve enough.