Property Market 2016

Villa05

Shedite27 wrote:

But it's only FTB, so really the government's logic is that they're giving FTB'ers a €20k gift to let them compete with trader-uppers/downers.

I would suspect that FTB would be in a better position than alot of trader - uppers as the trader - upper may have negative equity and a couple of kids now.

Michael D Not Higgins

Villa05 wrote: »

I would suspect that FTB would be in a better position than alot of trader - uppers as the trader - upper may have negative equity and a couple of kids now.

A trader upper with negative equity doesn't have to meet the deposit requirements and if they have only a small bit of positive equity and high expenses (like children) then they mightn't be able to meet the stress testing requirements of the underwriting anyway which the FTBs also have to meet.

The other thing going for them is that they currently have a house, which the FTB does not. I know this leaves a small subset of people in unsuitable housing as they can't move and I'm not aware of any statistics that may cover who's worst off, but the idea is to boost building and supply which should help everyone in the long run.

It shouldn't be a competition about who has it worst off anyway. If there's a large minority of people owning unsuitable accommodation due to the market collapse and credit restrictions they should be petitioning their TDs for their own solution - which is likely to be get the price of property up to boost my equity which the government have been accused of numerous times anyway.

Villa05

Michael D Not Higgins wrote:

but the idea is to boost building and supply which should help everyone in the long run.

There are several ways of boosting supply, some which would even generate revenue for the state like a use it or loose it tax.

The state owns most of the banks, why is it so costly to borrow to build in an environment of pent up demand and record low interest rates

This grant is there to boost price, little else.


The budget speeches were full of the threats posed by Brexit. One of those threats is our economy loosing competitiveness. Driving up house prices exacerbates that problem.

Why recite a speech about dangers of Brexit when yet again politicians are part of the problem not the solution

Michael D Not Higgins

I've said elsewhere that this is only a short term measure. Addressing supply in the medium and long term takes more effort which I hope the government actually tackles rather than just lip service measures such as these. But if they can deliver this as a suite of measures to deal with the housing issue then it will be a success. Alone it will fail.

Bob24

Not sure what results it will yield, but kudos to the central bank for not taking the crap and outlining the drawbacks of the scheme (it also shows the government was not fully honest when it announced the central bank had already agreed the full amount of the tax rebate could be used as a deposit): http://www.irishtimes.com/news/politics/noonan-forced-to-alter-threshold-in-help-to-buy-plan-1.2836089

Lowering the cap is not sufficient but it would be a start.

Harvey Normal

There's a general myth that Ireland and the UK have very high house ownership rates compared to the EU average. This just isn't true. Here are the stats. Ireland isn't there but the uk is 5th lowest, just above Denmark. And falling. It fell below France a few years ago. If trends continue as now (that is in 35 years if 70 year olds and below have the same ownership rates as 35 year olds do now) it will fall to 30% or so.

https://www.statista.com/statistics/246355/home-ownership-rate-in-europe/

For whatever reason we've gotten this meme into our heads that we should re-align our society to a non existent norm.

That's important because it stops proper debate. Why are house ownership levels so low in Ireland (answer - price). How do other countries build cheap housing?

Instead we get the opposite arguments.

jive

Harvey Normal wrote: »

For whatever reason we've gotten this meme into our heads that we should re-align our society to a non existent norm.

That's important because it stops proper debate. Why are house ownership levels so low in Ireland (answer - price). How do other countries build cheap housing?

Instead we get the opposite arguments.

Beyond pensions Irish people don't invest in anything other than property. In other countries people can invest in equities without the complex tax implications that we have here. As a result the wealthier people end up with multiple properties and rent them out. This impacts to supply of houses which can be purchased by existing renters. It would be interesting to see the % of Irish with multiple properties vs. our Western European counterparts.

The Govt. should reduce CGT and tax complexities associated with personal investments into stocks/bonds/etc. This would move people away from the current trend of buying and letting out properties as their only form of investment with their excess income.

gaius c

Bob24 wrote: »

Not sure what results it will yield, but kudos to the central bank for not taking the crap and outlining the drawbacks of the scheme (it also shows the government was not fully honest when it announced the central bank had already agreed the full amount of the tax rebate could be used as a deposit): http://www.irishtimes.com/news/politics/noonan-forced-to-alter-threshold-in-help-to-buy-plan-1.2836089

Lowering the cap is not sufficient but it would be a start.

Yeah. Was very suspicious when they claimed the central bank was on board with their scheme.

Carlos Orange

Harvey Normal wrote: »

For whatever reason we've gotten this meme into our heads that we should re-align our society to a non existent norm.

Is it a non existent norm if things used to be like that? Home ownership rates have been declining since 1991, rising before that.

http://www.cso.ie/en/media/csoie/census/documents/census2011profile4/Profile_4_The_Roof_over_our_Heads_Full_doc_sig_amended.pdf

Harvey Normal

psinno wrote: »

Harvey Normal wrote: »

For whatever reason we've gotten this meme into our heads that we should re-align our society to a non existent norm.

Is it a non existent norm if things used to be like that? Home ownership rates have been declining since 1991, rising before that.

http://www.cso.ie/en/media/csoie/census/documents/census2011profile4/Profile_4_The_Roof_over_our_Heads_Full_doc_sig_amended.pdf

The nonexistent European norm is what I taking about.

ILikeBananas

The latest monthly data is out and RTE have to include the obligatory line:

Property prices nationally are still on average 33.7% below their 2007 peak

This drives me crazy. Like why are they pegging values to something that has been accepted by all was the result of a mass mania in the population. Is this something that RTE (and all the other media outlets who always include that line) fees that we should be aspiring to?

It's like saying "Jewish Genocide deaths are down 6 million this decade from their peak in the 1940's"

brownbeard

ILikeBananas wrote: »

The latest monthly data is out and RTE have to include the obligatory line:

Property prices nationally are still on average 33.7% below their 2007 peak

This drives me crazy. Like why are they pegging values to something that has been accepted by all was the result of a mass mania in the population. Is this something that RTE (and all the other media outlets who always include that line) fees that we should be aspiring to?

It's like saying "Jewish Genocide deaths are down 6 million this decade from their peak in the 1940's"

I think the word "Still" is whats really unsettling. As though we're "Still" not back to where we "Should" be.

jay0109

ILikeBananas wrote: »

. Like why are they pegging values to something that has been accepted by all was the result of a mass mania in the population.

Well, 2007 is the target for everyone...ask the PS/CS that are going out on strike :P
RTE is just en vogue!

lcwill

jive wrote: »

Beyond pensions Irish people don't invest in anything other than property. In other countries people can invest in equities without the complex tax implications that we have here. As a result the wealthier people end up with multiple properties and rent them out. This impacts to supply of houses which can be purchased by existing renters. It would be interesting to see the % of Irish with multiple properties vs. our Western European counterparts.

The Govt. should reduce CGT and tax complexities associated with personal investments into stocks/bonds/etc. This would move people away from the current trend of buying and letting out properties as their only form of investment with their excess income.

I think you may have hit a nail on the head here.

In Ireland the attractiveness of property investment relative to the stock market is largely determined by differences in taxation - this was definitely a major factor in my own property investment decisions.

This is entirely within the governments control - not by coming down harder on property necessarily but by bringing taxation of dividends and capital gains on equities (especially on ETFs) more in line with the rest of the developed world.

cnocbui

lcwill wrote: »

I think you may have hit a nail on the head here.

In Ireland the attractiveness of property investment relative to the stock market is largely determined by differences in taxation - this was definitely a major factor in my own property investment decisions.

This is entirely within the governments control - not by coming down harder on property necessarily but by bringing taxation of dividends and capital gains on equities (especially on ETFs) more in line with the rest of the developed world.

Speaking of the developed world, they can start by abolishing DIRT and taxing interest as income, not as the proceeds of crime.

Very recently, the American Chamber of Commerce took a shot at the Irish governments taxation of share options: http://www.irishtimes.com/business/economy/us-firms-push-for-tax-breaks-on-irish-share-options-1.2711570

“The high level of the personal tax in Ireland has been raised as a concern, and reform in this area would make Ireland more attractive location for talented people to locate,” it said.

MintyMagnum

Has the 2nd hand market stalled or become depressed at the lower end since the budget?

The_Conductor

MintyMagnum wrote: »

Has the 2nd hand market stalled or become depressed at the lower end since the budget?

Still going strong- no apparent slowdown- this is from talking to a few estate agents who cover residential property in D2,D4,D6 and Dublin West/North Kildare.

Keep in mind- first time buyers- were such a small segment of the market before the new scheme was announced.

The biggest change reported (by a Sherry Fitz agent in Maynooth)- is the exclusion of non-first-time-buyers from new property- aka- new property is pretty much being ring fenced in its entirety by first time buyers- who are much more financially capable than other demographics to purchase now.

The group held up as having vanished from the market- are predominantly those who wished to trade down.

Market is still a supply constrained basket case- to the extent that while new developments are being bought almost exclusively by first time buyers- the lack of a grant on second hand properties- has not had any appreciable difference in the percentage of them going to first time buyers (aka- there is a cohort of first time buyers out there- for whom the lack of the FTB grant- is not a determining factor- and they'd rather look at the market as a whole, than focus on the few new developments coming on stream........

The big thing here- is a large cohort of prospective first time buyers- who would have been expected to hit the market searching for their first properties over the next 24-36 months- have instead all hit the ground running simultaneously- however, there has not been a commensurate increase in supply to satisfy the almost 40k prospective new buyers- and despite the grant- there is still no announcements of sizeable developments in reasonable locations (ok- there have been a few smaller developments announced around the place- but nothing substantial).

CIF are bitching that the budget was a 'wasted opportunity' (not entirely sure how they figure this- seeing as its effectively put 20k on the price of new builds overnight.......)

mel123

http://www.independent.ie/business/personal-finance/rents-surge-as-one-in-six-buyers-gets-lending-exemption-35196911.html

I didn't realise the CB were reviewing the rules. Anyone like to hazard a guess on what the reviews will be if there are any changes?

Muff Richardson

mel123 wrote: »

http://www.independent.ie/business/personal-finance/rents-surge-as-one-in-six-buyers-gets-lending-exemption-35196911.html

I didn't realise the CB were reviewing the rules. Anyone like to hazard a guess on what the reviews will be if there are any changes?

what rules?

http://www.irishtimes.com/business/personal-finance/buyers-still-getting-100-per-cent-mortgages-central-bank-figures-show-1.2858016

ligerdub

That's a misleading story. The banks have a certain percentage of loans which can go outside of the rules, 16% I believe.

Rew

ligerdub wrote: »

That's a misleading story. The banks have a certain percentage of loans which can go outside of the rules, 16% I believe.

Its a percentage of the value of their loans not percentage of number of loans

ligerdub

Rew wrote: »

Its a percentage of the value of their loans not percentage of number of loans

Fair enough, point still stands.

Fian

Rental increases are starting to bite harder now, since it is approaching two years since the last legislative freeze.

There seems to be some speculation that further legislation may be incoming. Hope not, i thin it would ultimately be counterproductive, benefiting sitting tenants but making it even more difficult for "new" tenants to get a place.

The_Conductor

Fian wrote: »

Rental increases are starting to bite harder now, since it is approaching two years since the last legislative freeze.

There seems to be some speculation that further legislation may be incoming. Hope not, i thin it would ultimately be counterproductive, benefiting sitting tenants but making it even more difficult for "new" tenants to get a place.

The whole sector is a mess- and taxation policy is only driving these rental increases (along of course with the inalienable truth- that supplyside issues are quite simply not being addressed).

We need a constant stream of good quality accommodation located where people want to live- delivered on stream and on an ongoing basis- ASAP

Muff Richardson

ligerdub wrote: »

That's a misleading story. The banks have a certain percentage of loans which can go outside of the rules, 16% I believe.

How is it "misleading"...it's reporting on verified facts and figures provided by the Central Bank. It's not a long winded opinion piece full of conjecture, the only opinion offered is the last paragraph where it states that its not a return to the madness that was between 2005-2008 with 100% mortgages given out left right and centre.

whiskeyman

Fian wrote: »

Rental increases are starting to bite harder now, since it is approaching two years since the last legislative freeze.

This.

There's probably many, like me, who in just a couple of months will have landlords jacking up the price by literally hundreds to current 'market rates'.

If he wanted, our landlord could up it by €500 no problem.

draiochtanois

This post has been deleted.

Villa05

draiochtanois wrote:

This post has been deleted.

Who is subsidising who. The landlord paying the difference between rent and mortgage or the tennant paying rent to match the bubble mortgage of the noughties

Both issues have the same root cause; overpriced property

Creol1

http://www.irishtimes.com/life-and-style/homes-and-property/accidental-landlord-most-of-us-just-want-to-break-even-1.2859160

"No-one mentions the tenant who demands a kettle and toaster, citing a legal obligation for a landlord to provide the basics."

Snakeblood

Creol1 wrote: »

http://www.irishtimes.com/life-and-style/homes-and-property/accidental-landlord-most-of-us-just-want-to-break-even-1.2859160

"Two years ago, I became an ‘accidental landlord’. Six years previously, I’d bought a starter home in Dublin 8. Around that time, you’ll recall a maddening cultural cacophony about bricks and mortar being an unfailingly sound investment, and how owning a home was a milestone to be met in adulthood. We were all at it, if we could manage it (and in some cases, even if we couldn’t). Buyers’ remorse, negative equity, rising interest rates… they weren’t meant to be part of the bargain, but here most of us are anyway."

I never like attempts to absolve yourself of guilt entirely.

'we were all at it' 'even if some of us couldn't manage it we did'. I wonder does the author count themselves in the couldn't manage it category? Why bring up the 'couldn't manage it' people otherwise

If you were buying a 'starter home' you were expecting, essentially to get other people to give you free money when you sold your starter house, so you could get a bigger house. It didn't work out that way because you couldn't sell your house.

Bringing the above up to establish you are an accidental landlord who got knocked up with a house is a bit rich.

And complaining that the rent doesn't (always) cover the mortgage:

At the end of this, the author will have a property they can sell for money, and they will have paid remarkably little of the mortgage themselves.

Buying kettles and dealing with tenants is what they are doing instead of spending their own money on the mortgage. Grow up.