Proposal for a Generous New Grant for First Time Buyers

What to make of this?
First-time buyers to get generous new grant

Favourite line is this one:

Finance Minister Michael Noonan is also wary about ensuring the scheme will not interfere with either the supply of, or demand for, housing.

I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

I mean, fine, if that's what we want - (I don't really think it is) - but why pretend interfering is not going to affect demand?

Can they not just say: 'we're introducing lots of measures as part of a housing package - some will affect will increase supply, some will increase demand, and we hope it all balances out but with fewer people on housing lists in the end'.

Villa05

Deleted User wrote:

I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

This should have its own thread titled Stupid?

mel123

Deleted User wrote: »

What to make of this?
First-time buyers to get generous new grant

Seriously, FTB already have a 'perk' with the amount of deposit they need compared to non first time buyers.
Is it not time the government looked at schemes to help people who want to trade/upgrade their home and find themselves in an impossible situation either due to negative equity or the twenty per cent deposit rule? Its like ok, you have a house, we dont need to help you, when personally I think a shift in this market might actually help the situation.

oh no, here we go again

Bob24

Deleted User wrote: »

What to make of this?
First-time buyers to get generous new grant

Favourite line is this one:


I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

It is also the line which stands out for me (and it did before reading your comment).

The Irish Times is mentioning VAT relieve for fist time buyers and a state funded to-up on mortgage deposits. While I don't think the first point is going to fix the problem (more supply is needed) I have no objection to it, but I think the second one is cynical and will make things worst. A "free" deposit top-up is a poisonous gift as will give all households leverage to borrow more, meaning increasing prices (given the restricted supply) and at the end of the day more debt for these households. Pretty much sounds like a way to override the CBI as it doesn't want to budge and relax lending rules.

The_Conductor

Guys- I've hived this off into its own thread- as I feel it warrants discussion in its own right- rather than as part of the main property market thread.

Personally- I believe the whole concept is flawed- the issue in an Irish context is lack of supply- and giving people more money is simply going to have extra money chasing a limited or in some cases, non-existent supply.

The only solution- and the best way to help first time buyers- is to construct decent accommodation units- with requisite facilities and amenities- where people want to or need to live. Until the issue of lack of supply is addressed in a meaningful manner- any other tinkering with the market is doomed to failure- at very best it may assist a few special purchasers- which in turn will only exacerbate the 'haves' and the 'have nots' in Irish society.

I would call on the Minister- to quit tinkering with schemes like this- and instead focus on measures to vastly enhance supply of decent quality, proper sized, units- esp. in our main metropolitan areas (in particular Dublin, Cork and Galway- but to a lesser extent- Waterford, Kilkenny hell- even Portlaoise these days.......)

We need houses built- we do not need extra money to chase non-existent housing stock.

Totally agree. And, as Mel123 said, they already made an exception for FTBs when introducing the mortgage rules.

What is so special about FTBs?!

I bought last year so I'm not directly affected but it is very frustrating for buyers to see fuel added to the fire like this. It's the kind of favour they can do without.

mydarkstar

Another not so wonderful idea by the Government. Since I'm no longer a 1st time buyer this kind of tinkering grinds my gears.

I've spent the last 5 years overpaying my mortgage to get me out of negative equity for the home I bought in 2004. Now I'm finally in a position to move and have a little equity to add to my savings for a 20% deposit. It is hard enough that we're bidding (unsuccessfully) against 1st time buyers who only need a 10% deposit, now they will also have extra assistance.

Lack of supply is the issue that needs to be addressed instead.

punisher5112

The help should be there for those that are stuck renting as they can't save as the rent prices are so high.

Why can't the bank etc.. See one is paying xxxx amount on rent and then be able to give a mortgage to .

It will then free up that property for someone else to rent.

zl1whqvjs75cdy

I am a potential first time buyer caught in the trap of massive rent costs making it difficult to save for a deposit. I still don't want this measure to be put in place. All it will do is drive up prices and make the bottom end of the market (sub 300 k) even more mental.

crisco10

I really wonder when I see things like this. Like Ixelles, I bought last year so this won't affect me. And I don't feel I "missed out" either; simple economics says that this money will simply go straight into the house prices as all FTB's will have more to spend.

But what it won't do is get trader-uppers moving out of the stock that FTB's might be interested in - not that everyone has a right to be a trader upper. There are many ways to influence the supply side. And this would help ALL buyers. Demand side economics is discriminatory by nature.

The other question of course is is this actually helping FTB's at all? It gives them access to more credit, but will ultimately put more debt on their shoulders in the long run.

snubbleste

mydarkstar wrote: »

Another not so wonderful idea by the Government. Since I'm no longer a 1st time buyer this kind of tinkering grinds my gears.
I've spent the last 5 years overpaying my mortgage to get me out of negative equity for the home I bought in 2004. Now I'm finally in a position to move and have a little equity to add to my savings for a 20% deposit. It is hard enough that we're bidding (unsuccessfully) against 1st time buyers who only need a 10% deposit, now they will also have extra assistance.
Lack of supply is the issue that needs to be addressed instead.

Did you not get assistance as a FTB then?

listermint

punisher5112 wrote: »

The help should be there for those that are stuck renting as they can't save as the rent prices are so high.

Why can't the bank etc.. See one is paying xxxx amount on rent and then be able to give a mortgage to .

It will then free up that property for someone else to rent.

Genuinely interested as to how that increases Supply of Stock ??

mydarkstar

snubbleste wrote: »

Did you not get assistance as a FTB then?

Yes, I got TRS in those years. The same as other people did.
Due to the level of the mortgage in the last 5 years the TRS amounts to about €200 each year. This isn't equivalent to the newly proposed help for FTB's.

ted1

Houses can not be built at cost the FTB can afford. That's why there are so few starter homes being built, most are larger houses from 500k up.

If they remove the VAT factor then developers can build houses that would sell for 350 for a lower price that FTB can afford

caff

I don't see how this will do much to increase housing availability other than to create more bidding wars in the immediate future. They should instead build more public housing or increase the viability of housing co-ops through fast tracked planning and access to credit.

Hopeful2016

mydarkstar wrote: »

Yes, I got TRS in those years. The same as other people did.
Due to the level of the mortgage in the last 5 years the TRS amounts to about €200 each year. This isn't equivalent to the newly proposed help for FTB's.

Tracker?

mydarkstar

Hopeful2016 wrote: »

Tracker?

No, an SVR. It was a small amount of mortgage, on an apartment that in 2009 onwards dropped to around the value of a new car (hence the negative equity).

One_Of_Shanks

It's another bad idea. They never learn.

What is needed is increased supply. Not more meddling.

Every time they interfere with half-baked ideas like this one it only serves to make things even worse.

Things that could be done to help Dublin's supply.

1 - Build some corporation houses (Very supply orientated)
2 - Build some public transport systems that adequately links 'green/brown' field sites (re-zoned) with the city (incentivize & lower cost of supply)
3 - Reconsider planning restrictions (1. Building height, 2. Room sizes, 3. 'Passivity') - (lower cost of supply)
4 - Vacant Site tax (increase cost of not-supply)
...
....
.....
......
999,999,999 - Give people some cash, won't help supply, will make houses more expensive, but sure looks like you're trying to help.

quadrifoglio verde

ted1 wrote: »

Houses can not be built at cost the FTB can afford. That's why there are so few starter homes being built, most are larger houses from 500k up.

If they remove the VAT factor then developers can build houses that would sell for 350 for a lower price that FTB can afford

I'd be looking at removing the ridiculous levies imposed on new builds. The provision of part V should not be the responsibility of first time buyers

listermint

ted1 wrote: »

Houses can not be built at cost the FTB can afford. That's why there are so few starter homes being built, most are larger houses from 500k up.

If they remove the VAT factor then developers can build houses that would sell for 350 for a lower price that FTB can afford

There needs to be creativity and certainly time sensitive 'breaks' put in place. But something that doesnt just allow Builders to swallow up the incentives whilst increasing the price.

Smart thinking and i dont think giving breaks to FTB is the way to go whatsoever. Its short term madness the likes id expect from FF. They can only see to the end of the road and not into the next street.

El_Dangeroso

http://www.independent.ie/irish-news/firsttime-buyers-to-get-generous-new-grant-34891797.html

File this one under 'History Repeats'.

So expect a 'generous' bump in house prices next year that strangely co-incides with this scheme.

I for one am going to try my hardest to buy before this goes in.

ted1

listermint wrote: »

But something that doesnt just allow Builders to swallow up the incentives whilst increasing the price.

.

Builders can not currently build homes for FTB as the land and build costs are too high.

Maybe a tax credit or similar not a grant.

Claw Hammer

Everything is being done by this government at the behest of the big corporations. What is proposed here is a straight forward subsidy to the big building companies, the site owning vulture funds and the banks. FTBs and anyone who buys a new house will pay a heavy price.

superman28

This is typical in Irish Politics,, instead of tackling the real problem trying to fudge it with ham fisted bumper giveaways,,

UsBus

El_Dangeroso wrote: »

http://www.independent.ie/irish-news/firsttime-buyers-to-get-generous-new-grant-34891797.html

File this one under 'History Repeats'.

So expect a 'generous' bump in house prices next year that strangely co-incides with this scheme.

I for one am going to try my hardest to buy before this goes in.

I'm sick of this crap. First time buyers getting preferential treatment. I sold a couple of times over the last 10 years not making profit just moving with the intention of buying in a different area. Now I'm renting & priced out completely. Now you either have to be a millionaire or a FTB......nothing for anyone in between. Why can't each person be assessed by their application..??

Pathetically predictable. Anything for the shortview towards getting a few votes in the impending election from amadáin who are incapable of seeing that when the state gives them money back to buy a house that means they, and every other house purchaser, have more money to buy a house. And what happens house prices? Well, when more money is chasing the same number of houses, house prices rise. At the end of the day this stunt is just the state handing money over to private house sellers. Infuriating. Major déjà vu with stamp duty removal and other similar pre-election stunts. The Central Bank is the sole organisation which has acted responsibly (to howls of outrage from the muppets who cannot get the above maths) via its deposit etc restrictions. Now, the problem is the lack of supply.

The real solution is the elephant in the room.

Back in the 1930s the much maligned Éamon de Valera and his government organised the building of over 100,000 homes (houses, in those days). Re-read that. This is very rarely if ever acknowledged in 2016 as it's a stunning reality from the depths of the 1930s depression and international instability that would expose the unwillingness of this state's political elite to solve this problem today. De Valera used public funds to take down the slums and build these homes. We have our governments - including those awfully repellent smoked salmon socialists in the last government - declaring they cannot use public funds to provide houses "because the EU doesn't allow it". Scapegoating the EU, just as once they scapegoated the Brits. And they absolutely love putting the onus on private developers, people motivated entirely by money, to do this building. They're so blinkered in their rightwing "put faith in the markets to sort everything out" ideology that they cannot even think creatively about a real solution.

The solution is entirely in the hands of this government. They are sitting on their hands as they watch their own property possessions in Dublin and elsewhere rise in value. Any sign of their long-promised vacant site levy on these land hoarders in Dublin? Nope. According to the 2016 Census there are now 198,000 vacant homes in the republic. Any sign of a vacant homes levy so that these people have a major financial incentive to dispose of their empty homes? The entire class of politicians as well as City and County Council officials are wholly unwilling to give anything but lip service and a few cosmetic changes to address this problem when everybody knows that a radical change à la De Valera in the 1930s is where the solution is.

dubrov

ted1 wrote: »

Builders can not currently build homes for FTB as the land and build costs are too high.

In a normal functioning competitive market, builders will only bid at levels that allow them to generate a profit. This sets the land price.

If land prices are truly still too high, it suggests land hording.
This can only work if very few people own a large proportion of the available land,

ted1

dubrov wrote: »

In a normal functioning competitive market, builders will only bid at levels that allow them to generate a profit. This sets the land price.

If land prices are truly still too high, it suggests land hording.
This can only work if very few people only a large proportion of the available land,

They can build higher prices units as is happening all over Dublin, they just can build low cost FTB houses.

So they can generate profits

notharrypotter

Where are the 198000 vacant houses?

Not where they are needed obviously.

Agree short term next election stroke in


Auction politics rules, everyone of us wants it all but rarely look as to how it will be funded.

cruizer101

BUILD MORE F**KING HOUSES, apologies for the caps but it is really starting to annoy me how much talk and effort is going into random proposals when there is only one solution to the current situation which is increased supply, this needs to be done through direct government building and policies which encourage it in the private sector (tax breaks for builders, tax on vacant site/properties, etc..) I really want to slap any politicians who talk about other nonsense policies re the housing situation. :mad: /rant

dubrov

There are plenty of threads on boards about self-builds of large detached houses for less than 200k.
Builders could easily build low cost FTB houses at a profit now if the land price was fair.

dubrov

dubrov wrote: »

There are plenty of threads on boards about self-builds of large detached houses for less than 200k.
Builders could easily build low cost FTB houses at a profit now if the land price was fair.

'Good Land' is currently scarce unfortunately (so the fair price is relatively high).

The Government does have the power to create more 'Good Land', thereby bringing the price down by linking sites to the city with good planned public transport links and re-zoning them.

Infrastructure development leads to great swathes of unconsidered sites becoming 'good land'.

We need to be proactive on this, and not require infrastructure shortages to prompt development.

notharrypotter

notharrypotter wrote: »

Where are the 198000 vacant houses?

Not where they are needed obviously.

According to this: 'Total vacant dwellings in Dublin, including holiday homes, numbered more than 36,000.' That's a massive number of empty homes in a place that's desperate for homes.

Villa05

Deleted User wrote:

The Government does have the power to create more 'Good Land', thereby bringing the price down by linking sites to the city with good planned public transport links and re-zoning them.

Tax development land that is not being developed. Simple solution

Villa05

Villa05 wrote: »

Tax development land that is not being developed. Simple solution

Deleted User wrote: »

Things that could be done to help Dublin's supply.

1 - Build some corporation houses (Very supply orientated)
2 - Build some public transport systems that adequately links 'green/brown' field sites (re-zoned) with the city (incentivize & lower cost of supply)
3 - Reconsider planning restrictions (1. Building height, 2. Room sizes, 3. 'Passivity') - (lower cost of supply)
4 - Vacant Site tax (increase cost of not-supply)
...
....
.....
......
999,999,999 - Give people some cash, won't help supply, will make houses more expensive, but sure looks like you're trying to help.

It is and it isn't.

As a standalone policy it would have almost no impact.

If someone really wants to hoard, they'll find ways (easily) to minimize the cost of doing so

Dec 2014 - http://www.independent.ie/irish-news/news/how-developers-can-dodge-vacant-site-tax-for-three-years-30800708.html
May 2015 - http://www.independent.ie/business/personal-finance/property-mortgages/developers-could-avoid-tax-over-vacant-sites-31265651.html
Dec 2015 - http://www.irishtimes.com/business/economy/call-for-land-tax-to-compel-developers-to-build-on-vacant-sites-1.2470403

It would have to be part of a broader package of moves to stimulate construction, much of which would have to include bringing down the cost of construction.

karenalot

Villa05 wrote: »

Tax development land that is not being developed. Simple solution

Im presuming it will be part of the vacant site levy coming into force in 2018?

TheDoc

Massive amount of "****it, I'll happily take it". I've far too long advocated for sense and logic when it comes to our economy and politics. When all those around me where getting 1005+ mortages and being financially wreckless I was sitting there smug thinking "I'm playing it safe here, I'm being responsible, it will pay off".

Before I moved out to rent first, me and partner got mortgage approval everywhere we went. I was getting approval on my own. Said we would go rent, keep the savings going.

Then everything happened. Over night our home ownership prospects were written off with a stroke of a pen. Our savings were decimated by the rapid rise in the private sector. Blah blah, etc. etc.

So when this comes in, I'm going to happily apply, take my phat freebie from the state and give a massive shrug of the shoulders. sure if things go pear shaped, I'll have loads of politicians and people supporting me and my family against those pesky bankers. Sure its not my fault I was being financially wreckless.

Pretty sick of being safe and responsible in this country when it comes to laws, ethics and finances. So ****it, when this comes, off to buy I go.

TheDoc

UsBus wrote: »

I'm sick of this crap. First time buyers getting preferential treatment. I sold a couple of times over the last 10 years not making profit just moving with the intention of buying in a different area. Now I'm renting & priced out completely. Now you either have to be a millionaire or a FTB......nothing for anyone in between. Why can't each person be assessed by their application..??

Don't worry about it. Just be wreckless like loads of others have. Sure you don't get turfed out, politicans, free masons, tinfoil hat warriors, facebook groups, protests, Ben Gilroy, all the boys will protect you from those horrible banks who are screwing over the little guy.

Nobody questions or cares for your financial wrecklessness. So take it while its there. Caution to the win, grab all the freebies. Call it your entitlement.

The good times are back baby!

TheDoc

As a renter, who had his families home ownership prospects wiped out overnight, I love it. Couldn't give two ****s about anyone else. Just me.

I thought I was playing it smart when being approved for mortages left right and center during the recession, but we went renting to save up a bit more. Then the market went crazy, our prospects got signed off overnight and our savings got decimated with the spiraling cost of rent.

All the while the world and its mother protect those who were financially wreckless during the boom, or even more recently. Politicians and just about every advocacy group under the sun will spin the "pesky bankers screwing that poor family" shtick.

So ****it. Will happily take a grant, buy my own family home, and if **** goes south, who cares. We seem to be totally accepting of financial wrecklessness in this country, so no doubt even more legislation will come in from this popularity monster we call a government to further protect those in distress mortgage debt.

Michael D Not Higgins

Threads merged

TheDoc

mariaalice wrote: »

Maybe a tax credit or similar not a grant.

Well it's a tax refund, so its being described.

And whats wrong with that? Tax man took a whopper chunk of my annual bonus(thats never guaranteed, and rewards really good and hard work). A chunk that would be welcomed to enable me meet the Central Banks requirements.

Considering the amount of tax I pay, and my family qualifying for absolutely NOTHING in terms of state benefit, I'll happily take a tax refund.

My entire outlook on economics and ethics has changed in the last two years from what I've gone through. And basically its a massive **** everyone else bar me, and I'll take anything I can get to help us make a good life for our kids.

TheDoc

TheDoc wrote: »

As a renter, who had his families home ownership prospects wiped out overnight, I love it. Couldn't give two ****s about anyone else. Just me.

I thought I was playing it smart when being approved for mortages left right and center during the recession, but we went renting to save up a bit more. Then the market went crazy, our prospects got signed off overnight and our savings got decimated with the spiraling cost of rent.

All the while the world and its mother protect those who were financially wreckless during the boom, or even more recently. Politicians and just about every advocacy group under the sun will spin the "pesky bankers screwing that poor family" shtick.

So ****it. Will happily take a grant, buy my own family home, and if **** goes south, who cares. We seem to be totally accepting of financial wrecklessness in this country, so no doubt even more legislation will come in from this popularity monster we call a government to further protect those in distress mortgage debt.

Well actually some of us are staring in disbelief at the exact same financially reckless policies being unearthed from their deserved grave and being presented to us as solutions for anything!

TheDoc

Deleted User wrote: »

Well actually some of us are staring in disbelief at the exact same financially reckless policies being unearthed from their deserved grave and being presented to us as solutions for anything!

Sorry I should have clarified, I meant personal finances.

I've heard puff pieces from newstalk, national papers, other radio stations, posts here, posts there, stories locally the works.

People being utterly wreckless in their planning, and essentially being stupid, and being given a free pass "cause its all the bankers fault". We have this really weird situation where we feel uncomfortable telling people "Well sorry, you done and ****ed up".

Believe me I've looked in disbelief at what most recent governments have done for solve various issues and been unable to fathom it. But I've just switched to a certain "****it" mantra, where I happily take the gifts they give. Giveaway budgets, giveaway elections. I know the greater ramifications and I know and understand the finer points about a lot of stuff.

But then you have people who vote in the Healy Raeys, or Mick Wallace, and you realise there is literally no ****ing point putting so much effort into it all, and that the entire system is broke. And now we have this absolute monstrosity of a government. So I'll happily take all the freebies and benefits and whatever comes my way before it all catches a blaze and crumbles.

bleary

I can't imagine there will be any provision for buyers of second hand property, it might actually depress the prices there for a while.

They will attempt to justify it for new builds , meeting environmental goals and increasing supply.

There was a strong incentive in the last boom to buy new, no stamp duty and FTB grant of £3000, this encouraged people to move to areas they wouldn't have considered before, hello portlaoise , I'm talking to you.

It's just stupid but developers have a gun to their head and sure what else could the government do? This way they give money to the builders but get congrats from grateful FTB and their mammies and daddies.

bleary

bleary wrote: »

I can't imagine there will be any provision for buyers of second hand property, it might actually depress the prices there for a while.

They will attempt to justify it for new builds , meeting environmental goals and increasing supply.

I agree but they seem to be floating VAT reductions on new-builds and incentives for first-time buyers (of any property), based on my reading of this morning's paper.

If that's the case it would distort things in that second/third/fourth-time buyers would have an incentive to buy new houses but FTBs would have an incentive to buy anything.

That might encourage FTBs to focus on the second-hand housing market where there are fewer trader-uppers.

Hard to know exactly what that would do to the market(s). Seems like unnecessary meddling to me

MarkAnthony

I'm sorry I know this is going to be unpopular but this is exactly whats needed.

Renters are getting absolutely screwed, because LLs are getting absolutely screwed on tax. AT LAST some of that money is going to be going back to renters. Of course it will increase house prices; brilliant! It should push my apartment to a point I'd part with it. Someone gets a grant to buy it and gets out of the rental trap, I get out of being a LL and pay a few K off my mortgage.

Of course more supply is needed. There are things that need to be done to assist that but this idea isn't the worth thing that could have happened by a long shot. Now it should be strictly controlled, and limited to certain areas but it's a step in the right direction!

Villa05

karenalot wrote:

Im presuming it will be part of the vacant site levy coming into force in 2018?

It should be enforce now but was pushed out by government after pressure from vested interests.

The problems exist now the tax should have been enforced well before now

Also many proposed a site value tax instead of the property tax as a far more beneficial tax in efficient use of land

Lorcan Sirr of DIT was interviewed by Cormac Ó hEadhra on RTÉ Radio 1's Drivetime in the past hour. He made two very interesting points: first, that this proposal is designed to circumvent Central Bank rules which, he argues, are for the long-term good of Irish society (as somebody who intends to buy in the foreseeable future I 100% agree with him).

Second, and more interesting, when Ó hEadhra asked him was the main problem a supply problem. He said it's about a 60/40 split between shortage of supply (c. 60% of the problem) and obsolete buildings/"managing that stock that we have" (c. 40% of the problem) that are no long in use as home. Sirr, in the inverview below, says "For every 100 houses we are building another 63 are becoming obsolete". I never thought that the latter figure would be anything as high as he says it is.

Have a listen to it all here: Lorcan Sirr (DIT) & Hubert Fitzpatrick (CIF)