Irish Property Market 2020 Part 3

Timing belt

schmittel wrote: »

Will they be paying 30% of the rental value of the property on top of their mortgage?

Can't see that going over well with the rent is dead money crowd.

Of course it will go down well as they will be building up equity on the 70% they own. Without it they will have 100% dead money.

FTB that are unable to get on the property ladder will welcome this while people that own property will have the attitude of I never had that opportunity so no one else should have it.

In will be interesting to see what the scheme covers
- what houses will qualify. Will it be any house or only new builds or even only homes in a housing scheme of affordable houses.
- Will there be a cap on the value of the property and will it be different in Dublin/outside Dublin.
- Will it be shared ownership with rent paid or will it be a Equity loan from the government like what was implement in the UK 2013.


The newspaper article said that it was adopted in the UK and didn't lead to house inflation so will be interesting to see how that was achieved or whether it is false claim.

The devil will be in the detail but without more affordable houses being built this will only lead to more people chasing a smaller and smaller supply of affordable houses.

Timing belt

Villa05 wrote: »

It might be timely for an Irish citizen to highlight the dangers of a overheating property market and an attempt by politicians to circumvent prudent lending policy

It's not circumventing any prudent lending policy it is giving people that are stuck renting an opportunity to own a property. lets wait for the actual details before we start forming an opinion.

The Central banking lending rules still apply to all non-first time buyers.

Villa05

Could it be set at an affordable price point, say 250k plus governments 30%

What would 325k build you in Dublin, Cork, Galway

There's no point in this scheme it results in building 100km from where it is needed

Zenify

if there's 100 properties for sale and 1000 potential buyers, why are we giving buyers more money?

rev2.0

Timing belt wrote: »

it is giving people that are stuck renting an opportunity to own a property.

And it is doing so by circumventing prudent lending policy This is just a way to get around the 90%/3.5 LTI rules for FTB's

Graham

It's potentially (no details released yet) taking the 90%/3.5 LTI and turning it to 70%/3.5 LTI.

hometruths

Hubertj wrote: »

Will be interesting to see what provisions are included around if a mortgagee holder falls into arrears. Repossession / sale of property will surely have to be included in the contract.

Big difference between including provisions in the contract and actually enforcing that contract. Just ask the banks.

Or Dublin City Council who are owed €33m in rental arrears from social housing tenants.

If both mortgage holders and government tenants are already treating the payments as optional with impunity, I cannot see why this arrangement will be any different.

Villa05

schmittel wrote:

Big difference between including provisions in the contract and actually enforcing that contract. Just ask the banks.

What obstacles are present that prevent money owed on accomodation from being deducted from state transfers to same persons or being deducted from wages where appropriate

Social housing is a benefit to the recipient, surely it is not difficult to make receipt of such benefit dependent on signing up to such conditions

Why do we always have to do things arse ways?

33million plus 17 staff, nuts

Bass Reeves

Villa05 wrote: »

What obstacles are present that prevent money owed on accomodation from being deducted from state transfers to same persons or being deducted from wages where appropriate

Social housing is a benefit to the recipient, surely it is not difficult to make receipt of such benefit dependent on signing up to such conditions

Why do we always have to do things arse ways?

33million plus 17 staff, nuts

In theory the state is like any other landlord and is not entitled to set conditions that are not available to other landlords. If a landlord is owed money he can evict but must go to the RTB for to get an eviction and a payment order. However to enforce the payment order he needs to go to court and get a garnisee order against wages or property owed by the tenant.

However the state as a housing supplier of last resort if it evicted tenants need to either rehouse or put them up in BnB. It a no win situation. The state could pass laws that where rents are unpaid on state privided housing that this could be deducted from state payments or tax allowances. However this takes political will. Can you imagine the fuss parties on the left would make if such law was proposed.

I was listening to the radio of the prolateriat (RTE( they were talking about housing and what ever presenter suggested we needed an obligation put in the constitution that housing was a right. It's interesting that there is no talk about an obligation on tenants to pay or maintain such housing. Obligations are double side IMO. When you leave ok at state provided housing and it condition after 25 years a good portion is in poor condition due to acts by tenants.

Hubertj

Villa05 wrote: »

What obstacles are present that prevent money owed on accomodation from being deducted from state transfers to same persons or being deducted from wages where appropriate

Social housing is a benefit to the recipient, surely it is not difficult to make receipt of such benefit dependent on signing up to such conditions

Why do we always have to do things arse ways?

33million plus 17 staff, nuts

Populism is the obstacle

hometruths

Bass Reeves wrote: »

In theory the state is like any other landlord and is not entitled to set conditions that are not available to other landlords. If a landlord is owed money he can evict but must go to the RTB for to get an eviction and a payment order. However to enforce the payment order he needs to go to court and get a garnisee order against wages or property owed by the tenant.

However the state as a housing supplier of last resort if it evicted tenants need to either rehouse or put them up in BnB. It a no win situation. The state could pass laws that where rents are unpaid on state privided housing that this could be deducted from state payments or tax allowances. However this takes political will. Can you imagine the fuss parties on the left would make if such law was proposed.

This is an interesting point in the context of this new scheme - it is not a last resort supply of housing, The people it is assisting can afford to provide housing for themselves, they just cannot afford to purchase that housing.

So if these people build up arrears on a state rental agreement for the equity, the argument that the government would have to house them anyway does not apply.

But it would be equally politically unpalatable to evict them for non payment, and thus never going to happen.

Idbatterim

Their solutions are to increase the value of the decision makers largest asset , what a surprise!

Timing belt

According to the Journal it will be an Equity Loan from the Government and will only be available for new builds up to a certain limit.

They make reference to saving 11k a year which would mean a saving of 916 a month. Which would indicate that the limit on a property would be around 375k.

It also make reference to 75m funding for this so that would mean that the scheme would be for about 1,000 new houses.

https://www.thejournal.ie/affordable-housing-4-5305251-Dec2020/

Villa05

Notable that similar schemes were introduced very close to the eventual collapse of the property market last time.

Govt making sure that the taxpayer is all in for the losses when the arrive

Is it a shoe shine boy moment

Hubertj

Villa05 wrote: »

Notable that similar schemes were introduced very close to the eventual collapse of the property market last time.

Govt making sure that the taxpayer is all in for the losses when the arrive

Is it a shoe shine boy moment

What schemes were they?

beauf

Lack of homes for sale

https://extra.ie/2020/12/19/news/irish-news/homes-for-sale-prices-leap

... ‘The underlying issue remains: a chronic and worsening under-supply of new homes, in a country with strong need for housing over the coming decades.

‘The housing market is a market and the laws of supply and demand are descriptors of what is going on.

Wanderer78

beauf wrote:

Lack of homes for sale

The so called laws of economics are not actually laws, they've never been proven compared to their scientific counterparts, particularly at the macro level

Ursabear

How would the affordable housing scheme affect the fair deal scheme in the future?

beauf

Wanderer78 wrote: »

The so called laws of economics are not actually laws, they've never been proven compared to their scientific counterparts, particularly at the macro level

Which means what exactly?

beauf

Ursabear wrote: »

How would the affordable housing scheme affect the fair deal scheme in the future?

There's been talk of the fair deal scheme being over subscribed, and not sustainable in it's current form. I expect by the time one effects the other, both will have been replaced with other schemes.

Cyrus

beauf wrote: »

Which means what exactly?

Neoclassical something or other

Wanderer78

Cyrus wrote:

Neoclassical something or other

beauf wrote:

Which means what exactly?

Exactly, it's nonsense, nothing to do with reality

rev2.0

https://www.thejournal.ie/affordable-housing-4-5305251-Dec2020/

The minister says the scheme will boost housing supply as it helps to guarantee sales by bridging the gap between the Central Bank rules and the actual cost of a home for ordinary income families.

The minister openly admitting it is to get around CB rules.

Whilst it will be great to have more FTB’s buying homes, I don’t believe this is the way to go about it. Will be very interesting to see the fine print

beauf

Wanderer78 wrote: »

Exactly, it's nonsense, nothing to do with reality

What specifically has nothing to do with reality. Do you mean supply and demand and/or just those daft reports. Not that it matters I'm just curious.

hometruths

Do we have any idea of the current demand for FTBs buying at this level? Has anybody seen an estimate/measurement?

i.e out of all the housing need projections of 30,000 plus units a year how many are FTBs buying sub 400k new builds?

Mic 1972

beauf wrote: »

Lack of homes for sale

https://extra.ie/2020/12/19/news/irish-news/homes-for-sale-prices-leap

More evidence that prices went up in 2020

Timing belt

schmittel wrote: »

Do we have any idea of the current demand for FTBs buying at this level? Has anybody seen an estimate/measurement?

i.e out of all the housing need projections of 30,000 plus units a year how many are FTBs buying sub 400k new builds?

Don’t think that data exists unless you look at the survey of renters that want to buy. I think it was 8 out of 10 and the main reason for not buying was they were locked out due to price.

If the median salary is 56k and a couple on a combined salary 100k and a 10% deposit could only afford a 395k property it would suggest that that there would be quite a lot of demand

hometruths

Timing belt wrote: »

Don’t think that data exists unless you look at the survey of renters that want to buy. I think it was 8 out of 10 and the main reason for not buying was they were locked out due to price.

If the median salary is 56k and a couple on a combined salary 100k and a 10% deposit could only afford a 395k property it would suggest that that there would be quite a lot of demand

I’d agree that a lot of the 30k projected need is ftbers who would fit the bill for this scheme. Minister has said there will be no arbitrary salary cap determining eligibility which suggests it’s not means tested.

Say it is 2/3 - that’s 20,000 a year. The government has ringfenced 75m for the scheme initially, which covers 1000 mortgages.

How are they going to decide who gets the 1000? Either the govt accepts there will be a hell of a fuss from those who are eligible but do not receive it, or they try and find €1.5bn to fund it for all.

And where will they find €1.5bn without kicking up a hell of a fuss elsewhere? Talk of private investment is hopelessly optimistic.

cnocbui

Mic 1972 wrote: »

More evidence that prices went up in 2020

I earlier posted links showing increased prices in the UK, NZ and a projected 7% rise in Australia within 12 months, but it was mostly ignored. In the US, house prices for average homes have been rising at roughly 1% per month.

People who think Ireland should, or will, be different, are indulging in wishful thinking.

Timing belt

schmittel wrote: »

I’d agree that a lot of the 30k projected need is ftbers who would fit the bill for this scheme. Minister has said there will be no arbitrary salary cap determining eligibility which suggests it’s not means tested.

Say it is 2/3 - that’s 20,000 a year. The government has ringfenced 75m for the scheme initially, which covers 1000 mortgages.

How are they going to decide who gets the 1000? Either the govt accepts there will be a hell of a fuss from those who are eligible but do not receive it, or they try and find €1.5bn to fund it for all.

And where will they find €1.5bn without kicking up a hell of a fuss elsewhere? Talk of private investment is hopelessly optimistic.

They will need to have a regional house price cap as 400k would be way to high outside Dublin.

It's a good thing that it is not means tested as a it becomes an option for Divorced separated people who although may be on a good wage are locked out of the housing market and force to rent.

I have a feeling that the scheme will not be available to all new builds and will be only available to certain new builds like in the UK and it will be on a first come first served basis. Without knowing the in's and out's it is near impossible to fully understand the impact as if this is only available to certain builds of affordable homes then it is more or less social housing in another form.

If it is done on a large scale then this will really impact the rental market and may open up some of this housing stock to owners as rents drop and investors pull out.