2021 Irish Property Market chat - *mod warnings post 1*

Hubertj

Villa05 wrote: »

A simple no cost solution to affordabilty

Sends a signal to land speculators/hoarders as well.
A city's wealth is derived from its people not property. Policy should reflect that.

Taxpayers funds provide much of the infrastructure that allows cities to function, yet private funds can hold the taxpayer to ransom for affordable housing while they are the greatest beneficiary of taxpayer funded infrastructure

Organised theft

Yes further regulation and meddling in the market will fix things.

Villa05

Interested Observer wrote:

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

Money printing perhaps the cause, which Germans would be strongly against
Notable also that Germany opened up to the refugee crisis a number of years ago

The principle of the measures remain, keep land prices in check and it will be far easier to keep housing affordable

Hubertj

Villa05 wrote: »

The senior public servant that repeatedly and strongly advised against the shared ownership scheme appears to be moving to the department of health


Just saying!

Clearly this is part of the conspiracy. Move him and give him a pay rise to keep him quiet. All in the public eye. Scandalous

PropQueries

Interested Observer wrote: »

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

Nothing to do with Berlin privatising their social housing?

"Since 1991, Berlin has sold over 200,000 public homes. Most have since fallen into the hands of a few major corporate giants like Deutsche Wohnen, which alone owns around 110,000 units in the city."

People there should genuinely ask where all this money from the privatisation went. I've been to Berlin and it obviously didn't go into the city's infrastructure IMO

The common thread here appears to be that selling all the taxpayers assets to a few big investors to keep funding pay rises and pensions for a city's civil service isn't a good idea. If they sold them to the occupants at the time at least the city would have benefited somewhat IMO

Which begs the questions. The government and media here have been pushing the German model of housing for the past several years. It seems noone spotted what they really meant was privatisation of social housing to a few big investors and at significant long-term cost to the taxpayer. Looks like we were really sold a pup by both the state and Irish media IMO

Link to article here: https://citymonitor.ai/housing/affordable-housing/berliners-want-to-expropriate-250000-homes-heres-what-stands-in-their-way

Timing belt

Interested Observer wrote: »

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

Another article on the topic with no pay wall
"Some things in Berlin are grimly familiar – an acute housing shortage and a political system failing to resolve it. Berlin, like Dublin and the rest of Ireland, also has a strikingly low population density. "

https://www.thejournal.ie/readme/anmeldung-5194958-Sep2020/

hometruths

Interested Observer wrote: »

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

An unintended consequence of the rent controls has been an increase in supply for sale:

In September, the number of Berlin homes for sale was up 13% from the year before, and the increase for those built before 2014 was 23%, ImmoScout reports. Traditionally, Berlin has been a city of tenants, with more than 80% of the population renting. If the trend of buying homes continues, that number will shift toward the national average of about half.

Seems preferable to an increase in the number of vacant properties.

Hubertj

schmittel wrote: »

An unintended consequence of the rent controls has been an increase in supply for sale:



Seems preferable to an increase in the number of vacant properties.

I would be more concerned with medium term consequences. Will regulation lead to a decrease in construction leading to shortages down the line, then back to square 1..?

hometruths

Timing belt wrote: »

Another article on the topic with no pay wall
"Some things in Berlin are grimly familiar – an acute housing shortage and a political system failing to resolve it. Berlin, like Dublin and the rest of Ireland, also has a strikingly low population density. "

https://www.thejournal.ie/readme/anmeldung-5194958-Sep2020/

Grimly familiar indeed:

This is a war between settled Berliners and the young people from near and far who want to establish themselves.

Since the former by definition outnumber the latter at the ballot box, there is no motivation for politicians to reverse course. So, the more this damages Berlin’s economy, the more entrenched it becomes.

hometruths

Hubertj wrote: »

I would be more concerned with medium term consequences. Will regulation lead to a decrease in construction leading to shortages down the line, then back to square 1..?

For sure but the article suggests that the government to have an eye on the medium term:

City officials say the freeze was intended to give renters “breathing room” while Berlin seeks to increase construction to at least 20,000 new homes annually, more than four times the level in 2010. That goal is now in sight as developers in the city last year built 18,999 new homes.

I suspect the government would build the units themselves if they felt the need for it.

Point being they are OK with saying we need some short term pain here to fix longer term problems. Even acknowledging that seems to be better than the situation we're in.

MacronvFrugals

Isnt the fact that investors are running desperately to property for yields a symptom of a wider problem?

The 0% QE taps have made housing markets the world over miserable places, parasitic is a word that fits quite well...

JimmyVik

What we need are 6 - 8% interest rate again.
This low interest mortgage environment is the main reason for house prices being so high if you ask me.

Hubertj

schmittel wrote: »

For sure but the article suggests that the government to have an eye on the medium term:



I suspect the government would build the units themselves if they felt the need for it.

Point being they are OK with saying we need some short term pain here to fix longer term problems. Even acknowledging that seems to be better than the situation we're in.

Strategic thinking by public servants. Who’d a thunk it? I presume they are accountable for their actions (or lack of)...

hometruths

Hubertj wrote: »

Strategic thinking by public servants. Who’d a thunk it? I presume they are accountable for their actions (or lack of)...

Not as accountable as they used to be! (by their superiors)

Timing belt

JimmyVik wrote: »

What we need are 6 - 8% interest rate again.
This low interest mortgage environment is the main reason for house prices being so high if you ask me.

Rates have been falling for 30-40 years so even if they bring rates back to 0% it will crash the stock market, houses prices, companies with debt, governments with debt.... it wouldn't even be a car crash it would be a pile up on the motorway.

JimmyVik

Timing belt wrote: »

Rates have been falling for 30-40 years so even if they bring rates back to 0% it will crash the stock market, houses prices, companies with debt, governments with debt.... it wouldn't even be a car crash it would be a pile up on the motorway.

Credit for house buying is too cheap.

MacronvFrugals

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

I'm assuming mountains of empty properties and hundreds of thousands still in negative equity?

If so it was truly a Faustian bargain!

Timing belt

JimmyVik wrote: »

Credit for house buying is too cheap.

I agree but they can't change it without crashing everything.

Timing belt

MacronvFrugals wrote: »

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

I'm assuming mountains of empty properties and hundreds of thousands still in negative equity?

Banks would have failed ECB stress tests and would have needed another bailout which would have been more tax rises and expenditure cuts. By offloading the debt to investors they got them to bailout the banks but at a cost.

MacronvFrugals

Timing belt wrote: »

Banks would have failed ECB stress tests and would have needed another bailout which would have been more tax rises and expenditure cuts. By offloading the debt to investors they got them to bailout the banks but at a cost.

Thanks Timing,

This combined with Draghi's "Whatever it takes" really did cause a free for all, does anyone else ever get the feeling we(EU) never truly recovered from 2008-2010?

PropQueries

Timing belt wrote: »

Rates have been falling for 30-40 years so even if they bring rates back to 0% it will crash the stock market, houses prices, companies with debt, governments with debt.... it wouldn't even be a car crash it would be a pile up on the motorway.

But isn't that how the west advanced over the past few hundred years i.e. creative destruction.

We now know that the central banks can print cash so maybe it's time to raise interest rates to 5% (inflation or no inflation) and get us back on track.

Let these zombie companies go bust. The central banks can then print money for a guaranteed income for all e.g. €200 per week. Enough to live miserably on, but enough to live but not enough to satisfy 95% of the population. This will get the west back on track again IMO.

hometruths

MacronvFrugals wrote: »

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

I'm assuming mountains of empty properties and hundreds of thousands still in negative equity?

The idea that thousands of people needed to be rescued from negative equity/falling house prices is why we're in the mess we have today.

The best two cures for negative equity are give it time to recover, or if that is not an option, take the hit asap. Instead we tried to speed up the recovery time and tried to ensure that nobody had to take the pain.

If FG/Lab had pursued policies that accepted negative equity as unfortunate but necessary fall out of a housing boom and bust both the housing market and their own political capital would be in better shape now.

Timing belt

MacronvFrugals wrote: »

Thanks Timing,

This combined with Draghi's "Whatever it takes" really did cause a free for all, does anyone else ever get the feeling we(EU) never truly recovered from 2008-2010?

It depends on what you define as recovered. Has the financial condition of the banks and insurance companies in Europe improved so it less likely that they go bust... yes because QE enabled them to rebuild their balance sheets cheaply.

Has it improved for the no the normal consumer... not really.. interest rates are lower and the banks have cash to lend but they can't find customers to lend to because they either already have to much debt or are outside the banks risks appetite. All this while asset prices rise making everything more unaffordable.

Villa05

Hubertj wrote:

Clearly this is part of the conspiracy. Move him and give him a pay rise to keep him quiet. All in the public eye. Scandalous

Sometimes your posts are as useful as an ashtray on a motorbike

Timing belt

schmittel wrote: »

The idea that thousands of people needed to be rescued from negative equity/falling house prices is why we're in the mess we have today.

The best two cures for negative equity are give it time to recover, or if that is not an option, take the hit asap. Instead we tried to speed up the recovery time and tried to ensure that nobody had to take the pain.

If FG/Lab had pursued policies that accepted negative equity as unfortunate but necessary fall out of a housing boom and bust both the housing market and their own political capital would be in better shape now.

I agree with you on this, just look at USA and how they did it...but you need to remember that if they took the 'hit asap' in Ireland it would have had a major impact on the banks which at the point in time were owned by the government. If someone in negative equity walks away it is the bank that is left holding the loss which means the government underwriting the debt at a time when they had the IMF on their backs.

MacronvFrugals

Dublin City Council is told to be ‘very careful’ when rezoning industrial land for housing

The council has surveyed the potential of underused industrial estates to provide land for housing. As part of the review of all low-intensity industrial areas, a number of industrial sites have already been rezoned for more intensive residential developments.

https://www.businesspost.ie/houses/dublin-city-council-is-told-to-be-very-careful-when-rezoning-industrial-land-for-housing-e5690d67

Timing belt

PropQueries wrote: »

But isn't that how the west advanced over the past few hundred years i.e. creative destruction.

We now know that the central banks can print cash so maybe it's time to raise interest rates to 5% (inflation or no inflation) and get us back on track.

Let these zombie companies go bust. The central banks can then print money for a guaranteed income for all e.g. €200 per week. Enough to live miserably on, but enough to live but not enough to satisfy 95% of the population. This will get the west back on track again IMO.

More than just Zombie companies would go bust.... you are taking about total sectors of the economy going bust and massive wealth destruction.

hometruths

Timing belt wrote: »

I agree with you on this, just look at USA and how they did it...but you need to remember that if they took the 'hit asap' in Ireland it would have had a major impact on the banks which at the point in time were owned by the government. If someone in negative equity walks away it is the bank that is left holding the loss which means the government underwriting the debt at a time when they had the IMF on their backs.

You also need to remember that the losses at the banks/government level were realised anyway when they sold loan portfolios for cents in the euro.

What the government did was realise the losses by selling the loans, and then create an environment where the security for those loans could not be enforced, resulting in a decade of grossly misallocated capital.

If that capital had been reinvested and allocated efficiently we'd all be much better off.

PropQueries

MacronvFrugals wrote: »

Dublin City Council is told to be ‘very careful’ when rezoning industrial land for housing




https://www.businesspost.ie/houses/dublin-city-council-is-told-to-be-very-careful-when-rezoning-industrial-land-for-housing-e5690d67

Did they give a reason on why they should be careful? If solving the supposed housing shortage really is their primary concern and they've already signaled they intend to use our public parks for housing, what do they really have to lose at this stage?

MacronvFrugals

schmittel wrote: »

The idea that thousands of people needed to be rescued from negative equity/falling house prices is why we're in the mess we have today.

The best two cures for negative equity are give it time to recover, or if that is not an option, take the hit asap. Instead we tried to speed up the recovery time and tried to ensure that nobody had to take the pain.

If FG/Lab had pursued policies that accepted negative equity as unfortunate but necessary fall out of a housing boom and bust both the housing market and their own political capital would be in better shape now.

The people (mostly young) that took the pain will deliver SF a majority very soon unless FF/FG sort housing out.

I'm early/mid 20s and there is a very odd wave of discontent among this age group its difficult to quantify

Cyrus

MacronvFrugals wrote: »

The people (mostly young) that took the pain will deliver SF a majority very soon unless FF/FG sort housing out.

I'm early/mid 20s and there is a very odd wave of discontent among this age group its difficult to quantify

the people in early to mid 20s didnt take the pain though.