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

cnocbui

Hubertj wrote: »

I believe SF are proposing to freeze rents for a number of years. I wonder what impact that might have

A court case on on the constitutionality of the measure?

In Blake v. The Attorney General [1982] I.R. 117 the Supreme Court held (inter alia) that Part 2 of the Rent Restrictions Act, 1960, which restricted the amounts of the rents payable to their landlords by tenants of controlled dwellings, was invalid having regard to the provisions of the Constitution of Ireland,

http://www.supremecourt.ie/supremecourt/sclibrary3.nsf/(WebFiles)/7FC625DAD10A956C802575F3002D6B7E/$FILE/Housing_%5B1983%5D%20IR%20181.htm

hometruths

Hubertj wrote: »

Talk is cheap

My view on the change that will come with SF is not based on what they are talking about, it is more a fundamental change in attitude.

The attitude of FF and FG is (understandably from a political context) to protect and enhance their base - which is largely homeowners. So their policies are designed to get as many people as possible into homeownership, whilst simultaneously protecting prices for the benefit of their existing votes.

It is clear from polls, that if SF get into power it will be on the back of the younger non homeowning demographic, and SFs base will have expanded beyond left wing republican terrorists.

It is a pretty safe assumption that they will do exactly the same as previous governments, and govern first and foremost with the benefit of their base in mind.

Best way to do this is very clearly to solve affordability problems by pursuing policies that drive down prices, the exact opposite of what the current lot are doing.

This will be harmful to majority of FG/FF voters but on balance SF will care very little about that.

ExMachina1000

https://www.independent.ie/business/irish/irish-prosperity-overstated-by-eu-rankings-says-former-central-bank-governor-honohan-40051912.html

Former governor of the central bank tells how Ireland isnt as rich as we seem to think we are. Bang on average in the EU.

Housing market here must surely be way overvalued

"That result places Ireland at 12th – below the UK and all six of the founding members of the European Economic Community, as well as Austria and the three Nordic member states"

cnocbui

Better increase taxes then.

Marius34

schmittel wrote: »

My view on the change that will come with SF is not based on what they are talking about, it is more a fundamental change in attitude.

The attitude of FF and FG is (understandably from a political context) to protect and enhance their base - which is largely homeowners. So their policies are designed to get as many people as possible into homeownership, whilst simultaneously protecting prices for the benefit of their existing votes.

It is clear from polls, that if SF get into power it will be on the back of the younger non homeowning demographic, and SFs base will have expanded beyond left wing republican terrorists.

It is a pretty safe assumption that they will do exactly the same as previous governments, and govern first and foremost with the benefit of their base in mind.

Best way to do this is very clearly to solve affordability problems by pursuing policies that drive down prices, the exact opposite of what the current lot are doing.

This will be harmful to majority of FG/FF voters but on balance SF will care very little about that.

Europe has wide range of different political parties, any country managed to push sale price down and solve affordability problem?

PropQueries

Marius34 wrote: »

Europe has wide range of different political parties, any country managed to push sale price down and solve affordability problem?

I believe the answer may be in an ECB survey that was reported on RTE a few weeks ago:

"Euro zone citizens are mostly unhappy about the European Central Bank's cheap money policy, lamenting the low returns on their savings, inflated housing prices and growing inequality, an ECB survey shows."

Basically, many EU countries invited the funds in after the last bust to buy the assets from their bust banks. Berlin is a prime example, even though that was primarily a political decision prior to the bust. It's now controlled by a few funds with one fund alone owning c. 120,000 apartments. Throw in the AirBnB phenomenon and it was obviously going to create artificial demand/supply issues.

But from new regulations on AirBnB to a public now actively against the low interest rate policy in which they see very little benefit, the political thinking has changed IMO and this artificial demand is being removed one by one IMO.

Just like when the americans broke up the oil companies and AT&T many years ago, I believe a similar development will happen in the EU.

And you must remember, if property prices are indeed based upon and fully priced to reflect the current low interest rate environment and interest rates can't go much lower (I think ), that would mean property prices can only move in one direction going forward, based upon interest rate movements alone IMO

Link to RTE article here: https://www.rte.ie/news/business/2021/0209/1195965-ecb-survey-on-interest-rates/

cnocbui

You could have just said no.

Villa05

Hubertj wrote:

The problem is see is the state needs housing immediately. They state is unable to build housing short term to meet that need (irrespective of any current restrictions). The state needs years to build the amount of affordable and social housing it requires. What alternative options does it have short term? Do nothing? So the state has to purchase or lease propoerty in the market. Where else can it purchase?

The state has already had 7 years since the first warnings of issues
In that time the state was the largest owner of property and land in the Western world
Yes times were difficult financially early on, but that changed through the years,
We could have leased a portion of that property from nama at a fraction of what is being paid to the vulture funds that purchased them

Entering long term leases with these same funds would imply that the present government has no intention of resolving the issue using a value for money approach
It then follows that those that purchase or rent their own accomodation have to pay more tax to compensate for government incompetence, inaction and outright market interference that drives up prices

Continuation of such policies will lead to state bankruptcy

The state has had opportunity after opportunity to fix this including now through the availability of land, labour and 0 cost capital. They have chosen to make the problem worse for buyers, sellers, local landlords, homeless and those that can't afford prices and rents

It is incredible that a government would willingly impose this on its citizens in a democracy

Villa05

cnocbui wrote:

A court case on on the constitutionality of the measure?

It seems odd that in 1982 the state would go to court on this and in 2021 would be largely responsible for high rents
1980's may not be too far away from repeating itself in so many contexts

schmittel wrote:

The attitude of FF and FG is (understandably from a political context) to protect and enhance their base - which is largely homeowners. So their policies are designed to get as many people as possible into homeownership, whilst simultaneously protecting prices for the benefit of their existing votes.

Best way to do this is very clearly to solve affordability problems by pursuing policies that drive down prices, the exact opposite of what the current lot are doing.

This will be harmful to majority of FG/FF voters but on balance SF will care very little about that.

Is it harmful though, those voters have sons and daughters affected by this. Their voters will also have to pay higher taxes to fund it.
Would an affodable resolution gain more votes than they loose.

Is policy more tied to the political party financiers wants moreso than their voters.

If I remember correctly apartments were always cheaper than houses in the late 90's, noughties. How come they are considerably more expensive now. What changed?

PropQueries

Villa05 wrote: »

The state has already had 7 years since the first warnings of issues
In that time the state was the largest owner of property and land in the Western world
Yes times were difficult financially early on, but that changed through the years,
We could have leased a portion of that property from nama at a fraction of what is being paid to the vulture funds that purchased them

Entering long term leases with these same funds would imply that the present government has no intention of resolving the issue using a value for money approach
It then follows that those that purchase or rent their own accomodation have to pay more tax to compensate for government incompetence, inaction and outright market interference that drives up prices

Continuation of such policies will lead to state bankruptcy

The state has had opportunity after opportunity to fix this including now through the availability of land, labour and 0 cost capital. They have chosen to make the problem worse for buyers, sellers, local landlords, homeless and those that can't afford prices and rents

It is incredible that a government would willingly impose this on its citizens in a democracy

Back in 2014, David McWilliams asked who will the funds sell the assets they bought (“for 25 cent in the euro.”) to when they decide to exit. His opinion was:

“They will sell to Irish investors. Where will the Irish get the cash? Why they’ll borrow it from Irish banks and we will be back to where we started with Irish banks overleveraged to expensive Irish property.”

He got it wrong. They’re not selling to Irish investors. It appears they’re selling/leasing them back to the Irish state. The very same state they bought them off of for c. 25c in the euro only a few years ago.

At least NAMA may make a “profit” at least. I wonder what history will make of that 2012 to 2016 period?

Link to his article here: http://www.davidmcwilliams.ie/when-the-vulture-funds-move-on-our-broken-banks-will-be-right-back-where-they-started/

Hubertj

Villa05 wrote: »

It seems odd that in 1982 the state would go to court on this and in 2021 would be largely responsible for high rents
1980's may not be too far away from repeating itself in so many contexts



Is it harmful though, those voters have sons and daughters affected by this. Their voters will also have to pay higher taxes to fund it.
Would an affodable resolution gain more votes than they loose.

Is policy more tied to the political party financiers wants moreso than their voters.

If I remember correctly apartments were always cheaper than houses in the late 90's, noughties. How come they are considerably more expensive now. What changed?

It would be stupid to think SF would resolve housing issues. Look at their wider “economic” policies and drive for a “united ireland”. The costs of that will dwarf housing, deter FDI, inhibit growth of domestic enterprises and drive companies from this country. Have you considered the impact of SF proposed taxation policies? I doubt it. Not to mention the greater societal impact of chasing a “united ireland”.
You’re so blinkered in your view you can’t see the bigger picture.
What I also find interesting is that SF support has plateaued even when the government is making such a balls on everything in this country. Kind of tell you something doesn’t it?
Government is responsible for the current mess, that is obvious. Question is how to address it in short term. They can’t do nothing.

hometruths

Marius34 wrote: »

Europe has wide range of different political parties, any country managed to push sale price down and solve affordability problem?

I don't know as am not overly familiar with the housing policies of other countries.

But the comparison is only relevant if other countries have had governments who tried solve the affordability problem with measures that they were advised would push up prices.

Are there any other countries who do this or is Ireland an outlier here as in so much else?

Villa05

Hubertj wrote:

You’re so blinkered in your view you can’t see the bigger picture. What I also find interesting is that SF support has plateaued even when the government is making such a balls on everything in this country. Kind of tell you something doesn’t it? Government is responsible for the current mess, that is obvious. Question is how to address it in short term. They can’t do nothing.

For clarity I don't have any links to and have never voted SF and share the concerns raised in your post

What were SF polling prior to the last election when they were excluded from some of the debates as rte believed they were a minority party.

I believe the policies of the current parties will bankrupt us and stupidity is often defined as trying the same thing and expecting different results.

Again entering long term leases shows the will is not there to resolve it and we continue to make it worse for everyone

Cyrus

ExMachina1000 wrote: »

https://www.independent.ie/business/irish/irish-prosperity-overstated-by-eu-rankings-says-former-central-bank-governor-honohan-40051912.html

Former governor of the central bank tells how Ireland isnt as rich as we seem to think we are. Bang on average in the EU.

Housing market here must surely be way overvalued

"That result places Ireland at 12th – below the UK and all six of the founding members of the European Economic Community, as well as Austria and the three Nordic member states"

Can you expand your hypothesis, how does this mean houses are overvalued ? Something is only worth what someone will pay for it after all.

thefridge2006

Villa05 wrote: »

The state has already had 7 years since the first warnings of issues
In that time the state was the largest owner of property and land in the Western world
Yes times were difficult financially early on, but that changed through the years,
We could have leased a portion of that property from nama at a fraction of what is being paid to the vulture funds that purchased them

Entering long term leases with these same funds would imply that the present government has no intention of resolving the issue using a value for money approach
It then follows that those that purchase or rent their own accomodation have to pay more tax to compensate for government incompetence, inaction and outright market interference that drives up prices

Continuation of such policies will lead to state bankruptcy

The state has had opportunity after opportunity to fix this including now through the availability of land, labour and 0 cost capital. They have chosen to make the problem worse for buyers, sellers, local landlords, homeless and those that can't afford prices and rents

It is incredible that a government would willingly impose this on its citizens in a democracy

It's farcical. I suspect someone or some group are being well looked after and its not the general public. its so bad that it doesn't make sense on any level you look at it from

thefridge2006

PropQueries wrote: »

Back in 2014, David McWilliams asked who will the funds sell the assets they bought (“for 25 cent in the euro.”) to when they decide to exit. His opinion was:

“They will sell to Irish investors. Where will the Irish get the cash? Why they’ll borrow it from Irish banks and we will be back to where we started with Irish banks overleveraged to expensive Irish property.”

He got it wrong. They’re not selling to Irish investors. It appears they’re selling/leasing them back to the Irish state. The very same state they bought them off of for c. 25c in the euro only a few years ago.

At least NAMA may make a “profit” at least. I wonder what history will make of that 2012 to 2016 period?

Link to his article here: http://www.davidmcwilliams.ie/when-the-vulture-funds-move-on-our-broken-banks-will-be-right-back-where-they-started/

It's a great little country for the right people, in the right circles

Marius34

schmittel wrote: »

I don't know as am not overly familiar with the housing policies of other countries.

But the comparison is only relevant if other countries have had governments who tried solve the affordability problem with measures that they were advised would push up prices.

Are there any other countries who do this or is Ireland an outlier here as in so much else?

All countries has it's own problems, and opposition has their magic medicine to improve quality of life, and affordability. Ireland politics is not unique in this. You may look for the differences, but result will be same. Capitals and other premium locations will have property affordability problem.
SF may come, may look for different solutions, affordability problem will stay.

cnocbui

PropQueries wrote: »

Back in 2014, David McWilliams asked who will the funds sell the assets they bought (“for 25 cent in the euro.”) to when they decide to exit. His opinion was:

“They will sell to Irish investors. Where will the Irish get the cash? Why they’ll borrow it from Irish banks and we will be back to where we started with Irish banks overleveraged to expensive Irish property.”

He got it wrong. They’re not selling to Irish investors. It appears they’re selling/leasing them back to the Irish state. The very same state they bought them off of for c. 25c in the euro only a few years ago.

At least NAMA may make a “profit” at least. I wonder what history will make of that 2012 to 2016 period?

Link to his article here: http://www.davidmcwilliams.ie/when-the-vulture-funds-move-on-our-broken-banks-will-be-right-back-where-they-started/

More simplistic drivel. Banks are barely lending and the number of hoops people are having to jump through to get loans and mortgages are considerable, so your supposition is wrong. There is no reckless and profligate lending going on.

PropQueries

cnocbui wrote: »

More simplistic drivel. Banks are barely lending and the number of hoops people are having to jump through to get loans and mortgages are considerable, so your supposition is wrong. There is no reckless and profligate lending going on.

Maybe read my post again

cnocbui

PropQueries wrote: »

Maybe read my post again

Fair do's, I mistook McWilliams position for yours.:o

Timing belt

If SF had solutions why are they not making a difference at local authority level. Why are they adding to the problem by objecting to anything that a different political party puts forward...at the end of the day all the political parties are playing games to try and get votes and anyone that thinks that things will change overnight at a GE is deluded. If SF get elected housing will not be their no1 priority...it’s no1 priority will to get rid of special criminal courts followed by a United Ireland and then re-writing the tax laws to make the rich pay. (Just for clarity that is anyone above the average industrial wage)....maybe then they will look at housing which takes time to resolve if it is a sustainable solution.

mcsean2163

combat14 wrote: »

scrap HAP and let people emigrate again if they cant afford the nose bleed rents here

? Scrapping rpz would cause rents to fall as landlords would be happy to rent at a lower rate as they could then higher rents if the economy recovered.

Villa05

thefridge2006 wrote:

It's farcical. I suspect someone or some group are being well looked after and its not the general public. its so bad that it doesn't make sense on any level you look at it from

Marius34 wrote:

All countries has it's own problems, and opposition has their magic medicine to improve quality of life, and affordability. Ireland politics is not unique in this. You may look for the differences, but result will be same. Capitals and other premium locations will have property affordability problem. SF may come, may look for different solutions, affordability problem will stay.

A bit of the Boston or Berlin argument in the noughties.
Which of those countries, those cities represent are run in the best interests of their country, citizens and economy

Even the Berlin problems documented earlier in this thread are from a lapse and move to Boston policies in an issue caused by Boston policies ie the banking crisis

Our problems are a direct result of political actions

hometruths

Marius34 wrote: »

All countries has it's own problems, and opposition has their magic medicine to improve quality of life, and affordability. Ireland politics is not unique in this. You may look for the differences, but result will be same. Capitals and other premium locations will have property affordability problem.
SF may come, may look for different solutions, affordability problem will stay.

I'm very happy to make the prediction that houses will be cheaper under a SF led government, if they're successful at the next election.

thefridge2006

cnocbui wrote: »

More simplistic drivel. Banks are barely lending and the number of hoops people are having to jump through to get loans and mortgages are considerable, so your supposition is wrong. There is no reckless and profligate lending going on.

This also adds to the whole problem of inflated house prices....I'm hearing of huge amounts of people getting AIP and set on their merry little way to bid bid and bid on their "forever home"......then when it comes to drawdown they run into a road block and are forced to pull out, leaving a house that has been bid up up and up and the second "lucky" party paying through the nose for it. Its a total mess out there at present and nobody seems to want to fix it

PropQueries

schmittel wrote: »

I'm very happy to make the prediction that houses will be cheaper under a SF led government, if they're successful at the next election.

I don't believe we will have to wait for a SF government, unless it happens in the next 12-24 months.

If people take any 5 year period over the past 100 years in Ireland or anywhere, we can see how quickly and without much notice all kinds of markets (incl. property) take a dive or inflate.

The main difference this time is that the central banks have little tools left as interest rates are literally at rock bottom and governments are already borrowed to the hilt.

This upward trajectory over the last 10 years has being due to the central banks and governments fighting the last battle. Markets will revert to fundamentals a lot sooner and without notice than many people believe IMO

I believe it would have happened already except for the cover of covid IMO

MacronvFrugals

Timing belt wrote: »

If SF had solutions why are they not making a difference at local authority level. Why are they adding to the problem by objecting to anything that a different political party puts forward...at the end of the day all the political parties are playing games to try and get votes and anyone that thinks that things will change overnight at a GE is deluded. If SF get elected housing will not be their no1 priority...it’s no1 priority will to get rid of special criminal courts followed by a United Ireland and then re-writing the tax laws to make the rich pay. (Just for clarity that is anyone above the average industrial wage)....maybe then they will look at housing which takes time to resolve if it is a sustainable solution.

In fairness Phil Hogan made local councils into puppy’s back in 2013, any decent power they had was taken away.

PropQueries

The Minister of Housing wrote an article in the Sunday Independent today where he said:

"My housing policy is shaped by the need for practical solutions to those hopes and fears by getting things done, not the silver bullet, overnight fantasies of some opposition TDs."

From my understanding the main housing policy he's intent on implementing is the policy that was, quite literally, handed to him by the property industry lobby groups.

Maybe he should rephrase "My housing policy" to "The property industry lobby groups policy" in the above quote?

Link to Sunday Independent article here: https://www.independent.ie/opinion/analysis/we-cant-let-the-perfect-be-the-enemy-of-the-good-in-solving-our-housing-crisis-40167239.html

awec

thefridge2006 wrote: »

This also adds to the whole problem of inflated house prices....I'm hearing of huge amounts of people getting AIP and set on their merry little way to bid bid and bid on their "forever home"......then when it comes to drawdown they run into a road block and are forced to pull out, leaving a house that has been bid up up and up and the second "lucky" party paying through the nose for it. Its a total mess out there at present and nobody seems to want to fix it

Yea? What's your source for this?

DubCount

schmittel wrote: »

I'm very happy to make the prediction that houses will be cheaper under a SF led government, if they're successful at the next election.

With the unemployment and recession a SF government would bring - you're probably right :rolleyes: