Irish Property Market chat II - *read mod note post #1 before posting*

Marius34

Villa05 wrote: »

So?
Incomplete question

Increasing multiples of income increase price

Htb will increase price

And here are my original point, that if they remove 3.5 limit, they could push price up. But you contradicting yourself your initial response.

Villa05 wrote: »

3.5 rule does not dictate price.

Villa05

Marius34 wrote:

But you contradicting yourself your initial response that income limit has no impact to the price.

Did I, it would be extremely out of character with my overly consistent posting

Sorry for the slip

snow_bunny

Ace2007 wrote: »

Just to be clear without investment funds many healthcare facilities and infrastructures would not exist. So while maybe they are not helping the situation in terms of buying house estates. As a society we need these investment funds and the capital that they are willing to provide.

Shopping centres/office blocks etc would either not be built or fall into disarray only for these investment funds. Private companies do not have the expertise or the outlay to purchase these block themselves.

Just to be clear, you know very well that's not the type of investment being highlighted here.

The investment being highlighted isn't even the likes of those who fund apartment buildings to be rented. It's the type of investment funds buying entire estates and buildings that were built with the intention of selling to private individuals. It's the type of fund that's going around buying one off 3 bed semis in Dublin and the surrounding areas.

If they want to finance, build and rent an entire building -off they go. We should tax them the same as anyone else though. But if they want to buy up any and all properties that already exist, they should be prohibited. Can you see the difference?

Ace2007

snow_bunny wrote: »

Just to be clear, you know very well that's not the type of investment being highlighted here.

The investment being highlighted isn't even the likes of those who fund apartment buildings to be rented. It's the type of investment funds buying entire estates and buildings that were built with the intention of selling to private individuals. It's the type of fund that's going around buying one off 3 bed semis in Dublin and the surrounding areas.

If they want to finance, build and rent an entire building -off they go. We should tax them the same as anyone else though. But if they want to buy up any and all properties that already exist, they should be prohibited. Can you see the difference?

But your issue is that you have no problem with them buying up apartments for sale, or buying up lad, and finance/build/rent an entire building. Even though there are issues here - what about those that want to buy apartments and can't - why is it fair to push them aside?

There has to be a role for investment funds otherwise many developments wouldn't get built - they are providing finance in advance in some cases - whose going to cover this if they aren't?

snow_bunny

Ace2007 wrote: »

But your issue is that you have no problem with them buying up apartments for sale, or buying up lad, and finance/build/rent an entire building. Even though there are issues here - what about those that want to buy apartments and can't - why is it fair to push them aside?

There has to be a role for investment funds otherwise many developments wouldn't get built - they are providing finance in advance in some cases - whose going to cover this if they aren't?

I'll simplify it:

Fund, build, rent: GOOD.
Increases rental stock that otherwise wouldn't exist and like you said yourself, we need investment funds in some manner.

Buy, use government funding to build/buy, rent: BAD.
Doesn't increase rental stock, competes with home buyers, decreases available stock for purchase, allows for rental price monopoly, increases prices of both rental and buying market.

Also, you keep throwing up strawman arguments because you're unable to provide counter arguments to the points being discussed here. It's more obvious than you probably think it is.

Ace2007

snow_bunny wrote: »

I'll simplify it:

Fund, build, rent: GOOD.
Increases rental stock that otherwise wouldn't exist and like you said yourself, we need investment funds in some manner.

Buy, use government funding to build/buy, rent: BAD.
Doesn't increase rental stock, competes with home buyers, decreases available stock for purchase, allows for rental price monopoly, increases prices of both rental and buying market.

Also, you keep throwing up strawman arguments because you're unable to provide counter arguments to the points being discussed here. It's more obvious than you probably think it is.

They aren't strawman arguments though - the council all over the country have been sitting on lands for 20+ years through the Celtic Tiger, the recession, covid and they aren't building - even when everything was cheap - they didn't build - they don't want to be involved in the process.

You want the government to fund, build, and sell new homes for individuals?

Yet you don't seem to want to tell us where the money is going to come from.

Others want to buy homes in certain areas of the country where new builds aren't realistically going to be built - so how is that problem solved.

Even SF in their priorities on their website don't have banning Investment funds from buying family homes - strange that given out much they were shouting from the rooftop last week?

Let's here some creditable solutions to the problems.

snow_bunny

Ace2007 wrote: »

They aren't strawman arguments though - the council all over the country have been sitting on lands for 20+ years through the Celtic Tiger, the recession, covid and they aren't building - even when everything was cheap - they didn't build - they don't want to be involved in the process.

You want the government to fund, build, and sell new homes for individuals?

Yet you don't seem to want to tell us where the money is going to come from.

Others want to buy homes in certain areas of the country where new builds aren't realistically going to be built - so how is that problem solved.

Even SF in their priorities on their website don't have banning Investment funds from buying family homes - strange that given out much they were shouting from the rooftop last week?

Let's here some creditable solutions to the problems.

Strawman: Substituting a person’s actual position or argument with a distorted, exaggerated, or misrepresented version of the position of the argument.

We're talking about foreign investment funds buying up all forms of property, both apartments and houses, competing with buyers, driving up prices, locking citizens out of homeownership, the government's collusion with them and the use of our tax money to fund the whole lot.

They're buying the cow from us, with our own money, and renting us the milk.

You're coming on defending the whole swindle by saying we need shopping centres built and insinuating that people have no issue with them buying up apartments, (this was never said).

As for how we'd get them built? How do you think we got them built before all this? It would still be immensely profitable for them to fund their own building and rent them out. It would be immensely better value for us to incentivise builders to build and sell to average Joe's, through tax or part funding from the government. It would be immensely better value for the state to BUY these apartments instead of renting them at extortionate, inflation tracked rents instead of spending near billions on HAP.

Why are you bringing SF into it? Is that the real position you're coming from, that of a FF/FG defender?

Ace2007

Ok let's go through each solution you have:

Foreign investment funds: Not all investment fund are foreign. So are you ok for Irish Investment Funds buying what ever they like?

How are they using our money to buy anything? It's their money from their investors, some may be Irish but some may not be - just like there are Irish investors investing in investment Fund properties abroad.

i outlined to you the councils sitting on land for last 20 years and haven't built houses - why not?

You want the government to give tax breaks to developers? Put a poll up here and see how many people agree with you on that idea - that would be shot to pieces by the opposition and the public.

You want the government to buy these houses and rent them out - so the average Joe can't ???

How many people have been evicted from government owned properties in this state over the last 20 years?

The government could build 20,000 in greenfields out by the airport - and the prices of houses in the great Dublin area would still be sky high - because the people bidding against each at the moment don't want to move out to the airport.

I mentioned SF because of the bashing of the government to highlight that the opposition don't have any big plans to solve this issue either.

timmyntc

Ace2007 wrote: »

Ok let's go through each solution you have:

Foreign investment funds: Not all investment fund are foreign. So are you ok for Irish Investment Funds buying what ever they like?

How are they using our money to buy anything? It's their money from their investors, some may be Irish but some may not be - just like there are Irish investors investing in investment Fund properties abroad.

i outlined to you the councils sitting on land for last 20 years and haven't built houses - why not?

You want the government to give tax breaks to developers? Put a poll up here and see how many people agree with you on that idea - that would be shot to pieces by the opposition and the public.

You want the government to buy these houses and rent them out - so the average Joe can't ???

How many people have been evicted from government owned properties in this state over the last 20 years?

The government could build 20,000 in greenfields out by the airport - and the prices of houses in the great Dublin area would still be sky high - because the people bidding against each at the moment don't want to move out to the airport.

I mentioned SF because of the bashing of the government to highlight that the opposition don't have any big plans to solve this issue either.

The state could not build houses because of EU borrowing rules pre-covid.
Theres no problem with investment funds (foreign or Irish) building houses - directly or indirectly. Them financing or agreeing to buy whole apartment blocks before they are built is good because it adds to supply - as youve said prior its unlikely theyd get built otherwise.

Funds buying housing estates is not good - it adds to demand, not supply. Houses are built anyways, because theyre cheap(er than apartments) to build, and because there is demand from people to buy them.

Funds buying houses is a bad thing, funding & buying apartment blocks is good. The two positions do not contradict each other - at the end of the day its about increasing supply and reducing demand to make the market more affordable.

Ace2007

timmyntc wrote: »

Funds buying housing estates is not good - it adds to demand, not supply. Houses are built anyways, because theyre cheap(er than apartments) to build, and because there is demand from people to buy them.

Funds buying houses is a bad thing, funding & buying apartment blocks is good. The two positions do not contradict each other - at the end of the day its about increasing supply and reducing demand to make the market more affordable.

Does Funds buying housing estates not open up a new possibility in Ireland that has never existed before - in that families could live in high standard homes, with proper rent control and tenant rights. This would see less mortgages and stress about being in debt for 30 years. People could enjoy the hard earned cash and enjoy their lives more.

Reversal

https://m.independent.ie/business/personal-finance/property-mortgages/new-blow-for-first-time-buyers-as-two-banks-close-off-mortgage-exemptions-40465567.html

Not sure why this is being reported as bad news for FTBs. Less fuel on the fire at the moment can only be a good thing.

Villa05

Ace2007 wrote:

Just to be clear without investment funds many healthcare facilities and infrastructures would not exist. So while maybe they are not helping the situation in terms of buying house estates. As a society we need these investment funds and the capital that they are willing to provide.

The irony being that the biggest budget cut after the crash relating to overpriced property caused by the financial sector was to capital spending

The financial sector has profited greatly from the crash it caused.

There is something not right about that statement

timmyntc

Ace2007 wrote: »

Does Funds buying housing estates not open up a new possibility in Ireland that has never existed before - in that families could live in high standard homes, with proper rent control and tenant rights. This would see less mortgages and stress about being in debt for 30 years. People could enjoy the hard earned cash and enjoy their lives more.

No, it just pushes up prices because families of average wage or above want to own their own homes. Not rent indefinitely.

Reversal

Ace2007 wrote: »

Does Funds buying housing estates not open up a new possibility in Ireland that has never existed before - in that families could live in high standard homes, with proper rent control and tenant rights. This would see less mortgages and stress about being in debt for 30 years. People could enjoy the hard earned cash and enjoy their lives more.

Just lol. Yeah super enjoyable paying twice as much of that hard earned cash every month, until the day you die, not just 20-30 years.

Sounds stress free alright.

Marius34

Reversal wrote: »

https://m.independent.ie/business/personal-finance/property-mortgages/new-blow-for-first-time-buyers-as-two-banks-close-off-mortgage-exemptions-40465567.html

Not sure why this is being reported as bad news for FTBs. Less fuel on the fire at the moment can only be a good thing.

Because there is competition with other buyers.
It's bad news for FTB, but its good for STB (partially), Cash buyers and investors.

coolshannagh28

snow_bunny wrote: »

Just to be clear, you know very well that's not the type of investment being highlighted here.

The investment being highlighted isn't even the likes of those who fund apartment buildings to be rented. It's the type of investment funds buying entire estates and buildings that were built with the intention of selling to private individuals. It's the type of fund that's going around buying one off 3 bed semis in Dublin and the surrounding areas.

If they want to finance, build and rent an entire building -off they go. We should tax them the same as anyone else though. But if they want to buy up any and all properties that already exist, they should be prohibited. Can you see the difference?

There is a "two legs good, four legs bad " debate going on here . The govt and the troika concocted this arrangement 10 years ago , over time it has become accepted and many are still justifying it even though it was and is essentially a treason on the Irish citizen and taxpayer.

Villa05

Marius34 wrote:

And here are my original point, that if they remove 3.5 limit, they could push price up. But you contradicting yourself your initial response.

I think that quote was said in the context of investment funds dictating price as is the case with Dublin apartments. The consensus on the changes to planning and stamp duty changes appears to be that they will do little to stop investment funds from continuing to buy up houses. Lobbying for shared ownership would imply that they are planning to soak up far more housing stock

If that is the case then the rules are irrelevant as the market has moved on from those rules

New kid in town and those rules don't apply to them as they don't need a mortgage

Ozark707

Marius34 wrote: »

Because there is competition with other buyers.
It's bad news for FTB, but its good for STB (partially), Cash buyers and investors.

I am failing to see how this is bad news for FTB. If there were no limits they would just get shovelled more debt for the same house/apt.

Reversal

Reversal wrote: »

https://m.independent.ie/business/personal-finance/property-mortgages/new-blow-for-first-time-buyers-as-two-banks-close-off-mortgage-exemptions-40465567.html

Not sure why this is being reported as bad news for FTBs. Less fuel on the fire at the moment can only be a good thing.

Because FTBs are more likely to need an exemption

Marius34

Villa05 wrote: »

I think that quote was said in the context of investment funds dictating price as is the case with Dublin apartments. The consensus on the changes to planning and stamp duty changes appears to be that they will do little to stop investment funds from continuing to buy up houses. Lobbying for shared ownership would imply that they are planning to soak up far more housing stock

If that is the case then the rules are irrelevant as the market has moved on from those rules

Again you returned to contradict yourself

Villa05 wrote: »

Increasing multiples of income increase price

Ace2007

timmyntc wrote: »

No, it just pushes up prices because families of average wage or above want to own their own homes. Not rent indefinitely.

But how do you know that families want to get themselves into debt for the next 30 years. Has there every been an opportunity to rent high quality houses, with proper rent controls introduced before?

You could for instance have a ceiling of mortgage rates less 0.xx% or something so that it would never cost more than a mortgage would (as you would never own the house). Guaranteed stable yield for the investment funds which many investors are looking for.

You shoot down the argument simply because families want to buy their own houses - and that's only because it's the Irish way of doing things.

Ace2007

Ozark707 wrote: »

I am failing to see how this is bad news for FTB. If there were no limits they would just get shovelled more debt for the same house/apt.

A couple on 100k salary can borrow 350k, with exemption they could get up to 450k. If you pull the exemption from them - they are then left looking for alternative houses that match their wants, and puts more pressure as less houses meet their wants

I think that the exemption process needs an overhaul but that's for another thread.

Reversal

Ace2007 wrote: »

A couple on 100k salary can borrow 350k, with exemption they could get up to 450k. If you pull the exemption from them - they are then left looking for alternative houses that match their wants, and puts more pressure as less houses meet their wants

I think that the exemption process needs an overhaul but that's for another thread.

But if people can afford less, what's happens to prices...

JDD

Ace2007 wrote: »

But how do you know that families want to get themselves into debt for the next 30 years. Has there every been an opportunity to rent high quality houses, with proper rent controls introduced before?

You could for instance have a ceiling of mortgage rates less 0.xx% or something so that it would never cost more than a mortgage would (as you would never own the house). Guaranteed stable yield for the investment funds which many investors are looking for.

You shoot down the argument simply because families want to buy their own houses - and that's only because it's the Irish way of doing things.

Yes, but what about when the parents of the family retire. Even those on gold plated defined benefit pensions only get paid half their income on retirement, and those types of schemes are gold dust nowadays.

If, like everybody else, you started a Defined Contribution pension in your mid thirties, it's likely you'll be paid about a third of your final salary per month, even including the state pension.

The way it works right now is that your major outgoing - your mortgage - finishes when you are 65-70, just as your income decreases. That will not work for a rented house. Where do these retired couples go?

I see where you're coming from here. Myself and my husband rented an apartment when we got married, and then rented a house when we started having children. We had both been burned by house owning in the recession, and thought long and hard about never becoming house owners again so that we would never have that noose of debt again.

But it didn't make economic sense. Even if we had a ten year lease with a guarantee of X amount of rent we knew that the older we got the higher any mortgage payment would be. And if we decided to never enter the house buying market again we'd have a large issue when we retired. We knew that we could downsize to an apartment but unless you can secure a rent controlled apartment you may find yourselves subject the vagries of the market. 2 bed apartments in my estate are renting for 150% the amount of the monthly mortgage payment I pay on my house.

And with children living with their parents longer, or returning home, a 2 bed apartment and potentially adult children living with you, it just wouldn't cut it.

So we felt that we had no choice but to enter the house buying market. And that's setting aside the risk that our house would be sold by our landlord, or the rent increased every year, or any other security of tenure risks.

Amadan Dubh

Ace2007 wrote: »

Does Funds buying housing estates not open up a new possibility in Ireland that has never existed before - in that families could live in high standard homes, with proper rent control and tenant rights. This would see less mortgages and stress about being in debt for 30 years. People could enjoy the hard earned cash and enjoy their lives more.

In an ideal world, should those decent but by no means spectacular, rentals be cheaper than current mortgage prices, as they should be. But not when they are 40%+ more expensive than the price of a mortgage.

It is free money for the house owner! Put up the money for the mortgage + rent it out = house pays for itself! We are so dangerously close to the sun I cannot see any unwinding of the market in an orderly manner.

Marius34

Reversal wrote: »

But if people can afford less, what's happens to prices...

goes down. And less number of FTB will have a new home. Cash buyers share increase on the market.

JDD

Ace2007 wrote: »

A couple on 100k salary can borrow 350k, with exemption they could get up to 450k. If you pull the exemption from them - they are then left looking for alternative houses that match their wants, and puts more pressure as less houses meet their wants

I think that the exemption process needs an overhaul but that's for another thread.

Exemptions are only 10% of the mortgage book, so they actually don't put that much extra pressure on the market.

And the problem of course with reducing a FTB's ability to buy, is that they decide to stay in the rental market waiting until they can save more to buy a house in the area they want, rather than a house in their newly reduced range. So that puts extra pressure on the rental market with all the attendant issues that come with that.

Ace2007

Amadan Dubh wrote: »

In an ideal world, should those decent but by no means spectacular, rentals be cheaper than current mortgage prices, as they should be. But not when they are 40%+ more expensive than the price of a mortgage.

It is free money for the house owner! Put up the money for the mortgage + rent it out = house pays for itself! We are so dangerously close to the sun I cannot see any unwinding of the market in an orderly manner.

But that's why i said it's an opportunity to develop rent controls and tightening tenant rights. I came up with the idea in 2mins. Every idea is going to have pro's and con's.

At the moment there are people paying more for rent than a mortgage, so if a system was set up that rent in an investment fund type property or family house, was capped at rate lower than a mortgage, it would make the homes more attractive, as people would get what they want at a price lower than they are paying at the moment. They would also not have a noose over their heads for the next 30 odd years. There may be issues to iron out at retirement, but lets face it - since when have the majority of Irish people cared about their needs at retirement - given majority have no provision in place except the state pension.

Villa05

Villa05 wrote:

If that is the case then the rules are irrelevant as the market has moved on from those rules

Villa05 wrote:

Increasing multiples of income increase price

Marius34 wrote:

Again you returned to contradict yourself

Are they not seperate statements?

The rule has been static since inception in 2015. If parts of our market have there price dictated by bodies not impacted by that rule, then that rule becomes irrelevant in establishing price in that particular market

Ace2007

JDD wrote: »

Exemptions are only 10% of the mortgage book, so they actually don't put that much extra pressure on the market.

And the problem of course with reducing a FTB's ability to buy, is that they decide to stay in the rental market waiting until they can save more to buy a house in the area they want, rather than a house in their newly reduced range. So that puts extra pressure on the rental market with all the attendant issues that come with that.

But correct me if i'm wrong, you can only get an exemption until you have a property in many cases, so there are people viewing houses, and potentially bidding on houses that in fact not get an exemption, so while it's capped from the bank's point of view, some FTB don't know that they might not get it.