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

DataDude

https://www.boards.ie/discussion/comment/120470469#Comment_120470469

Lot of merit in this, think it’s an excellent idea.

Personally would make some slight tweaks to exempt people who bought their first homes in particularly expensive times.

05-08 and 2018-23. There’s a whole cohort of people who got caught up in the frenzy of the Celtic Tiger and are still servicing insane mortgages and raising families in apartments worth far less than they paid for them 20 years later. Any one of those people who didn’t pack in the mortgage payments at the first sign of negative equity like the majority did are champions and don’t deserve any more financial pain inflicted on them.

Would be a small enough group to not materially impact your idea. Would need to be some sort of sliding scale based on house price index at time of purchase to avoid unfortunate binary cut off dates.

kippy

https://www.boards.ie/discussion/comment/120470793#Comment_120470793

It would depend greatly on the numbers and the trust you held in both the current government and more importantly future governments.......

Villa05

https://www.boards.ie/discussion/comment/120470469#Comment_120470469

Welcome to boards Tom Parlon

Brock Turnpike

https://www.boards.ie/discussion/comment/120470433#Comment_120470433

Are you a FF / FG party member by any chance?

BlueSkyDreams

https://www.boards.ie/discussion/comment/120471123#Comment_120471123

Lol, no.

But I know that a bird in the hand is worth 2 in the bush.

BlueSkyDreams

https://www.boards.ie/discussion/comment/120470812#Comment_120470812

That would never happen in reality.

Sounds like some kind of socialist wet dream to me.

Just because someone owns property, it doesnt mean they owe the rest of the country a house.

realitykeeper

https://www.boards.ie/discussion/comment/120471344#Comment_120471344

No, not just because they own a property but because inflating their property cost us 200 billion euro. Therefore, deflating their properties by the 200 billion euro they owe us, is not socialism, it`s just making them pay their debts. Alternatively we can all emigrate leaving property owners and migrants the only people left to service that debt. Looking on the bright side, at least you`ll get to zoom your grandkids in Melbourne once in a while.

DownByTheGarden

https://www.boards.ie/discussion/comment/120470469#Comment_120470469

So increase the demand for new houses?

How fast do you think new houses can be built?

What is going to happen to the price of new houses when you increase the demand for them without making enough supply?

Say you did somehow get the construction industry into overdrive like it was in the past. What are you going to do then when new houses are being built too fast. Apply the brakes suddenly? Whole other set of problems then.

Taxing things into the way you think you want them to end up rarely ends the way you think it will.

Its a poor tool and usually ends up having unintended consequences.

Bold move though. But an experiment to carry out on the whole population of Ireland? Lots of lives destroyed when it inevitibly throws up something you didnt think of in a couple of paragraphs :)

Bass Reeves

https://www.boards.ie/discussion/comment/120471649#Comment_120471649

It just another brainfart suggestion from a poster that 8-10 years ago used to post that we should abolish the minimum wage.

First unintended conquence would be nobody would do up any older stock as the PT would be inordinately high. Therefore all older smaller houses in towns and villages that are semi derelict would remain so and more would start to get that way.

Younger people who bought houses in the last five years would be punished for doing so. For older people on pensions it would create a financial burden that might cause homelessness.

It would create a housing trap for those families that were in small apartments or houses that they owned. They could not move as any house they bought would be subject to an inordinately high property tax and as there own home was as well it would have a low market value

People who need to move with there work would not be able to move house.

It would be an active discouragement to single people buying a smaller property as you would lose your first time buyer status. This would actually keep many people in there late twenties or early thirties in the rental market.

It could actually slow down building as if demand dropped it might become uneconomical for new building to take place.

Finally as any property tax is based on the property value it could decimate property tax returns. Therefore it would cause a situation where the rate had to be inordinately high to balance the impact.

Bank could have an issue with mortgage lending. After 20 years a property would collapse in value there banks would probably want repayments over 25 years max. This would increase repayments. In turn this would impact the level of mortgage allowed. This again could make house building uneconomic.

As I said a brain fart similar to other brain farts from the same poster

Jonnyc135

https://www.boards.ie/discussion/comment/120470433#Comment_120470433

On the wealth generation - This 'wealth generation' was not created by any Government, it was a by product of low interest rates and Quantitative Easing implemented by both the FED and the ECB. All this new money injected into the system after the GFC went straight into financial assets which gave the impression of wealth generation. Even the IMF stated this - This asset price inflation has really only created greater political and social divides between the haves and have nots which is resulting in the rise of populism and the shift from Centre politics in every western country.

Bass Reeves

I remember about 4 years ago on one if the property threads posting about a young couple who there parents advised them to buy a house rather than renting as a couple. I even think they may have got part of the deposit as a gift.

At the time on threads like the usual section of posters were adamant that the parents were wrong and that property prices would collapse as well as that the sky would fall in.

Daughter was talking about them recently. They are now well settled in. The house originally cost 275k, newer ones in the same estate are now 340k with less of a fit out being given by builders.

They refixed last year on the advice of the parents. There present repayments are sub 1k/year.

fliball123

https://www.boards.ie/discussion/comment/120471594#Comment_120471594

Can you quantify that 235 billion as you have to realise that banks cost about 50/60 billion of it (minus the value of shares in AIB and BOI) and the rest was on over spend in 2 major areas I am not allowed say which 2 sectors but if you look at how spend ramped up over the years from 2000 onwards you will see where our expenditure ballooned it had nothing to do with people who bought a house.

Villa05

Not sure why unions don't ask for the state to build affordable rentals for key workers.

http://www.rte.ie/news/education/2023/0413/1376666-teachers-into-congress/

fliball123

Why should we pay more for this every worker is feeling the pain with regards to the cost of living and the issue of acute supply providing this option will unfairly give some people more money to push prices up even more and the inflation spiral/property price spiral keeps going up. The only way to tackle the problem as has been pointed out is building more supply. I would prefer to see the modular homes ramped up to the hundreds of thousands in units and those on the likes of welfare, people who are deemed essential workers and people fleeing countries for their lives would have a n option of a cheaper place to live in and then anyone who wants a house can work and save and buy one and hopefully it will lower demand which will bring down prices.

Brock Turnpike

https://www.boards.ie/discussion/comment/120471328#Comment_120471328

Well I mean a large part of the page from which I quoted you is posts by you criticizing SF and praising the current government for being too successful. So it would certainly suggest some affiliation or connection to FF or FG.

Villa05

https://www.boards.ie/discussion/comment/120471772#Comment_120471772

The only time I've seen parents skeptical about there child buying was last year in London (Asian parents).

I've never come across an occurrence of an Irish parent advising caution with regard to property purchase, location, yes, but never outright buying

The amount of parents caught in the last bubble by going guarantor was quite high

4 years ago the money printing presses were sent into overdrive driving every asset price up further.

We live in a highly distorted market, be careful. The western world is playing russian roulette with the economy. The higher prices rise the more barrels in the gun are loaded

BlueSkyDreams

https://www.boards.ie/discussion/comment/120471594#Comment_120471594

Oh, so its the fault of property owners that the govt hasnt built enough houses.

I didnt know that.

BlueSkyDreams

https://www.boards.ie/discussion/comment/120471744#Comment_120471744

Certainly, asset price inflation has helped home owners, but when was this ever not the case?

We live in a Capitalist world.

Blame the game, not the players.

I do agree with you that we should do more to assist the have nots, and a lot of that revolves around building more houses (seems to be the one point everyone agrees on).

Worth noting that the poorest in Ireland are still 63% better off than the poorest in the UK, as an example.

There are extremely generous social welfare benefits here, as we all know. And low earners effectivley pay very little tax.

I dont think we need to be giving more cash to people, when you consider that an unemployed family with 3 kids take in more in benefits than a couple, with both people working, earn on the median wage.

That is just wrong and probably helps explain wby we have so many open vacancies for lower paid roles, when the country is at full employment.

But we do need more houses and pronto.

mike_cork

https://www.independent.ie/business/irish/inflation-cools-to-77pc-in-march-but-mortgage-payments-energy-and-food-prices-still-rising-42430760.html

"Irish mortgage interest rates held steady in February, with Ireland recording the third-cheapest mortgage rates in the 20-member eurozone, but that is unlikely to hold as Irish banks and non-bank lenders catch up with the ECB.

There has also been a slowdown in the number of people approved for a mortgage in the first two months of the year as higher interest rates bite."

Is there any published stats on how much of a slowdown there's been regarding the number of people approved for a mortgage ?

BlueSkyDreams

https://www.boards.ie/discussion/comment/120471929#Comment_120471929

No. just trying to balance the facts.

Current Govt housing delivery = Poor

Current Govt economic delivery = V.Strong. Top of the class in Europe.

I honestly feel that with SF, we will still end up with Poor for the Housing delivery (I dont see them improving much at all on the 30k per year being delivered, given rising interest rates, cost of building and the fact we simply dont have the construction workforce in the country to build much faster)

I see SF weakening the economic outlook, as they will attack MNCs via taxation, which will lead to less employment opportunities for young people in particular.

Current govt = 3 out of 10 for housing + 9 out of 10 for economy = 12 overall.

SF = 3 or 4 out of ten for housing + 6 out of 10 for economy = 9 or 10 overall.

obviously there are other factors to be considered, but in relation to these points, thats how I see it and I dont see SF moving the needle on any other major metric.

quokula

https://www.boards.ie/discussion/comment/120471594#Comment_120471594

Those grandkids are in for a shock when they arrive in Melbourne and find out property costs a lot more there than it does in Ireland, even after their recent crash.

RichardAnd

https://www.boards.ie/discussion/comment/120472347#Comment_120472347

Australia has also recently launched a major effort to draw workers into the country. We need only look around here in Ireland to see what happens when immigration takes off, especially when its in tandem with high wages of skilled workers.

There's no safe haven really, especially not in the Anglo-sphere. This is what decades of low interest funny money and infinite GDP growth has brought us.

DownByTheGarden

https://www.boards.ie/discussion/comment/120471871#Comment_120471871

I was shocked when i found out how many teachers left my kids school last year. Even more shocked when I heard how many are leaving this summer.

There wont be a teacher left in Dublin soon at that rate.

Jonnyc135

https://www.boards.ie/discussion/comment/120472289#Comment_120472289

We live in a Capitalist world - if we lived in a true free market Capitalist world there would have been no QE as the banks would have been let fail back in 08 even though it would have caused serious pain.

We live in a world now where it is disguised as Capitalist buts its more and more socialist than ever.

Socialise the debt and privatise the profits is not free market capitalism and never was.

I agree we have a way too generous social welfare system, but I really believe the actions taken by central bankers regarding low rates and QE have absolutely put a normal working life, prosperity and the chance of owning a house totally out of the reach of these people who 25 years ago would be contributing to society.

The consequences of infinite QE and low rates are comming home to roost.

realitykeeper

The de-dollarization of the global economy is likely to take time but it's off to a fast start. When the US dollar weakens a lot. Ireland's multinational sector will be affected badly. That will bring down house prices even if they crash before then.

RichardAnd

https://www.boards.ie/discussion/comment/120472468#Comment_120472468

The dollar was taken off the gold standard in the early 70s. Years ago, I watched a presentation where the presenter showed a graph that tracked things like divorces, crime, self-deletions and other such negative aspects of a society. His position was that all of these things spiked after the dollar was unfettered from gold. It's not necessarily something that I accept, but it's an interesting correlation.

However, one thing is clear to me, we're at the end of what chasing the infinite growth model has to offer. In the heady days of the Celtic Tiger, growth meant 4 holidays a year, a new car every other year, reams of consumer goods and all the other stuff that boomtown had to offer. Today, that same economic model is making life ever more difficult for the average Westerner as they squeezed ever the more for the sake of more GDP. What will the state do to keep this ball rolling?

Take the devil's shilling, and he'll come knocking for his pound.

pinksoir

https://www.irishtimes.com/ireland/housing-planning/2023/04/12/state-purchase-of-homes-for-tenants-not-eligible-for-social-housing-to-start/

This seems... fairly ridiculous.

So now anyone who is due to be evicted, regardless of income and social support status, can have the council try buy the house and rent it back to them at cost.

I'm not sure of the exact stats, but I read that something like 75% of buyers are FTBs and nearly all of the stock is ex-rentals. I suppose this will come down to fine details, but there's a potential scenario here where the oncoming stock in an already extremely tight and inflated market is taken out of circulation by deep pocketed councils (using your tax against you). I know tons of folks who had to move in with their folks while they wait for houses to become available to buy as there's nowhere to rent. They should start unpacking and getting more comfortable I suppose.

I mean, the obvious answer here is to build build build, but it seems the plan is to do anything except for that. Wildcard after wildcard.

BlueSkyDreams

https://www.boards.ie/discussion/comment/120472468#Comment_120472468

I agree with the QE aspect, but we cant just punish all homeowners because of the actions of the banks and the govt.

Most people that own a home (or are paying a mortgage) have worked very hard to get there and some have been through negative equity, made personal sacrifices, such as limiting or not having kids, so they can pay down a mortgage.

So many different stories for so many different owners.

They have done the right thing by sacrificing and paying down a mortgage for the sake of their family.

It wouldnt be fair or equitable to ultra tax all of those people, just because they didnt buy a home in 2023!

And would you then ultra tax the 2023 buyers anyway in 2024, since they no longer own a new home.

Only about 1.3% of all permanent dwellings will be built in 2023, 30k out of approx 2.2 million.

You would apply an ultra tax to 98.7% of homeowners, who could only avoid that tax by purchasing a new home & there are barely any of those available anyway. Not to mention the fact the govt and funds are buying up a lot of the scraps that are available.

If a homeowner did manage to buy a new build, the person moving into their old home is now liable for the same ultra property tax, and the price of the 2nd hand home wont come down anyway, becuase there are not enough new homes being built to enable people to move to in the first place.

You'd have to be delivering something like 30k homes a month, not a year, to start to move the needle down on 2nd hand prices. Its impossible with our current infrastructure and planning to build 360,000 homes per year.

Villa05

https://www.boards.ie/discussion/comment/120473082#Comment_120473082

Are the REITs allowed to jump on this gravy train, sell their older stock that may be affected significantly by rent controls, use the proceeds to buy fresh stock and rent out at current market rents and all tax free

timmyntc

https://www.boards.ie/discussion/comment/120473082#Comment_120473082

What does it mean to rent it back to them at cost?

Cost relative to what?