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

dontmindme

https://www.boards.ie/discussion/comment/120607805#Comment_120607805

Is there actual price drops or are the 'drops' being reported a drop in the rate of price increase growth?

fliball123

https://www.boards.ie/discussion/comment/120607916#Comment_120607916

Actual price drops and not a drop in the amount that prices were going up - Property prices in Dublin are about 2.5 - 3% less than this time 6 months ago.

Bakharwaldog

https://www.boards.ie/discussion/comment/120607916#Comment_120607916

Actual drops. According to CRO data, a property will cost you ~3% less today than what it would have cost in September 2022

Blut2

https://www.boards.ie/discussion/comment/120607171#Comment_120607171

You seem to be ignoring the other examples in my post. Would you call France a low income tax country? You absolutely can have high income tax and property taxes, as plenty of countries around the world have today.

Even in the US, a household in New Jersey (to use one of my listed examples, with a yearly property rate of 2.49%) with an income of $300k pays a tax rate of 35% on income. An Irish household earning €300k pays an equivalent of 44%. Not a million miles off, and the lower income tax, and higher tax on property, is surely much more beneficial to society. We'd be much better off taxing people's unproductive assets, rather than taxing them for working harder and getting promotions/higher pay.

And property tax is even better in that non-tax residents would still have to pay it, theres no escaping it. They'd actually have to contribute to local services. As well as other benefits like encouraging downsizing etc.

Beigepaint

https://www.boards.ie/discussion/comment/120607871#Comment_120607871

Non stop nonsense out of you.

Danny McCoy says the state should be bigger.

He's right, you're wrong.

https://www.irishtimes.com/business/2022/09/17/ibecs-closet-social-democrat/

Blut2

https://www.boards.ie/discussion/comment/120607227#Comment_120607227

Higher property taxes have been empirically shown to do literally the opposite of what you're suggesting. They encourage older people, who've kids have moved out, to downsize.

The immigration/emigration statistics are also very clear, Ireland is not bleeding high income earners - we still have net immigration even at the top income levels.

Most of wealthy Europe has higher marginal tax rates than Ireland at the high end of income - 55% in Denmark, France, Austria etc. With higher PRSI equivalents on top too. If you want to move to another country where you can earn €300k as a household and pay lower income taxes than Ireland you're going to struggle hugely. Which is why despite moaning about high earners being taxed too much in Ireland very few actually do move.

As I said in my last reply, the issue of foreign money buying Irish property is only accelerating. And will reach Vancouver/London destructive proportions if no measures are taken to restrict it. So short of higher property taxes, which you apparently object hugely to, what better, more effective, solution would you offer instead?

DataDude

https://www.boards.ie/discussion/comment/120608121#Comment_120608121

You’ve exempted everyone with a household income under €100k from this tax which is why it wouldn’t hit any older people!

I’m hugely supportive of higher property taxes but your proposal to link it to income tax is the stupid bit as they are already so progressive as is.

in terms of what I’d do, you could increase stamp duty massively but have it able to be fully offset against income tax paid in Ireland. Would deter foreign money but simultaneously support those actually working and paying tax in Ireland

fliball123

https://www.boards.ie/discussion/comment/120608104#Comment_120608104

Really I think most intelligent people would agree that our spending is an absolute joke. Just a little sample of the waste going on.

https://www.independent.ie/irish-news/state-waste-of-10bn-in-10-years/26326371.html

https://www.independent.ie/opinion/our-shameful-legacy-of-waste-and-incompetence/30953852.html

https://www.joe.ie/news/five-big-wastes-of-public-money-7951

https://www.pbp.ie/government-continues-to-waste-public-money-on-irish-water/

https://www.facebook.com/watch/?v=167650395469148

Not to mention other things like the price tag on the children's hospital or paying politicians 3/4 pensions no matter how competent or bailing out banks that were not systemic but the boyos buddies had to be bailed out, or what about Nama put the properties in here and anything decent cherry picked and sold for a pittance to insiders. How's about the amount we spend on our HSE and when you visit a hospital here its in an absolute dire condition so much so most third world countries would be ashamed of it. Yeah but you keep banging your drum that we need more taxes so the lads can keep burning through it. I think most educated people on here would agree the vast majority of people pay more than enough in taxes and get a p1ss poor return with regards to services for it and its time to take a microscope out and find out where our cash goes and get some accountability.

DataDude

https://www.boards.ie/discussion/comment/120608121#Comment_120608121

Also, comparison to Scandinavian countries is pointless due to the public service and social benefits they receive.

A person earning 300k in Ireland will pay more income tax than almost any non Scandanavian country in Europe. Massively more than UK and Germany. More than France. I’d struggle to think of any where you would pay a higher total tax.

combat14

interesting to see the famous brennan brothers have decided that now is the right time to pull the plug and get out of the irish hotel business

RTÉ’s At Your Service experts Francis Brennan and brother John put Kenmare hotels on market for €20.5m

https://m.independent.ie/irish-news/rtes-at-your-service-experts-francis-brennan-and-brother-john-put-kenmare-hotels-on-market-for-205m/a1830068034.html

Blut2

https://www.boards.ie/discussion/comment/120608291#Comment_120608291

This is wildly factually incorrect. Someone in Ireland earning €300k has an effective tax rate of 47%. In France it would be 53%, in Belgium 58%, the Netherlands 47%, etc. Not even touching on Scandinavia which also has higher taxes than Ireland, which is exactly why it has better public service and social benefits - the state can afford to pay for them. The statistics are very clear that Ireland is a low tax country in wealthy Europe.

The only EU countries with significantly lower tax burdens on high earners are also significantly lacking in high earning jobs. Good look trying to earn €300k a year in Greece or Bulgaria for example. Which is why the emigration/immigration statistics for high earners speak for themselves - for all the people moaning on the internet, in the real world more high earners are still moving to Ireland than leaving every year.

Blut2

https://www.boards.ie/discussion/comment/120608202#Comment_120608202

But, again, even in countries with exemptions for low earners higher property taxes have been empirically proven to result in more downsizing. So your theory is completely wrong.

Some sort of income tax link is the only way higher property taxes are going to be electorally possible in Ireland, unfortunately. No party is going to bring in a measure which hits struggling households.

Stamp duty is over 8% for non-resident buyers in the UK and it hasn't deterred foreign buyers in London. Its too easily written off as a once-off charge to properly discourage buying properties as long term investments. Over a 10-30 year period it averages to a negligible total cost to the investment. A yearly property tax does far more to discourage this because it hits every year, and rises as the value of the property does too - so it has a much bigger impact on the investment value.

OEP

https://www.boards.ie/discussion/comment/120606938#Comment_120606938

This isn't really true though. Desirable houses in desirable areas hold their value better than others - and these and the ones people typically want to trade up into

DataDude

https://www.boards.ie/discussion/comment/120608461#Comment_120608461

The three countries in the Europe where high salaries are as readily available as Ireland are Germany, Switzerland, UK. All have materially lower effective tax rates than Ireland at that level. It’s consistently cited as a barrier to inward investment. The reason we have so many high earners coming in is corporation tax levels, any suggestion it’s due to low income taxes is clearly a lie. Not seeing where you’re getting your figures for France.

How a tax could encourage downsizing when you exempt the vast majority of people from it literally make no sense. Unless your thresholds are too high, I suspect less than 1% of older people declare taxable income in excess of €100k per year.

Id support higher property taxes fully refundable against income tax which would give you the foreign investor deterrence you crave. It would also actively promote downsizing as low income high wealth households (typically older) would be forced to take action.

Putting in an exemption for sub €100k income means it will raise basically 0 revenue so you’re just piling it on to foreign investors (fine, behaviour deterrent which is what you want) but also high income earners who already prop the country up as is.

You will find countless independent research stating Ireland has THE most progressive income tax structure in the EU.

Your desire to limit foreign investment is sensible, but how you’ve proposed it be structured is quite clearly bonkers.

Galwayhurl

Just 13,400 properties excluding sites for sale on Daft. The lowest number in the last 2 years. And we're almost in June so things should be ramping up.

It's almost 5000 fewer than last summers high of 18,200. Not good.

combat14

https://www.boards.ie/discussion/comment/120608560#Comment_120608560

and yet prices are still dropping, continued interest rate rises are gradually having an affect

ApeEvolved

https://www.boards.ie/discussion/comment/120608560#Comment_120608560

Rates, rates, rates. The effect of rates is delayed. Its going to really come to head soon.

Expect the number of properties for sale to stay low for a while, but all of a sudden to start picking up rapidly when prices really start to drop.

Prices are dropping right now as effect of rates slowly start to impact, but the impact has barely got going. Once people realize prices are falling and recession hits world economies, the drops will be dramatic. Not driven by only rates, but also sentiment.

https://www.boards.ie/discussion/comment/120609042#Comment_120609042

Why would people sell due to rate increases, and where do they go?

I ask because it could take a decade for a bank to recover a house from someone who doesn’t pay their mortgage.

Also, as rents are rising, even with higher rates, a mortgage is still likely to be cheaper than renting.

I think there is a touch of chicken Licken about your post.

herbalplants

https://www.boards.ie/discussion/comment/120608218#Comment_120608218

Absolutely. The only people who refuse to see the waste are definitely at the receiving end of this waste of cash, therefore don't want to lose it.

ApeEvolved

https://www.boards.ie/discussion/comment/120609099#Comment_120609099

Rates impact everything. Rising rates are going to cause recession, as intended, which will massively impact not only purchases, but also the amount of people being forced or choosing to sell.

Property markets have been increasingly driven by investors over the last decade. The higher rates go, the less reason there is for them to go near property. We are already beginning to see a run into more safe returns offered by higher rates. Stupidly low rates caused property price expansion across the globe, and the reverse will cause the unravelling.

Forget about the supply narrative being told across developed Countries, as thats exactly what it is.

combat14

https://www.boards.ie/discussion/comment/120609099#Comment_120609099

persistent high inflation combined with a series of ongoing interest rate rises lead to lower and lower house price affordability eventually leading to would be house buyers to either reduce the amount they can actually offer to pay for a house (if getting a mortgage) or delay/cancel house purchase

over a period of time 6-12+ months sellers eventually realise that the peak of the housing market has occured (possibly october 2022) and decide to lower the asking price they are seeking in light of the new reality on the ground or else delay/cancel plans to sell the property whichever suits their personal circumstances best

as to where the seller would go... perhaps they would buy another house as originally planned only this time it may be cheaper as the market drops

uk banks/economists are predicting a 7-15% drop in UK house prices by mid 2024 for example we are just a little bit behind

timmyntc

https://www.boards.ie/discussion/comment/120609099#Comment_120609099

People trying to capitalise on high house prices - once assets start falling and the peak is passed it is time to sell quick.

Remaining small landlords in particular will be selling much faster when its reported on that prices are infact falling. Most small landlords do it as a retirement income, so when the asset starts depreciating its time to liquidate

awec

https://www.boards.ie/discussion/comment/120607977#Comment_120607977

More like 0.8% less than September 2022. A 3% reduction from September 2022 prices would bring us back to May 2022, and at this point the YoY would show negative (which isn't the case yet).

The RPI for August and September 2022 was unchanged, prices didn't move. The current RPI is lower than August 2022, but higher than July 2022. Prices are roughly 0.8% above July 2022 levels.

For the YoY to flip negative, prices in April would need to drop 3.4%, very unlikely at current trends. YoY likely to trend positive until July or August if current trends continue.

Prices usually bump a bit in the summer, but as previously noted in the thread, less people are selling right now than is usual for this time of year, so hard to predict.

Bakharwaldog

https://www.boards.ie/discussion/comment/120609571#Comment_120609571

I'd check the numbers for yourself on CSO. A lot bigger drop than 0.8%. There was a 0.9% drop in last month alone in Dublin

awec

https://www.boards.ie/discussion/comment/120610170#Comment_120610170

I am basing my numbers on the CSO, though you're right, it's 0.9%, not 0.8%. These are the national figures, not Dublin.

RPI in Sept 2022 = 167.7

RPI in March 2023 = 166.2

A drop of 1.5 points, or 0.9%.

Dublin is:

RPI in Sept 2022 = 150.9

RPI in March 2023 = 146.1

A drop of 4.8 points, or 3%. Maybe you were only talking about Dublin in your post.

mike_cork

https://twitter.com/higginsdavidw/status/1658877390729117698

Hadn't realized the minor decrease in prices is the steepest fall in 10 years!

Bakharwaldog

https://www.boards.ie/discussion/comment/120610190#Comment_120610190

You are completely right, sorry. I was using Dublin data!

Blut2

https://www.boards.ie/discussion/comment/120608539#Comment_120608539

You claimed, and I quote, "A person earning 300k in Ireland will more income tax than almost any non-Scandinavian country in Europe" This is demonstrably completely false - I named four non Scandinavian countries in my reply, and they're not the only ones. Even in your examples, someone in Germany earning €300k has an effective tax rate of 44%. In the UK 44%. They're not exactly low tax paradises compared to Ireland's 47% now are they? Particularly with their significantly lower average incomes on top...

You also claimed "Ireland is already bleeding high income earners for everything" - which is again statistically completely false. Trying to walk it back by now claiming our positive inward migration rate for high earners is down to X or Y doesn't change the fact your initial statement was completely false.

Higher property taxes encouraging downsizing doesn't need to make sense to you, its, again, completely statistically proven.

Ireland having the most progressive income tax structure in the EU is not remotely the same as Ireland having the highest income taxes for high earners in the EU, which is what you were initially claiming.

Why are you making up completely incorrect factual statements repeatedly? If you're going to make posts about a subject and attempt to sound authoritative the least you could do is do some basic research.

I get it, you don't want to pay property taxes, but the least you could do is actually make coherent, fact based, arguments against them instead of spouting gibberish.

awec

https://www.boards.ie/discussion/comment/120610235#Comment_120610235

No worries.

Taking the 1.5% drop in 3 months, if that trend continues at roughly the same pace, prices would drop to Jan 2018 levels (just picked an arbitrary date) in about 57 months, which would represent about a 24% drop overall in prices. Personally, barring some catastrophic event I believe that prices will stabilise before they get anywhere near 25% below today due to existing pressures on the market, but nobody knows for sure.

Again, this is nationally, not Dublin data.

Prices are falling, and while it's the steepest in 10 years, the rate of decline is still very, very slow right now.

DataDude

https://www.boards.ie/discussion/comment/120610294#Comment_120610294

Pretty much every single thing you’ve said there is completely false.

‘I named 4 countries with higher taxes’. You named 2 with higher. 1 with the same. 1 of the ones with higher taxes you seem to have quoted wrong versus anything I can see online. France appears to have marginally lower taxes on 300k income than Ireland from what I can see. So as far as I can see out of the 40 odd non-scandavian countries, you have named 1 with higher taxes than Ireland at that income level. So yes, Ireland is a high income tax country for high earners.

’Ireland is bleeding high income earners dry’. This isn’t a factual statement, it’s an assessment that I suspect 99% of people would agree with. It is also consistent with us having the most progressive tax system in the EU. I.E. we relatively bleed more from high income earners vs low income earners compared to any other EU country.

’Property taxes encourage downsizing’ - duh, but not when you literally exempt 95%+ of potential down-sizers from the tax entirely through an absurdly high exemption income level.

’you don’t want to pay property taxes’ - I said in multiple posts said I fully support higher property taxes and believe mine to be comically low. I pay more income tax in a single working day than I do in a year on my €1m+ house. I would happily see a tripling or more of property taxes and more rigorous enforcement of values. What I said was I don’t believe in your bizarre idea of property taxes that goes to 3% of value in high income households who already pay large swathes of tax, and exempt owners of €10m houses assuming their income is now below €100k. This would be an even further narrowing of Ireland tax base when we need to be widening it. Property taxes are currently one of the few taxes that could meaningfully and stably collect income from a huge tax base and you are proposing exempting 90% odd of households entirely.

The structure of your proposal is so beyond idiotic it’s hard to fathom but as with anyone driven by an extreme idealogy there’s no point arguing further. Thankfully we have smarter people in power so it’s not something we need to worry about.