Irish Government engaging in anti-competitive practices against Irish citizens?

snow_bunny

Mods, I think we need a dedicated thread for the specific discussion of government interference in the property market and its effect.

Yesterday, saw yet another enlightening Business Post story from Killian Woods. This time, he's discussing the diversion of over €200m of state money to the financing of homes built for cuckoo funds.

Worse than that, this €200m was supposed to be meant for "Home Building Finance Ireland", which was established to finance small and medium Irish builders to deliver mid-priced homes.

Instead of this money being distributed as originally intended, it has ended up being concentrated to the benefit of large developers and cuckoo funds.

As this Twitter thread by Orla Hegarty points out:
Why advantage one large player with €75m, when the market could be opened up by financing 75 regional SME developers with €1m each, & a licence to build homes on public land?

European Commission: ‘inflation of building & constructions materials 2% & 0.9% in Ireland. Taxes, levies, fees, finance & marketing not surged.. high inflation may be partly explained by an increase in margins, which may indicate insufficient competition’ (Source)

The government is creating a situation where large funds/developers have increasing and excessive market influence. They can inflate prices by controlling delivery and drip-feeding properties. The same as we are seeing in the rental sector. Instead of driving market efficiency through competition, the government appears to be using funds that were intended for that purpose to prop up an oligopolistic market structure.

Cal4567

https://www.businesspost.ie/houses/bulk-leasing-of-social-homes-has-no-substantial-economic-benefit-08149a9f

Killian Woods again in today's Sunday Business post.

Bulk leasing of social homes has no ‘substantial economic benefit’

Eurostat said the practice of leasing social homes, as opposed to buying them outright, has almost completely de-risked development costs and funds “enjoy most of the rewards” of the deals.

Developer acquaintances of mine have been telling me for the last couple of years that this was their preferred business route. As the banks here wouldn't fund them, they'd get capital from an overseas fund, at a juicy interest rate for the financiers. The golden egg though was the State who were keen to do the deal, thereby total derisking the project more or less from the start. No first time buyers to worry about. Profit secured.

Almost everything the government does, in relation to housing, is at the expense of Joe Soap trying to get on with his life. I am struggling to think of anything that's been done to benefit people.

Even things like the Rebuilding Ireland Home Loan, which on it's face is a useful thing to have - if you live in Meath, you need to apply in person for this scheme, by making an appointment with the person the Council have put in charge of the scheme... the next appointments are in late December. So it'll take you 6 months to send in an application form. :rolleyes:

Seems to be deliberately frustrating people who want to use a scheme that actually helps them out.

Anyone standing on their own two feet in this country, gets shafted time and time again. Housing is just the most obvious example of it.

Hubertj

Cal4567 wrote: »

https://www.businesspost.ie/houses/bulk-leasing-of-social-homes-has-no-substantial-economic-benefit-08149a9f

Killian Woods again in today's Sunday Business post.

Bulk leasing of social homes has no ‘substantial economic benefit’

Eurostat said the practice of leasing social homes, as opposed to buying them outright, has almost completely de-risked development costs and funds “enjoy most of the rewards” of the deals.

Developer acquaintances of mine have been telling me for the last couple of years that this was their preferred business route. As the banks here wouldn't fund them, they'd get capital from an overseas fund, at a juicy interest rate for the financiers. The golden egg though was the State who were keen to do the deal, thereby total derisking the project more or less from the start. No first time buyers to worry about. Profit secured.

What I would like to understand is can an alternative be found in relation to EU rules on Capex. This was the purpose of the report, which confirmed leasing does keep it off balance sheet while at the same time confirming it’s sh*t value for money. At the very least they should be looking for a significant discount on the rent considering it is 100% guaranteed for 25 years. Again this come down to a lack of competence in the public sector which is driven by a lack of accountability.

Ace2007

Deleted User wrote: »

Anyone standing on their own two feet in this country, gets shafted time and time again. Housing is just the most obvious example of it.

Actually the most obvious example is them taking 51% of any bonus you get paid in work. Dare i say that's why you hear of so many people getting a big bonus - because once tax is taking into account, it's not that big if taking it in hand.

Jmc25

[Deleted User] wrote: »

Almost everything the government does, in relation to housing, is at the expense of Joe Soap trying to get on with his life. I am struggling to think of anything that's been done to benefit people.

Have to agree. The market as a whole isn't set up in ordinary people's favour.

Obviously we're all well versed in the plight of first time buyers at the moment, but realistically the lack of supply of second hand homes suggests people looking to move location or buy a bigger house because of changing family circumstances don't see the market as being in their favour either - they're a buyer too at the end of the day.

Unless you intend to sell without buying - essentially if you own multiple properties or inherit one - the current state of affairs is crap for everyone.

The one silver lining of rising prices usually - increased supply of houses - isn't even happening, so maintaining the status quo here really is a completely pointless exercise unless all the Government cares about is parents passing their children a valuable asset. But even then, the vast majority of people are just going to cash in on that asset and throw the proceeds at a house for themselves!

Ace2007

Deleted User wrote: »

Almost everything the government does, in relation to housing, is at the expense of Joe Soap trying to get on with his life. I am struggling to think of anything that's been done to benefit people.

Even things like the Rebuilding Ireland Home Loan, which on it's face is a useful thing to have - if you live in Meath, you need to apply in person for this scheme, by making an appointment with the person the Council have put in charge of the scheme... the next appointments are in late December. So it'll take you 6 months to send in an application form. :rolleyes:

Seems to be deliberately frustrating people who want to use a scheme that actually helps them out.

Anyone standing on their own two feet in this country, gets shafted time and time again. Housing is just the most obvious example of it.

Also correct me if i'm wrong, but i believe in other thread, you actually stated that you own a house already - many may view that you aren't an ordinary person trying to get on the ladder, given you are already on it, and due to a technicality your still a FTB for mortgage purposes.

One could argue this technicality has benefited you - would you not agree?

RichardAnd

Deleted User wrote: »

Almost everything the government does, in relation to housing, is at the expense of Joe Soap trying to get on with his life. I am struggling to think of anything that's been done to benefit people.

Agreed. I used to believe that this was incompetence, but I now simply see the state as an actively hostile entity against productive individuals. Something needs to change, and change soon...

Ace2007

Ace2007 wrote: »

Also correct me if i'm wrong, but i believe in other thread, you actually stated that you own a house already - many may view that you aren't an ordinary person trying to get on the ladder, given you are already on it, and due to a technicality your still a FTB for mortgage purposes.

One could argue this technicality has benefited you - would you not agree?

Technically: correct. Practically: my situation is complicated, though. However, I would have a hard time arguing that the government stance on housing has been of any benefit to me (nor has it been of any benefit to anyone I know who is trying to buy at the moment).

Even the UK (who we usually piggyback all our ideas from) have 4.5x mortgages as standard, and their exception system is 5.5x.