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

I had calculated before and posted in this thread about the HAP supplement and what it means for workers who don't earn a lot but too much to qualify for HAP. This wasn't to criticise those on HAP but instead to show how unsustainable, immoral and fantasy housing costs are in this country.

A couple with a child or a single parent get €1250 per month as a HAP to supplement their rent. Let's say one of the parents is on dole, that's €832 per month. And let's ignore any other benefits or the working parent in a couple. These benefits alone amount to €2082 per month or €25000 per year. That's the equivalent of working to earn €30000 per year before tax. I think the median salary is €37000 per year before tax.

Therefore, the government supports for the housing market, I contend, are directly (1) crushing the productivity in the economy (the workers) by essentially making it almost better to not work than work as a median income earning worker; and (2) putting a floor under the housing market by directly inflating the rental bubble which of course is lifting all house prices due to the gap between mortgages and rents and the yield potential for rentals which feeds into the price or the house.

To think that the State can continue on this "socialise housing" path and create so many disincentives to work is quite frankly to live in a fantasy land. The arse falling out of the housing market is vital for economic sustainability and future economic growth if we are approaching a situation (past it I'm sure in many cases) where working a job for an income does not pay. All that MNC tax cash and easy borrowing is going down the toilet which means, yet again, we will have to tighten the exchequer belt when the thing collapses instead of investing billions upon billions in upgrading so many parts of society that have due an upgrade for over ten years and counting. Banana republic.

I think a better functioning housing market would fix this, where there is plenty supply of all types of properties at all price points. The ideal scenario would involve an average single worker being able to afford their own place in Dublin city, where they work, as well as an average family being able to afford a place within Dublin. This would involve targeting a reduction in housing costs as a proportion of incomes to something below 20% as an average.

The benefits to the economy would be significant; more cash in people's pockets to spend in the economy, easier for the government to raise revenue in case things get tight as people aren't treading water with their finances because housing takes up so much of their take home pay. Those that need housing supports can get them and, due to cheaper housing being available, it won't cost the State anywhere near as much as it costs now. Forcing down housing costs significantly solves so many problems we have and should colour any discussion around a UBI.

But how would we get there without a crash? What would happen to all the people who bought houses in the last couple of years?

the russian china war links not going down well in stock markets so far ..

massive recession on the way here very shortly the way things are going.. supply is only one side of the property market equation people have to live, pay for food, fuel, heating, electricity, costs and uncertainty are going through the roof - would be home buyers have to have secure stress tested jobs for banks to lend beaucoup money for nose bleed celtic tiger houses....

Why will they be screwed? Lending has been prudent for the most part so as long as you have a job you will be able to service a mortgage. If a recession occurs and there is large scale job losses, that has wider implications for Irish society in general, let alone home owners.

Lots of hysteria being posted at the moment. Nothing like a good stockmarket headline to get all Chicken Little.

Wage inflation doesn't need to match general inflation for property prices to rise as a result. Say that wages increase by 3% (half of the CPI) then we will see house prices increase by 3% because people will be able to borrow more under the Central bank's LTI rules.

All that would happen is that you would get an increase in landlords buying property at the expense of FTB.... Unless the overall supply increases all you are doing is moving the pain point around.

I have never been unemployed but your missing the point and I think we are singing from the same hymn sheet. The government are putting people who are nett tax takers over those who get up off their asses and are nett contributors into the tax system. Like yourself. I would of never had rent freezes but no HAP either . HAP has artificially pushed up rents for you and everyone else- can you not see that? I think we are agreeing but you cant just pick and choose elements of government interference if HAP went so should rent controls and let rent be dictated by the open market. Then we wont have professional dole heads bleeding the system in their favour y'know they cant keep putting the gun to the our heads saying I want to live beside mumsy and have a south facing garden. Its nonsense. Look I feel for you its hard but the above needs to be rectified as its the likes of you who the housing list is being prioritized ahead of.

Sounds great in theory but how do you do it. Construction workers pay gone up, cost of materials gone up, Oil / Gas still going up, not enough workers to do the body of work needed to redress the supply vs demand issue. Where are you going to get these savings. The only solution is you are Hairy lou mcDonald in disguise and think the tax payer is the magic money tree. We cant afford what your outlining.

They would want to be a very stupid investor to not believe at this point that anything the government gave them was just a temporary trick.

Theyve been fcuked sideways for years and years now. They are like someone getting out of an abusive relationship at this point. I dont think youll see to many take any risk getting back in no matter what the carrot it. because there is always a stick behind the carrot with the irish government.

The only investors that will be interested are reits. and we see where thats going too.

The only solution is to reduce the standards for new builds, thereby reducing construction costs.

homebond is supposed to cover defects like that, but lack of enforcement from government led to those situations arising with the taxpayer ultimately footing the bill.

The problem isnt building regulations, (or a lack thereof) its enforcement. You absolutely can reduce the BER and other requirements for new builds without new builds being structurally defective.

Had a guy out quoting me for attic insulation.

Asked him about the grants for a retrofit (its the parents house). He said you would need to spend 100k to get the 25k back.