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

It's just a complete 'create content' fluff piece - the first line according to the 'leading mortgage broker' is "Double-digit growth in property prices could "end badly" for mortgage applicants who "overstretch themselves"". Overstretched means just that, it's hardly meant to mean things are going well. Then they go on to imagine what if one of two borrowers lose their job. Like what is this, water is wet?

Unfortunately, there's no such thing as house prices falling 20% in isolation.

The only way the price will fall is when demand dries up. That means that buyers either lose their savings or lose access to credit. There's simply too much demand to see a price drop soon.

There were very few ordinary people who were picking up bargain houses back in 2009. Banks simply weren't lending and too many people lost their jobs and savings.

RE " the vast majority of homeowners would see absolutely no negative difference to their lives" There's a good chance people's mortgage rates would increase as LTV% increase, so some would be under more pressure to meet repayments.

Institutional buyers and AHBs are a huge portion of buyers now. They could easily be curtailed without destroying the economy, and house prices would fall as a result of reduced demand.

As it stands non owner occupiers made up over 40% of new build purchases last year

In China, non Chinese citizens may only buy a single property, and it's subject to all sorts of restrictions. One must be resident there and one may not rent it out.

https://wise.com/us/blog/buying-property-in-china

China also wisely does NOT recognise dual citizenship.

We, however, allow Chinese investors to hoover up property over here and rent it out.

All of the above aside, we may suggest any number of things that the state could do to arrest house prices rises, but it's all moot. The powers that be have made it abundantly clear that their intention is perpetual growth, damn the consequences.

Strawman. I wasn't commenting on their property situation, but merely their approach to handling dual citizenship and the matter of non-nationals owning property in their country.

They just wouldn't pay the full repayment....

If the last recession taught us anything it's that banks will rarely repossess and indeed can rarely repossess. The state won't let it happen generally as those people then become the states problem. The borrower will renegotiate their repayments etc

It's a matter of having a thick neck in reality.

Indeed! A lot of things could easily be done, but anything that in any manner restricts property price growth is, as the last decade will adduce, not going to happen. Ireland is not a functional nation; it's an investment fund with a welfare state and a football team.

We wouldn't even need to fully restrict foreign ownership like that. Just bring in high stamp duty rates (of up to 65% like in the Singapore example I posted) as a start - that should curtail most of the demand, and raise some revenue for the state while we're at it.

There are no losers from bringing in high stamp duty for foreign purchasers you'd think - extra revenue for the state, less demand for houses, good optics for politicians, and it won't impact a single Irish voter. And we have ample evidence of it working in other jurisdictions, its very quick and easy to implement.

But there are no political parties calling for it (not even the opposition ones) as far as I know - why I wonder?

Surely higher annual recurring taxes on zoned land is far more effective?

If I hypothetically owned development land and was sitting on a notional profit which I was watching grow. If CGT was increased massively, I definitely wouldn’t sell at a higher tax. I’d be even more inclined to sit on it until the political winds changed in the future.

Your idea seems to run on the assumption that the majority of land is currently owned with base cost = current market value and any potential growth is all in the future? Very unlikely to be true.

Post of the day :)

I said "nation" and not "country". Quite a difference…

How do you define 'value'?

If you want to plant trees or organic veg or make a park then higher CGT on land is a good thing - it will reduce land prices and make it easier to convert land to community use.

But residential zoned land is zoned specifically for development opportunities, and owners should not be rewarded for simply owning land that was rezoned. The only way to profit off of land should be if you work the land or build on the land.

Simple buying and selling of empty sites should never be a way of making money