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

No you're are 100% right, there is nobody living at home who would jump at the opportunity to rent a property currently being rented to a HAP recipient if the property was made available to the private rental market.

If you cut out HAP, there would be nobody who would full these tenancies from any other current living situations. None at all.

They'd literally be private properties left empty with nobody to put in them.

Our private housing situation would be reversed from over subscribed to vastly under subscribed over night with landlords all defaulting on their mortgages.

I get your posting style now, it's fun to speak in absolutes with zero nuance.

Eh, you appear to think that the removal of all subsidies wouldn't make any difference to the rental market. We don't even need to get into "nuances" here. It's in the realm of the absurd

As I anticipated, an anecdote about a friend's cousin who can't find a place to rent isn't proof to the contrary.

The govt needs to build more council housing, including affordable and cost rental.

Landlords arent taking advantage, they are not allowed to refuse HAP tenants.

If someone on HAP can pay the market rent with the help of the HAP subsidy, the landlord cant refuse them.

If your issue is that the tenant shouldnt be getting the subsidy in the first place, how would the tenant pay the market rent, if the subsidy was removed?

What people forget was during the eviction ban post Covid only no fault evictions were stopped. If you stopped rent subsidies it would increase homeless and people could no longer afford the rental market. The only benefit any eviction ban would have is increase the amount of homes in the 2nd hand market. If you require state support this doesn't help you, it only helps those who relatively wealthy (ie able to save enough for a deposit and have a big enough income for a mortgage) renting and those living at home who also want to buy. On top of that owner occupied housing tends to have a lower occupancy level than rented. Even worse any new builds that come onto the market can be let at market rent where as older properties rented are limited by rent pressure zones making rents even more expensive. So all the idea does is reduce rental stock and increase rent costs. With the added negative that you've also increased homeless. It's a crazy idea.

I think you miss my point. LL are taking advantage as rents "record breaking high" as one housing agency advertised.

They put them up high as know government will cover the rest thanks to subsidy.

Of course the government should do all that, they haven't for over ten years and trying to catch up now but it to late for a least one or two generations of Irish people.

If suited the government and LL to keep the gravy train going and no attempt to fix this broken mess as it fills there pockets.

Lets play that out...HAP tenant 1, who now cannot afford their rent, swaps their home with a family from India, who moved into their Dublin apartment because they work at a Dublin MNC and can easily afford the rent.

Who pays the relocation cost for the Dublin HAP family to move to Mumbai, btw?

HAP tenant 2, moves into the family home of the couple that just rented their apartment. Lets hope Mr and Mrs Doyle like the new rental tenants that just moved into the family box room.

HAP tenant 3, moves their family from an apartment in Dublin to a rented room in a house in Westmeath, replacing the lad and his girlfriend that were renting the room but both work up in Dublin and can afford the 2.5k rent in the city.

Lets hope that the room the HAP tenants have just moved into can accommodate bunk beds for the 2 kids...

Do the kids need to change school now, as well as sharing a single room with their parents and a house with complete strangers?

But thats not the argument you made. You said if an eviction ban was brought in then almost all rental tenants would simply stop paying their rent.

Which is not what happened in 2022, when we have a very recent real world example of exactly this policy being brought in. So yours was very clearly a pretty ridiculous argument.

Landlords exiting the market is entirely different issue, and a very obvious attempt at moving the goalposts - but even then wouldn't be a problem at all, given the state would just step in to replace them. The state is currently buying up large numbers of new build housing, at hugely inflated cost, which it could stop doing if it was able to buy pre-existing housing stock from landlords, at depressed prices, from those apparently so desperate to exit the market.

Combine the savings from that with the €1bn a year or so from removing HAP etc and its huge savings for the state and tax payers, and huge savings for renters in general after the market resets downwards, and less upwards wage pressure / fewer recruitment problems for business owners as their predominantly younger/renting staff will have less pressure on their wages from the lower rents. Its win win win.

In the sought after areas of Dublin, why should tenants who cannot afford rent be subsidised to do so?

If without subsidies they cannot afford rent, then either their employer needs to pay them more, or rents need to drop. If as you say, desirable areas could fill all rentals with no HAP tenants then clearly those jobs in desirable areas need to pay more. Right now those employers are getting by paying poor wages because state is subsidising their employees' housing costs.

This is, of course, part of the reason why subsidies will not be going anywhere.

Stating something is overvalued is not a prediction. The overvaluation may remain and grow as a result of policy

The function of the ESRI is to

provide a strong, independent source of research evidence for policy and civil society in Ireland

There musings are to influence government policy perhaps in a move away from demand side policies to supply side measures to cool housing inflation

One could argue given there remit that there overvaluation calculation is overly conservative in order to avoid sparking a panic and avoid having a taoiseach coming out and suggesting they should commit suicide. We don't want the parallels to the last boom bust to be identical. The penny might drop

That is not quite what happened in the Irish case. The loose credit remained while house prices plateaued and just about started to fall. This was about 2006 into 2007. Prices just got so high that even with the loose credit, people were unwilling to pay more for houses. Anecdotally, the first out of the market were the new speculative investment buyers. It was a little later that credit started to tighten up.

There was a lot more to the 2008 crash than that. Banks were completely funding builders to finish developments before sale from late 2005 that is why we ended up with ghost estates, there was I think 100k+ houses in various stage of completion when credit tightened and the property investment was not just in Ireland, lads were investing in property in Eastern Europe. I know a lad still trying to develop a site in Croatia which he has from back then. There was a serious amount of people with holiday home investments that were over priced. 50%+ of the Irish economy was construction related then compared to less than 25% at present and only half of that is residential as in housing construction.

On HTB many are failing to understand the government is loading the dice in favor of FTB with there funding. Without it builders would be building for moveruppers and extensions. The allowing of the HTB in the second hand segment ( while I am not totally for it) will encourage some FTB's to look at houses in cities that are presently being bought by invectors. It will have limited effects on the market, HTB is limited to houses costing less than 500k and the FHS has lower limits as low as 325k in half the counties in Ireland.

Catching up with the last few pages of this today I think some lads went too hard on the whacky baccy over the Christmas

Very true. People were buying property in "Sunny Beach" Bulgaria and the like. But they stopped buying in Ireland because, it seems, prices were just too high to justify returns.

My post wasn't about HTB and the other things so I won't comment on those points.

The subsidies make up the difference between what the HAP tenant can afford and the market rate.

Why would jobs in a certain area need to pay more? For instance, a social housing development in Blackrock or Donnybrook has no bearing on the ability of the private renter to pay market rate rent.

If a new scheme in those areas is let to the private market, it rents without issue at market rate. 2.5k for a 2 bed etc.

If the local council decides to takeover the new scheme for social housing, then the local council has to make sure 2.5k for a 2 bed is paid to the landlord, otherwise the landlord wont lease the scheme to the council.

Why would jobs in a certain area need to pay more?

Because of cost of living. This is a thing almost universally.

Expensive parts of Paris, London, or any other city will pay more for equivalent jobs than in less expensive parts. And the cities themselves pay higher across the board compared to small cities, and towns, and then rural areas.

Why should areas within Dublin city be exceptions to this rule? You want staff in Blackrock you should pay more for the privilege, instead of having the state subsidise your workers for you.