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

I would agree for FTB only, taxpayer subsidies are a far greater risk to inflating the bubble. These subsidies are not available to the next buyer of your home and the less you earn the more you can draw making the taxpayer the sub prime lender of this cycle

Cash buyer….

How would you define this? I was bidding on a property, another cash buyer appeared, starting outbidding me.

I am a cash buyer, but is someone with mortgage approval also described as a cash buyer?

4 out of 10 people are cash buyers.

Then there's plenty of people sitting on 500 + in cash.

Well you yourself are a cash buyer so why are you surprised?

All vulture funds/investment buyers/local authorities would also be seen as cash buyers.

If you had 800k, you could put it into a savings account and get 2.25% for no risk.

Only 100k of that is guaranteed by the central bank, so 'no risk' it certainly is not.

That 2.25% interest is also subject to 33% DIRT bringing it down to 1.5%.

You are not a serious debater, that is for sure.

And your equity in a property is guaranteed? And its tax free?

One could split your 800k over numerous savings accounts. One could also put it into state savings, which IS guaranteed by the government AND tax free….

The point? There are many easier ways to get some passive income than property.

If property was such a winner, where are all the investors?

rent increases capped at general rate of inflation willl not be enough to stimulate development.

Replacing the 2% annual rent increase limit in RPZs with an inflation cap will make little or no difference. After all the ECB's target inflation rate is 2% (or maybe slightly less) and they are beyond the control of any future left-wing Irish government, and will likely deliver on this over the medium term.

The real problem will be in allowing reset to market rents when a tenant leaves. This will creat a huge incentive to evict or cajole existing tenants to quit. At very least the PRTB and maybe the courts will be overwhelmed with disputes and litigation.

Don't get me wrong: rent controls are in general a disaster, whose full negative effects only become serious after several years. Getting out of this hole is a really dificult process, and losers are an inevitability.

My own feeling is it should always have been tied to inflation. When the RPZ's were introduced and the 2% rate applied inflation was running at 0%, that was unfair on tennants. Similarly when inflation was double-digit it was unfair to landlords. This means in recessionary/deflationary times, rents will by law come down. That can only be a good thing for renters

The EUs inflation rate target is 2% but that is only a target that might naturally get missed. I see no reason for landlords or tennants to be out-of-pocket for missed EU targets.

Not sure about allowing current tennancies to reset to the market rate part of the proposals. In theory there should be no difference between the market rate and the rent being paid, but there is. At the very least this highlights a huge flaw in the way market rate is determined

More supply would make all this a non-issue but the government either don't want to increase supply or are just incapable buffoons, or perhaps both, so let's just all bear this in mind firstly and foremostly

6 year limit, new elections in 5 years, would suggest kicking the can down the road and making it somebody elses problem

The RPZ's were introduced because tennants in some areas were facing 30% rent increases. I myself was "lucky" enough to only have had a 13% increase pushed on me, on the back of 0% inflation, just a few months before they were introduced. If landlords weren't as greedy they never would have been an issue, so really only have themselves to blame

In theory if everybody abided by the market rent everybody would pay and be paid more-or-less the same and there would be no increases or decreases. Is that really what you want?

I'm not sure what tax/RTB hikes landlords had, perhaps you could elaborate? The issue of insurance is another one the govt couldn't care less about

If tenants were facing 30% increase that would be because the market rate was more than 30% below the market rate.You may not be aware but rules already existed about rent increases. If it was just to stop increases to existing tenants why then did they make it transferable to new tenants. It was never about the tenants but about keeping the figures down for the government to look better. If you weren't aware of the introduction of PRTB and charges along with changes to the tax rules then you really don't know the history of the renal market and shouldn't be so sure you know how or why there are issues.

Tenants leave property all the time no matter what the rent is. Just had a tenant leave where she was paying 500 a month for a room in a 3 bed apartment just off Merrion Square. Other tenants in the same building pay 1000 a month for a room. How many years will it take to catch up to that rent? The answer is never under current rules. If the property is sold there is a huge tax bill and it is worth less to investors as a result.

I presume you mean what the tennant was paying was 30% below market rates? The point of limiting the amount a landlord can raise prices by is to keep rents low. The amount that could be increased was locked to the property, this was to stop a landlord selling the property and the new landlord upping the rent as he or she sees fit. Similarly it stopped landlords from evicting somebody for a frivolous reason and then getting a new tennancy in on a higher rate

The rules before the rent pressure zones were that you couldn't charge more than the rent in your area but then a new home would come up for rent and you could then "benchmark" your own tennancy against it with the result that rents raised as fast as landlords wanted it to. If we go back to that system we would have 100%+ rental increases overnight

When you sell a house you pay capital gains taxes and solicitor fees. You don't pay a "huge tax bill" by comparison to investing in shares for example