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Property Market 2019

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  • Options
    #1502
    JDD
    Registered Users Posts: 1,578 ✭✭✭JDD


    The thing is, the cost is the cost. I wouldn't want to reduce down the standards. I've recently moved into a new build myself and my God - the insulation is just incredible. Our energy bills have literally halved for a house that 20% bigger than the one we previously rented. The sound insulation is brilliant too. It makes me feel that these houses are built to last (touch wood) and not just whacked up with crappy foundations and fire hazards all over the place, like what was built before the financial crisis.

    The planning process definitely needs to be reformed.

    Wages you can't do much about.

    Finance is something the government could do but it would be painted as taxpayers money going to subsidise developers, as would tax cuts. Only ten years out from the financial crisis I don't think that would go down well with the voting public, even if it was part of the right answer.

    I don't understand why we don't do shared equity schemes like they do in the UK?


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    #1503
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    The government makes money from financial contributions in the planning, on the VAT on the build from builder, the stamp duty, the VAT on the solicitor fees, auctioneers fees and general taxes on top of that. Maybe a reduction in VAT could bring prices down and could benefit all parties buying rather than FTB.

    But as another poster said, this will have a big effect in 20 years. People will have to retire, may not have a pension or paid off a mortgage and still need to rent and we are living for longer. And this puts pressure on the system to accomdate.

    Yes I want to buy a house. I’m not asking for a recession to buy at a low price. I don’t mind paying a reasonable affordable price. We should not be wishing that Market crashes and REITs sell quickly and get out. Other countries don’t have high ownership rates - but have a very robust rental market that’s stable and works for both landlord and tenant and can see people into old age. And that should be what the government is aiming for - a market for buying and selling that works for all involved.


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    #1504
    JDD
    Registered Users Posts: 1,578 ✭✭✭JDD


    hmmm wrote: »
    The blocks won't be built. Developers don't have the funding, and aren't going to take the chance when it's safer to build low density houses.

    The only people who will benefit are existing landlords and property owners as supply dries up.

    Are you saying that the banks are only giving them the funding when they undertake at the outset, before even submitting planning, to sell to a REIT? That's not true.

    There is enough demand out there to sell an apartment block to a mix of owner occupiers and mid-size landlords. There's no reason to block sell to a REIT except that your selling costs are reduced.

    I've read the planning permission documents for my own new housing estate, and the local authority insisted on a number of apartment blocks being built alongside the 3 & 4 bed houses. They also made the developer pack in more houses on to the site. So if developers want planning permission, they're going to have to build those apartment blocks anyway.


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    #1505
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    alwald wrote: »
    ...it's clear that the current government doesn't have a clear and solid strategy to tackle the housing crisis ....

    Oh they do. They've been doing it for a long time.

    They make a lot of noise and do nothing people in crisis. Because they don't care about those. There's no money in it.

    Create perfect conditions, for large investors. That's where the money is.


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    #1506
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    JDD wrote: »
    The sound insulation is brilliant too. It makes me feel that these houses are built to last (touch wood) and not just whacked up with crappy foundations and fire hazards all over the place, like what was built before the financial crisis

    Interesting to note. Everyone talks about the BER ratings I had wondered about sound insulation as I’ve heard it was a big issue (the lack of it) for the new builds during the boom. Glad to hear that’s being resolved.


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    #1507
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    Bluefoam wrote:
    I think you're missing my point... why would they bother funding or building affordable housing? Let people rent instead. You are working from an outdated model where people would expect to own their houses. The current model would be to use big business to fund building and provide for the masses...

    Dolbhad wrote:
    But as another poster said, this will have a big effect in 20 years. People will have to retire, may not have a pension or paid off a mortgage and still need to rent and we are living for longer. And this puts pressure on the system to accomdate.

    This is one of the reasons...the burden in the state in the future will be huge. Look at how some Nordic countries are currently struggling with the portion of their population that are retired.


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    #1508
    Bluefoam
    Registered Users Posts: 7,710 ✭✭✭Bluefoam


    alwald wrote: »
    This is one of the reasons...the burden in the state in the future will be huge. Look at how some Nordic countries are currently struggling with the portion of their population that are retired.

    I agree fully & I agree with the principal of continued property ownership by individuals... I'm not sure the govenment agree... Someone needs to make a strong arguement against the current system, but I don't see anyone taking it up.


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    #1509
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Building is quality is not down to the age of the building or the regulations.

    Its a self regulated industry. So its really down the the quality of the builder. Which is one estate will be well built and the next one not. Different builders.


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    #1510
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    beauf wrote: »
    Building is quality is not down to the age of the building or the regulations.

    Its a self regulated industry. So its really down the the quality of the builder. Which is one estate will be well built and the next one not. Different builders.

    When I was looking at the new build off plans we had budgeted for an engineer to be engaged before snagging and to go out to the property once or twice as it was going up as that was a concern of mine and it was something our solicitor recommended we do. I’ve had friends buy new builds recently with issues and there are some builders in Cork I’d have no issue buying off and some I would.

    The economy is doing well so the old excuse of no cash to invest and build on the governments side isn’t washing anymore. And I would hope since it would be for FF/FG they will have to deal with that at some point down the line that planing would take place now, it seems very unlikely.


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    #1511
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    Dolbhad wrote: »
    When I was looking at the new build off plans we had budgeted for an engineer to be engaged before snagging and to go out to the property once or twice as it was going up as that was a concern of mine and it was something our solicitor recommended we do. I’ve had friends buy new builds recently with issues and there are some builders in Cork I’d have no issue buying off and some I would.

    The economy is doing well so the old excuse of no cash to invest and build on the governments side isn’t washing anymore. And I would hope since it would be for FF/FG they will have to deal with that at some point down the line that planing would take place now, it seems very unlikely.

    There are a number of reasons the Govt don't want to build directly themselves.

    As part of our bailout we can't take anymore debt on to our national debt. Even if we get interest free loans our debt would increase.

    Evictions for non payment of mortgages, private rent or council rent is almost non existent and no politician would ever advocate for evictions, its political suicide.

    Approved housing bodies are funded by the State but are not part of our national debt and technically are not social housing so people could be evicted (theoretically) easier than a council property.

    Without doubt the housing landscape is changing, home ownership is decreasing, renting for life will be the norm for some, the same council property you get in the first instance may not be the only one you live in for your life. As the profile of your family changes so too will the accommodation the council will offer you.

    Yes the Govt don't seem to have a strategy, they are alienating 70% of landlords in favour of institutional landlords. They advocate home ownership while they do nothing to help the private tenants.

    The Govt don't really care as they will not have a majority at the next election so it will be more of the same. It can easily be compared to the Health sector and the shambles that is and has been for the last 30 yrs.

    Unless we as a society change and make tough decisions we will still be debating this in 5 or even 10 yrs time.


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    #1512
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    JDD wrote: »
    I think there's going to be an issue if four or five REITs end up owning 50-60% of new build rental apartments in the cities.

    Think of couples in their early thirties just starting families. In the past, these would be the couples buying first-time starter homes. Except those starter homes are €500k now and they don't have the salaries to cover the mortgage. So they look to buying a two or three bedroom apartment.

    When there's such price power amongst a small number of REITs (most of whom are foreign-owned) they can price fix the rental amounts. High rents attract more investors to the apartment markets - pushing the selling price up of those apartments. Suddenly, Joe and Josephine can't afford the apartments either, even if they could find a developer that is going to sell to the owner occupier market.

    So they continue to rent, paying €1500-2000 a month on 2 bed apartment. They have two kids, paying upwards of €2000 a month on childcare. Nothing left over to save more so that they have the increasing deposit required to buy a property.

    At some point prices will drop. The economy will contract. The REITs will sell. And inevitably, banks will become more conservative in their lending. But J&J are now forty, and the repayments on their now shorter term mortgage (because they are older) and their outgoings on two children means the bank will only lend them enough to buy a property on the outskirts - a starter home. They know they are forty, and wherever they buy now is where they are going to live for the rest of their lives. Their kids are in the local school. They've put down roots where they are renting. So they decide to stay.

    There are loads of single people, couples and families like this that I know. Fast forward 20 years, when they retire, we are going to have a MASSIVE problem. Their pensions (if they have one) won't cover continuing to pay rent. Even a gold-plated pension with 40 years service only pays 2/3 of your salary, on the assumption that your mortgage will be paid off. There's going to be a lot of people turning to social welfare, and not enough workers to subsidise that. So you, and me, in 20 years are going to be forking out a ****load more in tax to cover this.

    And the REITs will have well gone back to the Canada and the UK, rolling in their rental cash.

    So no, I don't think block-selling to a small amount of REITs for the purposes of providing supply to the rental market is a solution to anything.


    The "Fast forward 20 years bit" is what makes this an emergency situation and which is why the housing crisis should be treated as such. Right now we have older people sitting in mortgage-free properties that are many multiples what they paid for them who are basically sucking the wealth from the current younger, tax-paying workers and future generations who themselves won't be the fat-cat landowners the current grey generation are as the State will not be able to afford the welfare required to sustain so many people in housing, healthcare, free travel etc.


    The governments measures need to be implemented on the basis that we are in an emergency situation and they are not adopting this attitude. The government needs to get rid of tax efficiencies for institutional landlords, reduce taxes private landlords pay and make it far easier to remove tenants for not paying rent.

    Unless drastic measures are taken, an international recession would be required in order benefit Ireland's housing crisis as investors pull their money and move to more stable investments.


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    #1513
    Bluefoam
    Registered Users Posts: 7,710 ✭✭✭Bluefoam


    Assetbacked wrote: »
    The "Fast forward 20 years bit" is what makes this an emergency situation and which is why the housing crisis should be treated as such. Right now we have older people sitting in mortgage-free properties that are many multiples what they paid for them who are basically sucking the wealth from the current younger, tax-paying workers and future generations who themselves won't be the fat-cat landowners the current grey generation are as the State will not be able to afford the welfare required to sustain so many people in housing, healthcare, free travel etc.


    The governments measures need to be implemented on the basis that we are in an emergency situation and they are not adopting this attitude. Therefore, an international recession would be required in order benefit Ireland's housing crisis as investors pull their money and move to more stable investments.

    Oh FFS. Those people who are basically sucking the wealth from you have probably worked all their lives for what they have. They paid up to 18% interest rates and bought houses at very high prices in their day... Inflation was coming at incredible rates... They gave you free education and free health care, improved the ecomony for you...

    Stop being so ****ing whiney. There is a miserable younger generation who think that they are being treated badly for the benefit of everyone else... Well, everyone has had it hard, get on with it, make your own way & stop moaning about what others have.


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    #1514
    Jaster Rogue
    Registered Users Posts: 175 ✭✭Jaster Rogue


    Assetbacked wrote: »
    The "Fast forward 20 years bit" is what makes this an emergency situation and which is why the housing crisis should be treated as such. Right now we have older people sitting in mortgage-free properties that are many multiples what they paid for them who are basically sucking the wealth from the current younger, tax-paying workers and future generations who themselves won't be the fat-cat landowners the current grey generation are as the State will not be able to afford the welfare required to sustain so many people in housing, healthcare, free travel etc.


    The governments measures need to be implemented on the basis that we are in an emergency situation and they are not adopting this attitude. The government needs to get rid of tax efficiencies for institutional landlords, reduce taxes private landlords pay and make it far easier to remove tenants for not paying rent.

    Unless drastic measures are taken, an international recession would be required in order benefit Ireland's housing crisis as investors pull their money and move to more stable investments.


    Just out of interest, what would you consider a more stable investment than property?


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    #1515
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Bluefoam wrote: »
    Oh FFS. Those people who are basically sucking the wealth from you have probably worked all their lives for what they have. They paid up to 18% interest rates and bought houses at very high prices in their day... Inflation was coming at incredible rates...

    Stop being so ****ing whiney. There is a miserable younger generation who think that they are being treated badly for the benefit of everyone else... Well, everyone has had it hard, get on with it, make your own way & stop moaning about what others have.

    Truth hurts, clearly.


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    #1516
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Jaster Rogue wrote: »
    Just out of interest, what would you consider a more stable investment than property?

    Highly-rated fixed income securities like government bonds that would be less risky than property investments, particularly if there was a recession environment.


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    #1517
    Bluefoam
    Registered Users Posts: 7,710 ✭✭✭Bluefoam


    Assetbacked wrote: »
    Truth hurts, clearly.

    WTF... I'm in the same boat. Trying to buy a house to live in. Difference is, that I'm not worried about what other people have and what I think I should deserve. I'm just working hard and struggling by like everyone else. Who the **** are you to complain about older people who are benefitting from a life of hard work?


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    #1518
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Bluefoam wrote: »
    WTF... I'm in the same boat. Trying to buy a house to live in. Difference is, that I'm not worried about what other people have and what I think I should deserve. I'm just working hard and struggling by like everyone else. Who the **** are you to complain about older people who are benefitting from a life of hard work?


    If measures were taken now which resulted in current average house prices dropping 40% (which would be more sustainable), would you have an issue with that?


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    #1519
    alwald
    Registered Users Posts: 1,283 ✭✭✭alwald


    The Student wrote:
    As part of our bailout we can't take anymore debt on to our national debt. Even if we get interest free loans our debt would increase.

    Why take a debt when there is a massive budget for housing overall? Shouldn't this miserable government use those funds to build more?

    Other than that I agree with the fact that this government isn't going to do anything and that next elections are key.


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    #1520
    Bluefoam
    Registered Users Posts: 7,710 ✭✭✭Bluefoam


    Assetbacked wrote: »
    If measures were taken now which resulted in current average house prices dropping 40% (which would be more sustainable), would you have an issue with that?

    By measures, do you mean a massive recession? You do realise that a big drop in property prices (like 40%) would mean a huge economic crash & people like you will not benefit from that in the way you think. The wealthy people with more than you will benefit, and they will buy the cheap property. Before you know it the prices will increase through normal economic growth and you'll be back at square one.

    The fact is this... Property is selling, even though the price is high. people are buying it & can afford to buy it. People who can afford the property are driving the house prices. If that doesn't include you, then you need to become one of those people.

    Property prices will always increase. inflation will continue... until mother nature interjects and it won't matter anymore.


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    #1521
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,046 Mod ✭✭✭✭AlmightyCushion


    alwald wrote: »
    Why take a debt when there is a massive budget for housing overall? Shouldn't this miserable government use those funds to build more?

    Other than that I agree with the fact that this government isn't going to do anything and that next elections are key.

    What funds? The state is still running a deficit so for the state to fund building we'd need to borrow for it.


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    #1522
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Assetbacked wrote: »
    ...Right now we have older people sitting in mortgage-free properties that are many multiples what they paid for them who are basically sucking the wealth from the current younge...

    Maybe you'll explain how they are sucking wealth from the younger generations???

    Give it 30 yrs and consider its you, facing huge property tax, perhaps poll tax, rates etc and massive health insurance bills, nursing home fees of 100k a year, and all pensions raided until they are worth nothing.

    I think you might realise that is not the older generations, but the Govts you've voted in that are sucking your wealth from you.


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    #1523
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Bluefoam wrote: »
    By measures, do you mean a massive recession? You do realise that a big drop in property prices (like 40%) would mean a huge economic crash & people like you will not benefit from that in the way you think. The wealthy people with more than you will benefit, and they will buy the cheap property. Before you know it the prices will increase through normal economic growth and you'll be back at square one.

    The fact is this... Property is selling, even though the price is high. people are buying it & can afford to buy it. People who can afford the property are driving the house prices. If that doesn't include you, then you need to become one of those people.

    Property prices will always increase. inflation will continue... until mother nature interjects and it won't matter anymore.


    Ignoring the "property prices will always increase" outrageous claim;


    I would say measures as in a big increase in apartments and houses being built and being available for purchase by individuals as opposed to institutionals, as well as greater incentives for private landlords to enter the market again. If there was plentiful supply and it resulted in current house prices dropping around 40% of the current averages, this is surely a good thing?


    "Wealthy people" are not wealthy because they sit on mountains of cash, often it is assets which make them wealthy so I don't agree that an international recession would result in wealthy people snapping up all the property.


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    #1524
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    beauf wrote: »
    Maybe you'll explain how they are sucking wealth from the younger generations???

    Give it 30 yrs and consider its you, facing huge property tax, perhaps poll tax, rates etc and massive health insurance bills, nursing home fees of 100k a year, and all pensions raided until they are worth nothing.

    I think you might realise that is not the older generations, but the Govts you've voted in that are sucking your wealth from you.

    By having to borrow many multiples of their salary just to give to a property owner, indebting themselves to a bank for decades in the process. Pumping so much money into property via rent or a mortgage is such a waste.


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    #1525
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    You are complaining that people buying property and having it appreciate are blocking those who want to buy.

    But those unable to buy they did manage to buy then are they not doing exactly the same thing?


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    #1526
    Mickiemcfist
    Registered Users Posts: 1,585 ✭✭✭Mickiemcfist


    Assetbacked wrote: »

    "Wealthy people" are not wealthy because they sit on mountains of cash, often it is assets which make them wealthy so I don't agree that an international recession would result in wealthy people snapping up all the property.

    Have you just landed in Ireland, or just got a newly found interest in the Irish property market? Have a read up on what has been happening over the last decade...


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    #1527
    Bluefoam
    Registered Users Posts: 7,710 ✭✭✭Bluefoam


    Assetbacked wrote: »
    Ignoring the "property prices will always increase" outrageous claim;


    I would say measures as in a big increase in apartments and houses being built and being available for purchase by individuals as opposed to institutionals, as well as greater incentives for private landlords to enter the market again. If there was plentiful supply and it resulted in current house prices dropping around 40% of the current averages, this is surely a good thing?


    "Wealthy people" are not wealthy because they sit on mountains of cash, often it is assets which make them wealthy so I don't agree that an international recession would result in wealthy people snapping up all the property.

    lol... I don't know what to do with this... These are exactly (some of) the conditions that created that last recession. It doesn't work. It hasn't worked, thats why they stopped it. It litterally caused death and destruction.


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    #1528
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Assetbacked wrote: »
    By having to borrow many multiples of their salary just to give to a property owner, indebting themselves to a bank for decades in the process. Pumping so much money into property via rent or a mortgage is such a waste.

    At some point someone has had to do that to get a property.

    Its the cycle of life.

    Even if you are are anti inherited wealth you'll see that over a few generations unless someone is able to generate income to maintain that wealth, it will eventually dissipate.


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    #1529
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Mickiemcfist wrote: »
    Have you just landed in Ireland, or just got a newly found interest in the Irish property market? Have a read up on what has been happening over the last decade...

    Last 30 yrs more like.


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    #1530
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    beauf wrote: »
    You are complaining that people buying property and having it appreciate are blocking those who want to buy.

    But those unable to buy they did manage to buy then are they not doing exactly the same thing?

    I'm not saying it is they themselves but a system which pervades allowing them to benefit disproportionately. This article explains it quite well http://www.davidmcwilliams.ie/contented-classes-could-be-biggest-threat-to-irish-economy/


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    #1531
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    beauf wrote: »
    Maybe you'll explain how they are sucking wealth from the younger generations???

    Give it 30 yrs and consider its you, facing huge property tax, perhaps poll tax, rates etc and massive health insurance bills, nursing home fees of 100k a year, and all pensions raided until they are worth nothing.

    I think you might realise that is not the older generations, but the Govts you've voted in that are sucking your wealth from you.

    The ironic thing is that, if I was caught in the rental crisis until my 40s, I won't actually have to worry about the above as I won't have any security into retirement meaning the State will have to pick up the tab.


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