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Alternative Financing for the Property Market?

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  • 26-09-2020 7:32pm
    #1
    smellyoldboot
    Banned (with Prison Access) Posts: 1,075 ✭✭✭


    Cyrus wrote: »
    The only depraved greed I’ve seen in this thread is the recession cheerleaders to be honest, how anyone could a) be happy about this and b) assume they will be unaffected and able to buy the house they want is beyond me.

    So, we are currently funding via the Exchequer the HTB scheme, the only barely functioning Rebuilding Ireland scheme, Obscene HAP payments and paying "market" rates for social housing often in upscale private developments.

    And worse is to come, remember you are not only paying over the odds for your own house, you are also paying by proxy(taxation) for the all the other wacky schemes.

    And somehow all of this is more acceptable than letting developers who overstretched themselves fall on their swords, or enacting a legal system that actually punishes people for making terrible financial decisions.


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    #2
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    KnowingWind wrote: »
    Anyone have any stats on just how much residential property is held by big investors?

    I really think this is a big factor in discussing future prices.

    How many investors may move elsewhere, leaving particularly Dublin drastically effected.

    Don't have the figures but the councils and housing agencies who are effectively cash buyers pay the market rate for houses to provide social housing and they have a blank cheque. So buyers are competing with government funding which is nearly endless. I have said this before it's done to keep house prices inflated.


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    #3
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    smellyoldboot wrote:
    And somehow all of this is more acceptable than letting developers who overstretched themselves fall on their swords, or enacting a legal system that actually punishes people for making terrible financial decisions.


    ....behind every bad borrower, is a bad lender!


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    #4
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    ....behind every bad borrower, is a bad lender!

    The government should be lending, not the banks. It all amounts to the same thing just cheaper in the long run. People have to be housed one way or the other.


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    #5
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote:
    The government should be lending, not the banks. It all amounts to the same thing just cheaper in the long run. People have to be housed one way or the other.


    The state should be funding it via its own methods of money creation, partially anyway


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    #6
    cubatahavana
    Registered Users Posts: 990 ✭✭✭cubatahavana


    Claw Hammer wrote: »
    What would you expect to be asked for that in Mount Merrion?

    No idea. I really have no clue of what is considered a good (or even acceptable) garden by Ireland standards. I grew up in an apartment, so for me 80sqm is perfect


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    #7
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    The state should be funding it via its own methods of money creation, partially anyway

    It should it can borrow money for nearly free. Credit unions sitting there if they were used they could do what they were set up to do.

    What happens now is some loses their home council go out and buy in the private sector at inflating prices to rehouse. The bank takes the home eventually and now we the tax payer fund the rehousing. For basic living be it a starter apartment or 3-bed semi government should be directly involved.

    If you want a nice house in Dalkey then deal with the banks.

    Very similar to health or the old-age pension it not perfect but if you want something better go to the private market for it but for basic, the gov should be involved and housing is about as important as it gets.


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    #8
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote:
    It should it can borrow money for nearly free. Credit unions sitting there if they were used they could do what they were set up to do.


    All these methods are valid, and should be done, but our government is primarily economically conservative, so are hard wired towards idiotic things such as balancing budgets etc. We could also create our own public banks to partially fund our infrastructure needs, but again, as above......


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    #9
    MacronvFrugals
    Registered Users Posts: 1,014 ✭✭✭MacronvFrugals


    The Belly wrote: »
    It should it can borrow money for nearly free. Credit unions sitting there if they were used they could do what they were set up to do.

    What happens now is some loses their home council go out and buy in the private sector at inflating prices to rehouse. The bank takes the home eventually and now we the tax payer fund the rehousing. For basic living be it a starter apartment or 3-bed semi government should be directly involved.

    If you want a nice house in Dalkey then deal with the banks.

    Very similar to health or the old-age pension it not perfect but if you want something better go to the private market for it but for basic, the gov should be involved and housing is about as important as it gets.


    But but but economic religion


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    #10
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    MacronvFrugals wrote:
    But but but economic religion


    Its a cult!


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    #11
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    All these methods are valid, and should be done, but our government is primarily economically conservative, so are hard wired towards idiotic things such as balancing budgets etc. We could also create our own public banks to partially fund our infrastructure needs, but again, as above......

    It's by design. IF they did the right thing then house prices would fall. Too many vested interests. In oz car insurance is a gov thing here well it depends on the insurance companies mood and we get 40% increase or no car insurance. I said early that I don't believe in too much state intervention but with certain basic key needs, there should be.

    What baffles me is why the gov arent borrowing when rates are practically zero and why they are not putting the economy on steroids to keep the ship going and ready for the rebound.


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    #12
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    MacronvFrugals wrote: »
    But but but economic religion

    Its all bo..oclolgy economics is good for the post mortem only but f..k all good for the here and now.:)


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    #13
    MacronvFrugals
    Registered Users Posts: 1,014 ✭✭✭MacronvFrugals


    The Belly wrote: »
    It's by design. IF they did the right thing then house prices would fall. Too many vested interests. In oz car insurance is a gov thing here well it depends on the insurance companies mood and we get 40% increase or no car insurance. I said early that I don't believe in too much state intervention but with certain basic key needs, there should be.

    What baffles me is why the gov arent borrowing when rates are practically zero and why they are not putting the economy on steroids to keep the ship going and ready for the rebound.

    At near negative rates a serious consideration should be given to a sovereign wealth fund.


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    #14
    hometruths
    Registered Users, Subscribers Posts: 5,797 ✭✭✭hometruths


    The Belly wrote: »
    The government should be lending, not the banks. It all amounts to the same thing just cheaper in the long run. People have to be housed one way or the other.

    Rather than borrowing billions to lend I'd rather see the government borrow billions to establish a social housing REIT - i.e borrow to become a landlord not a banker.

    Keep HAP, Scrap all HTB, long term leases with landlords, and other costly supports and start establishing a stock of social housing, building and buying, that can be used for generations.

    Take a long term view of it, rather than all this short termism band-aid meddling, that is just making things worse.


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    #15
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote:
    What baffles me is why the gov arent borrowing when rates are practically zero and why they are not putting the economy on steroids to keep the ship going and ready for the rebound.


    Its ideological based, they and their advisor's don't realise there wrong doings and the serious failures in their thinking, they re not doing it in spite, or to screw people over


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    #16
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    MacronvFrugals wrote: »
    At near negative rates a serious consideration should be given to a sovereign wealth fund.

    Money tied up in the banks no return and the banks are shaky at best. I do agree with you. Last time we had a pension reserve fund though it was raided. It would have to be ring-fenced and take a referendum to be touched.


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    #17
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    schmittel wrote: »
    Rather than borrowing billions to lend I'd rather see the government borrow billions to establish a social housing REIT - i.e borrow to become a landlord not a banker.

    Keep HAP, Scrap all HTB, long term leases with landlords, and other costly supports and start establishing a stock of social housing, building and buying, that can be used for generations.

    Take a long term view of it, rather than all this short termism band-aid meddling, that is just making things worse.

    i don't disagree with you at all what I was trying to say was you need to take the vested interests out of the market up to a certain level.


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    #18
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    MacronvFrugals wrote:
    At near negative rates a serious consideration should be given to a sovereign wealth fund.


    Swf's should be created for many reasons, but this is ireland!


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    #19
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote:
    Money tied up in the banks no return and the banks are shaky at best. I do agree with you. Last time we had a pension reserve fund though it was raided. It would have to be ring-fenced and take a referendum to be touched.


    Deposits aren't used directly in the process of lending, but are required for it


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    #20
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    Deposits aren't used directly in the process of lending, but are required for it

    Yes, fractional lending was and is the cause of banking crises. A smarter way would be if you have 10k or 500k you can invest in housing with a gov backed rate of return no different the solidarity bond. I can't remember off the top of my head the amount that is on deposit.


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    #21
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote:
    Yes, fractional lending was and is the cause of banking crises. A smarter way would be if you have 10k or 500k you can invest in housing with a gov backed rate of return no different the solidarity bond. I can't remember off the top of my head the amount that is on deposit.


    Fractional reserve is a myth, it's not how our system works at all, deposits are not used as a part of lending, but are a critical function of the banking system as reserves, loans are backed by our promise to repay.


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    #22
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Mod Note

    Thread Split


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    #23
    MacronvFrugals
    Registered Users Posts: 1,014 ✭✭✭MacronvFrugals


    The Belly wrote: »
    Money tied up in the banks no return and the banks are shaky at best. I do agree with you. Last time we had a pension reserve fund though it was raided. It would have to be ring-fenced and take a referendum to be touched.

    It just seems like there's no imagination at all.

    It gives every citizen in the state a stake in something.


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    #24
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    MacronvFrugals wrote: »
    It just seems like there's no imagination at all.

    It gives every citizen in the state a stake in something.

    Returns rise and fall but a least your making a few bob and moving the country forward. Solve a lot of reliance on outside finance too, I wonder what yields would be then on the open market when a country finances itself. But as was said no stomach for it on the political front afraid for their lives that we just might be able to manage things ourselves.


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    #25
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote:
    Returns rise and fall but a least your making a few bob and moving the country forward. Solve a lot of reliance on outside finance too, I wonder what yields would be then on the open market when a country finances itself. But as was said no stomach for it on the political front afraid for their lives that we just might be able to manage things ourselves.


    We probably will always be relient to some extent on partial funding from the markets, but it's disturbing that there's little or no interest in partial self funding, our economically conservative government is defaulting again to the usual, increasing private debt and encouraging the spending of savings, this is exactly what caused the crash in 08.


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    #26
    Claw Hammer
    Registered Users Posts: 6,160 ✭✭✭Claw Hammer


    cubatahavana wrote: »
    No idea. I really have no clue of what is considered a good (or even acceptable) garden by Ireland standards. I grew up in an apartment, so for me 80sqm is perfect

    You defined what you think is an acceptable garden by your standards. I asked you what you would expect to be asked to pay for a house with such a garden in Mount Merrion. Given that it was proposed that €500,000 would be enough to buy a four bed semi in turnkey condition in any part of the country.


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    #27
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    We probably will always be relient to some extent on partial funding from the markets, but it's disturbing that there's little or no interest in partial self funding, our economically conservative government is defaulting again to the usual, increasing private debt and encouraging the spending of savings, this is exactly what caused the crash in 08.

    It just a wealth transfer. From those that don't have it to those that do.


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    #28
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote: »
    It just a wealth transfer. From those that don't have it to those that do.

    but we currently cannot sustain our economy on our own, we require access to the bond markets, in order to survive, but we could help ourselves by creating our own financial institutions, and borrow from ourselves, but this to has limitations and introduces its own risks


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    #29
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    but we currently cannot sustain our economy on our own, we require access to the bond markets, in order to survive, but we could help ourselves by creating our own financial institutions, and borrow from ourselves, but this to has limitations and introduces its own risks

    There should be no need for the private bond markets ECB is there for that purpose. Outside of that domestic money be it pensions or savings should be used with gov backing for big projects rather than invested in foreign pension and investment funds. Basically recycle it in Ireland for the benefit of the country. Long term plan but far more sustainable.


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    #30
    Wanderer78
    Registered Users Posts: 28,805 ✭✭✭✭Wanderer78


    The Belly wrote: »
    There should be no need for the private bond markets ECB is there for that purpose. Outside of that domestic money be it pensions or savings should be used with gov backing for big projects rather than invested in foreign pension and investment funds. Basically recycle it in Ireland for the benefit of the country. Long term plan but far more sustainable.

    ...but its not what we have, 100% self financing is currently not possible, but as said, we could produce some ourselves, by using our national assets and savings, as reserves, to produce some money ourselves, as credit, but it would be critical to try pay back these loans to ourselves, or face possible contagion


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    #31
    The Belly
    Registered Users Posts: 572 ✭✭✭The Belly


    Wanderer78 wrote: »
    ...but its not what we have, 100% self financing is currently not possible, but as said, we could produce some ourselves, by using our national assets and savings, as reserves, to produce some money ourselves, as credit, but it would be critical to try pay back these loans to ourselves, or face possible contagion

    Yes well ECB is there for the long-term finance but the less we have to borrow the better. There is plenty of money here tied up in nothing deposits when it could be put to better use.


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