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Ulick McEvaddv's suggestions for our property market

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  • 20-09-2009 1:01pm
    #1
    amacca
    Registered Users Posts: 6,897 ✭✭✭


    Happened to hear Ulick McEvaddy's "suggestions" for what the government should do about our property market on Marion Finucane today and I was very surprised he wasn't really challenged on it to any extent.

    It went something like this, In order to get the property market moving again the govt should......

    1) Abolish all stamp duty for 12 months
    2) refund 50% of the vat on a house purchase
    3) direct financial institutions to give out 100% mortgages (they were wrong in the past but they are exactly what is needed now!)

    I think this is tantamount to throwing petrol on a smoldering fire (do we really want it set ablaze again? + unfair on those who have paid their stamp duty already, encouraging foolish lending and borrowing practices etc)

    Should the housing market not seek its own rightful level with alterations to stamp duty etc (but nothing as extreme as this)

    Am I missing something? What do others think? Is there any merit in these suggestions or modified versions of them?


Comments

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    #2
    silverharp
    Registered Users Posts: 18,274 ✭✭✭✭silverharp


    just another clown speaking his book, anyone that advocates putting a floor under prices doesnt understand how markets "should" work. Like it or not the crash is the cure. 100% mortgages and tax subsidies were part of the mix of problems in the first place, there is no logical reason why they should be useful now.

    A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer



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    #3
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    Nothing wrong with point 1 or 2 - indeed point 1 should lead a complete scrapping and be replaced by a property tax. Point 3 is the most difficult one - 100% mortgages should only be used on property up to certain values - up to 180k outside of Dublin - 250k within Dublin or something like that.


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    #4
    amacca
    Registered Users Posts: 6,897 ✭✭✭amacca


    silverharp wrote: »
    just another clown speaking his book, anyone that advocates putting a floor under prices doesnt understand how markets "should" work. Like it or not the crash is the cure. 100% mortgages and tax subsidies were part of the mix of problems in the first place, there is no logical reason why they should be useful now.

    Thats what I thought but I am interested to see if anyone can defend his suggestions to any extent. + was surprised he wasn't eaten alive so thought I might be missing something.


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    #5
    amacca
    Registered Users Posts: 6,897 ✭✭✭amacca


    mrgaa1 wrote: »
    Nothing wrong with point 1 or 2

    How so?

    No negative consequences at all? If there are, are they balanced out by the good consequences?

    What are the good consequences? Are they as good as you think?


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    #6
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    Point 1 - stamp duty is just a tax - simple. So if they want to introduce a property tax then do so. Ireland is the only country in Europe that doesn't have one. Stamp Duty is a TAX. Removing that lump sum entity may entice some people to drop their prices and some people may purchase.
    Point 2 - If a house is worth 113,500 then 13,500 is VAT. So if the purchaser was able to get half back would that allow the purchaser to spend the money on furniture, etc... thereby releasing more money into the economy providing a stimulus

    or would you rather we sat in this rut that we're in for a long time. Something has to happen and better than talking about it lets do something. You can bet your bottom dollar that as soon as NAMA is passed that there will be incentives to purchasers via a time related tax relief to stimulate movement.


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    #7
    oceanclub
    Registered Users Posts: 3,411 ✭✭✭oceanclub


    "No to Lisbon"-voting friend of Mary Harney who _helpfully_ opens his private hospitals for him. Why anyone should listen to that muppet, I don't know.

    P.


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    #8
    jetski
    Registered Users Posts: 820 ✭✭✭jetski


    mrgaa1 wrote: »
    Nothing wrong with point 1 or 2 - indeed point 1 should lead a complete scrapping and be replaced by a property tax. Point 3 is the most difficult one - 100% mortgages should only be used on property up to certain values - up to 180k outside of Dublin - 250k within Dublin or something like that.


    Are you a home owner?


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    #9
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    I am a home owner but luckily house is fully paid for.


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    #10
    Victor
    Registered Users Posts: 78,387 ✭✭✭✭Victor


    amacca wrote: »
    1) Abolish all stamp duty
    I can go along with this, but only when a property tax (whatever form it takes) is in place. Stamp duty discourages mobility and is a hindrance to society and the market.
    amacca wrote: »
    for 12 months
    Why only 12 months? Would it be reinstated then? What deals does Mr. McEvaddy have lined up for that 12 months?
    amacca wrote: »
    2) refund 50% of the vat on a house purchase
    On current or past sales? All this will do is enrich property buyers at the expense of the exchequer deficit.
    amacca wrote: »
    3) direct financial institutions to give out 100% mortgages
    Bad precent as we have learned. People need financial responsibility and that doesn't exist if you aren't putting in any of your own money.

    I'm half of the opinion that taxes should be increase to push base prices down more, so as to encourage a bottom to the market sooner than later.


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    #11
    amacca
    Registered Users Posts: 6,897 ✭✭✭amacca


    Victor wrote: »
    Why only 12 months? Would it be reinstated then? What deals does Mr. McEvaddy have lined up for that 12 months?

    I got the distinct impression he was suggesting it as a temporary measure which made very little sense at all to me either. If he was speaking off the cuff it was pretty piss poor for someone taking up the national airwaves.

    I'm glad to say that I cannot speak for Mr McEvaddy but with the benefit of googling I feel confident in saying I'm sure he wouldn't stand to lose financially by such a change over the 12 months in question. The Ulicks of this world never do.
    Victor wrote: »
    On current or past sales? All this will do is enrich property buyers at the expense of the exchequer deficit.

    I don't think this was clarified but again I got the distinct impression he was talking about implementing the changes on current and future sales with no reference to those who bought in the past which could be a bone of contention for buyers in the recent past on top of money flowing out of the exchequer
    Victor wrote: »
    Bad precent as we have learned. People need financial responsibility and that doesn't exist if you aren't putting in any of your own money.

    Yep, I thought it was a reprehensible comment. But I thought I might be guilty of taking out the pitchfork too soon. I do think people tend to slip into the mode of angry lynch mob member all too easily these days.
    Victor wrote: »
    I'm half of the opinion that taxes should be increase to push base prices down more, so as to encourage a bottom to the market sooner than later.

    I think it will take a lot more than tax increases to encourage a bottom sooner rather than later but they would certainly contribute. Im not anxious to see them come in though for self interested income reasons + I believe there will be many more pressures pushing the price of houses down over the next 3-5 years.


    So I suppose on balance it seems that boards.ie has decided this man is a self serving fluff merchant but there is some merit to the fluff in this instance.


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