Should the working man be able to afford a house?

Eric Cartman

this thread is turning into a marxist lovein.

should the working man be able to afford a house - yes, if they work hard and make enough money.

should the government intervene to 'help' the working man / regulate prices etc.. - no

should house prices continue to be the freeforall that they are - yes

should Ireland build more 'social' housing - no , how about cutting rent allowance to remove the artificial floor for rent...

The best thing Ireland could do for 'affordable' housing is to remove half the planning restrictions and zoning laws in place. This would certainly encourage more people to build houses and ease demand. It would also mean not being limited to terrible looking dormer bungalows in kildare.

cookie1977

Eric Cartman wrote: »

this thread is turning into a marxist lovein.

should the working man be able to afford a house - yes, if they work hard and make enough money.

should the government intervene to 'help' the working man / regulate prices etc.. - no

should house prices continue to be the freeforall that they are - yes

should Ireland build more 'social' housing - no , how about cutting rent allowance to remove the artificial floor for rent...

The best thing Ireland could do for 'affordable' housing is to remove half the planning restrictions and zoning laws in place. This would certainly encourage more people to build houses and ease demand. It would also mean not being limited to terrible looking dormer bungalows in kildare.

What about the person that was prudent when they bought their house but due to the bail out and cuts to wages to support bank bailouts/job losses, increased taxes and new taxes is now struggling to keep going with their mortgage despite the fact that they had in excess of what they needed initially to buy their property. It is dishonesty/disrespectful to think that all those struggling now were solely responsibly for the hole they are now in.

Eric Cartman

cookie1977 wrote: »

What about the person that was prudent when they bought their house but due to the bail out and cuts to wages to support bank bailouts/job losses, increased taxes and new taxes is now struggling to keep going with their mortgage despite the fact that they had in excess of what they needed initially to buy their property. It is dishonesty/disrespectful to think that all those struggling now were solely responsibly for the hole they are now in.

a very loaded question there . While I do not agree with the increases in taxes and unfortunate situation with paycuts (we should have cut the social welfare budget and all foreign aid to get out of debt) , when taking out any mortgage these things should have been factored in. With a paycut and tax increases I would say a lot of working people are down maybe 20% overall in their takehome pay. Nobody should ever have taken out a mortgage with repayments that could not survive that kind of hit.

House pricing is all about supply and demand. If the government were not supplying houses , people would find a way to sell houses to accommodate the demand within most peoples financial constraints. The people I feel sorry for the least though are those who took out 100+% mortgages on overinflated house prices, the banks didn't force them to sign anything , nobody held a gun to them, and now they whinge because they could barely afford the mortgage at the time and now their house is worth practically nothing, they only had themselves to blame for that. Basic logic could have told anyone that 2006 house prices were ridiculous and impossible to maintain.

cookie1977

Eric Cartman wrote: »

a very loaded question there . While I do not agree with the increases in taxes and unfortunate situation with paycuts (we should have cut the social welfare budget and all foreign aid to get out of debt) , when taking out any mortgage these things should have been factored in. With a paycut and tax increases I would say a lot of working people are down maybe 20% overall in their takehome pay. Nobody should ever have taken out a mortgage with repayments that could not survive that kind of hit.

House pricing is all about supply and demand. If the government were not supplying houses , people would find a way to sell houses to accommodate the demand within most peoples financial constraints. The people I feel sorry for the least though are those who took out 100+% mortgages on overinflated house prices, the banks didn't force them to sign anything , nobody held a gun to them, and now they whinge because they could barely afford the mortgage at the time and now their house is worth practically nothing, they only had themselves to blame for that. Basic logic could have told anyone that 2006 house prices were ridiculous and impossible to maintain.

For example, civil service pay cuts have been approximately between 7-10% to date, that's excluding USC not to mention LPT and Household charges and the up and coming water charges. On top of that you have increasing variable rates on mortgages despite the continued reduction of ECB rates. Never mind the job losses in the private sector that are as a result of decreased domestic economic activity. The highest variable rate being approximately 5.5% which is 5% above the ECB rate solely because Irish banks decided to gamble on trackers to theirs and the countries detriment. You dont need to have taken out a 100% mortgage (which would have been crazy) to be in trouble now, in fact an 80% mortgage and acquiring a child or 2 since then should see you at the very least having to make dramatic changes to your lifestyle just to maintain payments.

There are lots of people in trouble for a variety of reasons and to shove them all in to a single "it's your own fault" tag is unfair and unjust.

Re social welfare. It is too high but as that "wage" of (I think) 190 per week, is essentially the bottom of the earnings in the country then everything is priced to this rate and it would be unfair and unworkable to suddenly just arbitrarily cut the social welfare to something more realistic now(say 50 euro per week). We never should have seen the sudden and dramatic rises in social welfare during the boom to begin with as any reorganisation of social welfare payments would be extremely painful and potentially be unworkable for those on it. Remembering we've already seen cuts to job seekers and job benefits allowances time periods.


There is no way in hell most people could have factored all of these possibilities in during the boom when taking out a mortgage.

the_syco

cookie1977 wrote: »

It is dishonesty/disrespectful to think that all those struggling now were solely responsibly for the hole they are now in.

That they are not responsible for lying about how much they could really afford?

cookie1977

the_syco wrote: »

That they are not responsible for lying about how much they could really afford?

Not everyone lied. Do you believe that they did?

Snakeblood

the_syco wrote: »

That they are not responsible for lying about how much they could really afford?

The unemployment rate did leap hugely. They may well not have been lying at the time. Someone in construction was simultaneously fuelling and profiting from the bubble, until the bubble popped.

Victor

Can we stick to the topic at hand?

Moderator

Victor

gurramok wrote: »

For Dublin...What happened in the bubble was that an apartment\house could only be afforded by a couple, single buyers were locked out.

Why does a single person need to be able to afford a 3-bed semi?

In the old days, a single buyer could afford a house as well as an apartment on his\her own with a big deposit saved up.

Two properties?

Also the size of the accommodation on offer has shrunk post bubble as new houses were built smaller than houses from the 80s for example.

I think that is a fairly nebulous idea. Are you comparing a 1980s 3/4-bed to a 2000s 2-bed? Importantly, household sizes have fallen, with half the population now in households having 1-3 people. http://www.cso.ie/quicktables/GetQuickTables.aspx?FileName=CNA29.asp&TableName=Private+Households+by+size&StatisticalProduct=DB_CN

On income, a working class worker should be able to afford a house in a working class area. Likewise for a middle class worker in a middle class area. We can argue what defines working class and middle class incomes till the cows come home but your income should reflect your ability to afford a "home" in a particular area.

I disagree. The population has grown by 50% since 1971, combined with a smaller household size means that there are twice as many homes now as then. Gentrification aside and assuming a "middle class area" is somewhat static, where are all the extra households to go?

hfallada wrote: »

Social housing is something you should live in temporarily as you are recently unemployed and cant afford rent. It should not be something that is passed down from generation to generation like it is at the moment.

Read my previous post. Taking all the unemployed people and sticking them in one place doesn't work, it never works. Displacing people from their surroundings and socio-economic supports doesn't work. What may work is more novel approaches to housing associations where people own shares and can 'downsize' their property and move down the street / corridor if they have financial difficulties.

Eric Cartman wrote: »

should the government intervene to 'help' the working man / regulate prices etc.. - no

Certain protections are needed, certainly on public health / safety (building regulations and the like) and consumer grounds (they should ban mortgages over about 95% and tax below-cost mortgages).

should house prices continue to be the freeforall that they are - yes

I disagree. The tax system should be re-framed to be counter-cyclical. The current boom-bust cycle promotes short-termism and is incredibly destructive, with vast number of people unemployed.

The best thing Ireland could do for 'affordable' housing is to remove half the planning restrictions and zoning laws in place.

So we can have more housing estates in the middle of nowhere? Which would cost the state vast amounts of money to service?

StillWaters

Victor wrote: »

What may work is more novel approaches to housing associations where people own shares and can 'downsize' their property and move down the street / corridor if they have financial difficulties.

Or they have life changes such as a growing family / separation / retirement. I really like this idea, are you aware of any such models in existence?

Glenbhoy

Pawwed Rig wrote: »

The government has no place in a marketplace.

If only, unfortunately the artificial restriction of supply resulting from the implementation of planning legislation over the past 50/60 yrs will pretty hard to row back on.

Not saying that planning legislation isn't required, but pointing out that as long as such exists and given that it is the single most important factor in pricing, how can a govt not be interfering?

gaius c

The best thing Ireland could do for 'affordable' housing is to remove half the planning restrictions and zoning laws in place.

Victor wrote: »

So we can have more housing estates in the middle of nowhere? Which would cost the state vast amounts of money to service?

I think he's referring to planning restrictions in Dublin city centre rather than outside.

Someday people in positions of authority might cop onto the fact that having two storey houses a stones throw from O'Connell st is part of the reason why their children have to live in Newbridge.

As to your other points, yes the population has increased but we still have the lowest population density in western Europe (and by quite some distance too). We also have the smallest and most expensive houses in a country that has the IMF at the door. Something is not adding up here...

D3PO

Mods I have an issue with you creating a thread in my name with a thread title when I replied to a post in a different thread.

the thread title is inflammatory and I don't appreciate it.

murphaph

cookie1977 wrote: »

You said the state shouldn't get involved in property. But I'd utterly disagree as the private sector could not be trusted to effectively supply social housing which will always be necessary to some extent.

Hmmm, there's essentially zero social housing in state hands in Germany (excluding some stock still left over from the GDR days that hasn't been sold off to private housing companies). Germany has about 60% renting to 40% home ownership and I dare say a smaller homelessness problem than Ireland (per capita).

In countries where the state actually builds social housing on a large scale, you quite often end up with ghettos. We have them, the UK has them, France has them. Italy has some terrible ones in the south.

I think it's a bitter pill to swallow sometimes but in order to break the cycle of living off benefits you need to expose kids to "better".

cookie1977

murphaph wrote: »

Hmmm, there's essentially zero social housing in state hands in Germany (excluding some stock still left over from the GDR days that hasn't been sold off to private housing companies). Germany has about 60% renting to 40% home ownership and I dare say a smaller homelessness problem than Ireland (per capita).

In countries where the state actually builds social housing on a large scale, you quite often end up with ghettos. We have them, the UK has them, France has them. Italy has some terrible ones in the south.

I think it's a bitter pill to swallow sometimes but in order to break the cycle of living off benefits you need to expose kids to "better".

In Germany approximately 5% of all housing stock is Social Housing:
http://www.housingeurope.eu/publication/social-housing-country-profiles/social-housing-in/de

while Ireland has 8.7%
http://www.housingeurope.eu/publication/social-housing-country-profiles/social-housing-in/ireland

cookie1977

Re homelessness in both countries:
http://www.feantsaresearch.org/IMG/pdf/feantsa_2009statsreview_en.pdf
There's a lot of stats but taking roofless in 2009
Germany had: 18,000 (% of pop= 0.00022)
Ireland had: 110 (% of pop= 0.0002)

Ray Palmer

I don't see why having any job will mean you should be able to afford to be able to buy a home. If that were the case a minimum wage job should mean you could afford to buy a property. That just doesn't make sense. I doubt you will find any countries where a minimum wage job alone means you can afford property.

Using central Europe as a claim of something better is also missing major historical differences. WWII destroyed so much housing stock their property ownership model was reset. Vast properties were built with foreign aid and property companies with long term investment models were used. It was basically a socialist model used. They didn't do so by choice it was pretty much the only option they had.

Dyr

Pawwed Rig wrote: »

The government has no place in a marketplace. Everytime they dabble in the propertyn market something goes disasterously wrong.

All the same, It's funny how it all only went disastrously wrong after the government knocked social housing on the head and gave the field to developers

Pawwed Rig

Bambi wrote: »

It's funny how it all only went disastrously wrong after the government knocked social housing on the head and gave the field to developers

What went disastrously wrong?

cookie1977

Pawwed Rig wrote: »

What went disastrously wrong?

Things like the affordable housing scheme designed to have cheap housing located beside private housing that resulted in developers buying crap land miles away from the private housing at which to build the cheap housing so they didn't put off private buyers on their "good location" land

Pawwed Rig

That was a government decision. The original idea was that each estate should have x% of social/affordable housing. But the govt decided that D4 was way too good for social housing so gave the developers and out where they allowed them build clusters of social housing elsewhere.

Duggys Housemate

Pawwed Rig wrote: »

What went disastrously wrong?

Nothing. Housing market is grand.

cookie1977

Pawwed Rig wrote: »

That was a government decision. The original idea was that each estate should have x% of social/affordable housing. But the govt decided that D4 was way too good for social housing so gave the developers and out where they allowed them build clusters of social housing elsewhere.

It wasn't a government decision, it was a loophole exploited by developers and not closed off by the government.

snubbleste

cookie1977 wrote: »

It wasn't a government decision, it was a loophole exploited by developers and not closed off by the government.

Who wrote that particular piece of legislation that allowed that 'loophole'?

cookie1977

snubbleste wrote: »

Who wrote that particular piece of legislation that allowed that 'loophole'?

I know that but my point was the developers would have used anything to protect the values of their properties no matter what the government did.

Ray Palmer

cookie1977 wrote: »

It wasn't a government decision, it was a loophole exploited by developers and not closed off by the government.

Actually the local council had to accept the offer in each instance. The developer had to be allowed do it by them. There was rightly a clause allowing exceptions. It was local councillors who voted on the dodgy ones should be named and shamed.

Lots were given cash to the council and/or never got the property. It is hard to tell if that is due to poor management or corruption in some cases.

murphaph

cookie1977 wrote: »

In Germany approximately 5% of all housing stock is Social Housing:
http://www.housingeurope.eu/publication/social-housing-country-profiles/social-housing-in/de

while Ireland has 8.7%
http://www.housingeurope.eu/publication/social-housing-country-profiles/social-housing-in/ireland

Yup and as I said, the stock Germany has is mostly former GDR stuff that it "inherited" (the GDR built vast social housing projects). In the former West Germany it is really almost zero. People are housed through a "rent allowance" type system (a better one that is less susceptible to fraud however).

The stuff in the GDR is gradually being flogged off to private companies still as the state does not want to be actively building/running social housing any more.