Is it time to be content with renting and not have notions of buying ?

MarkAnthony

fret_wimp2 wrote: »

your numbers are a little skued. AFAIK, national average wage in ireland is already below 40k. social housing for all then!

Average industrial wage is 36K assuming two working parents, as is the norm these days I would expect that's 72K.

A family on less than 40K a year either has only one parent working, as is a constitutional 'right' (however unenforceable), perhaps aspiration is a better word or has two people on low incomes.

handlemaster

KomradeBishop wrote: »

The rental market isn't there to allow landlords to leach off of the rest of society - sucking up all of peoples spare income - it's there to provide a place for people to live, without rents severely curtailing the rest of the renters lives, for the benefit of a class of people who can get a big pay-boost, with zero value added - just by jacking up the rents continually.

Excessive rents and lack of adequate numbers of properties for both renting and buying, are problems that can be solved in a large number of ways other than 'screw the renter/buyer - to benefit investors and landlords'; the entire market is dysfunctional right now, precisely in a way that screws renters/buyers.

As stated before landlords purchase properties to rent to people who either Cant or dont want to buy their own home. This is called investing its not charity. Going by what your saying any business who makes their income from providing à service is a leach

jmayo

The Spider wrote: »

Supply won't be addressed until developers think that the potential profits are worth the huge investment risk, bearing in mind how badly they were burned the last time, in fact it's probably safe to say that they'd want significantly higher profits this time around as they're all painfully aware of the consequences of a crash and they'd look to put as much clear blue water between themselves and debt as possible.

ehh builders and developers made a fortune during the construction bubble.
It is not everyone elses fault that they either got greedy and started borrowing colosal amounts to become the next Donald Trump, they built houses in places there wasn't ever a real market or they snorted it up their nostrils at the races.

So now you reckon those same builders should be given even higher profit margins so that they don't make the same big fookups again. :rolleyes:

Some smart savvy builders walked away from the last bubble actually in not too bad a position.

For a start one thing that should be done is derelict sites sitting in prime areas should be forced into redevelopment.
End this crazy landbanking shyteology that has always gone on.

handlemaster wrote: »

As stated before landlords purchase properties to rent to people who either Cant or dont want to buy their own home. This is called investing its not charity. Going by what your saying any business who makes their income from providing à service is a leach

There has to be a balance because you can't have a situation where people are spending collsoal amounts of their take home pay on renting a roof over their head.
Just like having the price of property reaching colosal amounts, it is not good for the economy in the long run.

It may be good short term for a landlord or for someone selling, but as we have seen there can be long term massive fallout.

gaius c

handlemaster wrote: »

As stated before landlords purchase properties to rent to people who either Cant or dont want to buy their own home. This is called investing its not charity. Going by what your saying any business who makes their income from providing à service is a leach

They are however a service industry and when we get to the stage that a service industry is sucking productive capital like Daniel Plainview with his mighty straw, it's damaging to the rest of the economy.

NewDirection

gaius c wrote: »

They are however a service industry and when we get to the stage that a service industry is sucking productive capital like Daniel Plainview with his mighty straw, it's damaging to the rest of the economy.

Its called the going rate.
Out of interest how would you go about calculating a fair rent price?

Eugene Norman

MarkAnthony wrote: »

Average industrial wage is 36K assuming two working parents, as is the norm these days I would expect that's 72K.

A family on less than 40K a year either has only one parent working, as is a constitutional 'right' (however unenforceable), perhaps aspiration is a better word or has two people on low incomes.

The term "average industrial wage" needs to be abandoned. Its the wages of people in actual full time employment in actual industry, not services or part-time work.
Also averages are hopeless with regard to income, the average income isn't earned by people at the 50%, more people are below the average than above. Use median.
Another error is assuming that women earn exactly what men earn, and implicitly assuming that you can double the male wage ignoring that even if two wages are the "norm" that would be bogus even if women earned 100% of the male wage when they worked ( or vice versa) unless the norm meant "100%".

Besides that the post was great.

Eugene Norman

From the journal two years ago here are the average breakdowns of family income in Ireland.

33% of households have a gross income of less than €30,000
56% of households have a gross income of less than €50,000
62% of households have a gross income below the average (mean) household income of €56,500
The top 30% of households have a gross income of more than €70,000 per annum
The top 20% of households have a gross income of more than €80,000 per annum
14% of household have a gross income above €100,000 per annum
2% of households have gross incomes above €200,000 per annum

Its clear we need a lot of social housing if some posters on here are to believed.

Eugene Norman

handlemaster wrote: »

As stated before landlords purchase properties to rent to people who either Cant or dont want to buy their own home. This is called investing its not charity. Going by what your saying any business who makes their income from providing à service is a leach

The question is why some people "can't". If for instance the property market were propped up by landlords not paying their mortgages, that would be unfair.

Eugene Norman

NewDirection wrote: »

Its called the going rate.
Out of interest how would you go about calculating a fair rent price?

Decide on a average % of average income you want the average rental to be and then build enough housing to satisfy that. You won't get it right all the time, but even attempting to do it will cool the market.

The_Conductor

Even those figures are largely meaningless though- if a dual family income of 80k- has a net income of around 50k- from which they are spending over 30k on childcare.........

Just because your headline 'gross' income looks wonderful- means precisely nothing- you could very well be better off staying at home on social welfare.

Michael D Not Higgins

Eugene Norman wrote: »

Decide on a average % of average income you want the average rental to be and then build enough housing to satisfy that. You won't get it right all the time, but even attempting to do it will cool the market.

That's Soviet-level 5 year plan stuff. Bound for failure.

We should have the government stimulating the building industry to provide housing in line with predicted requirements, e.g. ESRI research. If the building sector isn't providing these, then the government aren't doing the right things.

gaius c

Michael D Not Higgins wrote: »

That's Soviet-level 5 year plan stuff. Bound for failure.

We should have the government stimulating the building industry to provide housing in line with predicted requirements, e.g. ESRI research. If the building sector isn't providing these, then the government aren't doing the right things.

Ah now, you can't be doing that sort of stuff. House prices would drop going into an election year!

gaius c

NewDirection wrote: »

Its called the going rate.
Out of interest how would you go about calculating a fair rent price?

Fair has nothing to do with it. People paying over 50% of their net salary to put a roof over their heads is damaging to the rest of the economy and with the way the market is, there is no opportunity for them to save money.

At one point, I was paying 42% of our household net income in rent in a fairly working class area. By moving to an extremely "unfashionable" part of town and signing up with a total chancer of a landlord, I was able to cut this to 37%. Thankfully we didn't have kids at the time or we'd really have been screwed.

Luckily, my wife found work shortly after and I changed jobs so our situation improved but not everybody is that lucky and most people earn less than what I was on at the time. I don't know how households on 50k or less get by if they have kids.

NewDirection

gaius c wrote: »

Fair has nothing to do with it. People paying over 50% of their net salary to put a roof over their heads is damaging to the rest of the economy and with the way the market is, there is no opportunity for them to save money.

At one point, I was paying 42% of our household net income in rent in a fairly working class area. By moving to an extremely "unfashionable" part of town and signing up with a total chancer of a landlord, I was able to cut this to 37%. Thankfully we didn't have kids at the time or we'd really have been screwed.

Luckily, my wife found work shortly after and I changed jobs so our situation improved but not everybody is that lucky and most people earn less than what I was on at the time. I don't know how households on 50k or less get by if they have kids.

Can you do out one example of someone who is forced to pay over 50% of their net salary for accommodation (just wage & rent price). If you find yourself in that situation then move somewhere else. Even earning minimum wage you shouldn't find yourself paying that percentage in most parts of the country.
If you're hell bent on living in Dublin city centre, then there's not much you can do. A bit of flexibility and you should be able to get your finances back in order.

Michael D Not Higgins

gaius c wrote: »

Ah now, you can't be doing that sort of stuff. House prices would drop going into an election year!

It would take a while for these houses to come on stream and delay any effect on house prices. They should do it now if they're clever as they can claim they're stimulating the construction industry sustainably, increasing job, etc.

gaius c

NewDirection wrote: »

Can you do out one example of someone who is forced to pay over 50% of their net salary for accommodation (just wage & rent price). If you find yourself in that situation then move somewhere else. Even earning minimum wage you shouldn't find yourself paying that percentage in most parts of the country.
If you're hell bent on living in Dublin city centre, then there's not much you can do. A bit of flexibility and you should be able to get your finances back in order.

I know a one couple paying over 50% of their net income to live in the outer subhurbs of Dublin with a few more in the 40%+ mark and moving to the commuter towns won't save them because the rent isn't that much cheaper to cover their added commuting costs.

Moving into a room in a houseshare to cut costs won't work if they have kids.

One of these couples have been reduced to living in a granny flat in a back garden in Tallaght. They'd be better off on welfare really.

Ballyfermot was always my "litmus test" of the rental market. I think we'll all agree that it's very definitely a working class area but the one available 3 bed house in Ballyfermot is €1300 a month, which is about standard now. You might be lucky and get one for €1,200 a month.
Can working households on typical Ballyfermot wages pay that kind of money indefinitely? I don't think so.

P.S. You're assuming everybody works 40 hours a week. A lot of people, especially younger people, can't get full hours.

NewDirection

gaius c wrote: »

I know a one couple paying over 50% of their net income to live in the outer subhurbs of Dublin with a few more in the 40%+ mark and moving to the commuter towns won't save them because the rent isn't that much cheaper to cover their added commuting costs.

Moving into a room in a houseshare to cut costs won't work if they have kids.

One of these couples have been reduced to living in a granny flat in a back garden in Tallaght. They'd be better off on welfare really.

Ballyfermot was always my "litmus test" of the rental market. I think we'll all agree that it's very definitely a working class area but the one available 3 bed house in Ballyfermot is €1300 a month, which is about standard now. You might be lucky and get one for €1,200 a month.
Can working households on typical Ballyfermot wages pay that kind of money indefinitely? I don't think so.

P.S. You're assuming everybody works 40 hours a week. A lot of people, especially younger people, can't get full hours.

You could move out of Dublin, and get a three bed semi for 700ish in most places in, and save yourself over 7,000 after tax. For that amount of savings you wouldn't have to earn much over minimum wage to have more disposable income at the end of the week.

gaius c

NewDirection wrote: »

You could move out of Dublin, and get a three bed semi for 700ish in most places in, and save yourself over 7,000 after tax. For that amount of savings you wouldn't have to earn much over minimum wage to have more disposable income at the end of the week.

Commuting costs are not negligible, especially if they don't have a car (to save money) and get everywhere by bike, again to save money they don't have for public transport.

Your bolded fit is fanciful in the extreme and proves that you don't actually know the market at all and I went onto daft to prove it.

There are 3 three bed semis in Co Kildare for the budget you have specified. Two of them are in Athy and the other is actually a house share in a student house for the summer only.

A similar check for Meath finds 3 properties. They are in places that I had to use google maps to find: Kildalkey, Crossakiel and Carrolstown.

Wicklow has 2 such properties. One is in Baltinglass and the other is in Dunlavin.

Louth has 5. 3 of them are in Dundalk.

Needless to say, the only 3 bed properties in Dublin that come in at or under €700 a month are actually house shares.

NewDirection

gaius c wrote: »

Commuting costs are not negligible, especially if they don't have a car (to save money) and get everywhere by bike, again to save money they don't have for public transport.

Your bolded fit is fanciful in the extreme and proves that you don't actually know the market at all and I went onto daft to prove it.

There are 3 three bed semis in Co Kildare for the budget you have specified. Two of them are in Athy and the other is actually a house share in a student house for the summer only.

A similar check for Meath finds 3 properties. They are in places that I had to use google maps to find: Kildalkey, Crossakiel and Carrolstown.

Wicklow has 2 such properties. One is in Baltinglass and the other is in Dunlavin.

Louth has 5. 3 of them are in Dundalk.

Needless to say, the only 3 bed properties in Dublin that come in at or under €700 a month are actually house shares.

Thanks for proving my point, you searched some of the most expensive counties for renting and still found options. The further you move away from Dublin the bigger choice you'll have in that range.
You pay a premium for living in or near the capital. That premium being for better facilities, more job opportunities, and better wages. These things attract more people to places. More people trying to live there = bigger prices.
You are making the choice to live where you live, and the market has priced it accordingly. You are paying the going rate.

I can do research too, out of 1,044 3-bed houses listed on Daft for rent 472, or 45% are coming up as €400 - €700 a month (providing I didn't mees up including house shares , the > 400 is to weed out some outliers)

That's some choice.

gaius c

You're seriously moving the goalposts now because you never specified that you wanted them to move jobs as well. You specified "outside Dublin" so I looked outside Dublin and your example was plain wrong.
Look I appreciate that you dug yourself into a bit of a hole and you're trying to get out of it by pretending you meant outside Leinster but all you've proven is that you don't know the market that you're commenting on.

Moving on from that.
Where do you want the cleaning staff for the IFSC to live? Even Ballyfermot is going to be a stretch for them on current rents.

There are no affordable options whatsoever for people who work in Dublin on low wages and are past the stage of living like overgrown students.

KomradeBishop

NewDirection wrote: »

I think you are thinking about this the wrong way. The rental market is only there to make money for the landlords. They are not renting out properties for some social obligation to provide houses for people in need of them. It's for one reason to make a return on their investment. The second point is that like every investment they will try to increase their ROI by reducing costs and increasing income, like any other investment / business.

You use phrases like 'leaching off society' and 'sucking up sapre income', which is entirely inaccurate. Its an open market, regulated by market forces (and every now and again interference from the government). If a landlord ups his rent too far, he wont get tenants. Its self regulating. The only thing really pushing up rent is lack of suitable supply.

My thinking might be over simplistic, but the only way rents can naturally stabilize (or even reduce) is not by government interference, but by increasing the supply where its needed, which looks to be Dublin.
The supply will naturally increase when you have three things
1) Available land to build on
2) Developer who can make a return on investment building the properties
3) Credit for the developer to fund the project.

I reckon (1) is available, and with current house prices in Dublin I'm guessing that the ROI would be there for developers. So why are there not developments popping up all over Dublin? Is it the funding?

I'm thinking about it, from the point of view of looking at excessive rental income, as one of the more significant sources of unearned income in society - and unearned income, is something that should be clamped-down on and minimized, wherever possible.

The rental market should be there to provide people with places to live, not to provide rent-seeking/unearned-income opportunities, which suck up spare income from the rest of society; that benefits the wealthy/investor/financial/landlord class, and harms the rest of society.

Not everything is justified by stating 'Free Meerkats™' - they are not an end in themselves, we have to have a rental market people can affordably live in, which doesn't suck up an excessive amount of their spare income.
No markets are truly 'self regulating' either - there is government interference in almost every market.

I agree though - that supply desperately needs to be increased; money and policy changes need to be put into that, as soon as possible.
I'm not personally convinced, that investors want to do this either - because as a market, there are 'perverse incentives' here, where it is more profitable to let existing property prices inflate instead, and to keep the supply scarce; property/land is one of the primary examples, of markets that fit the 'free market's myth the least - one of the most manipulated and profitable markets around.

KomradeBishop

handlemaster wrote: »

As stated before landlords purchase properties to rent to people who either Cant or dont want to buy their own home. This is called investing its not charity. Going by what your saying any business who makes their income from providing à service is a leach

Any business based on excessive and expanding unearned income - as described in my post above - is a leach. Rent on property is one of the primary examples - when it becomes excessive - of unearned income.

Barely Hedged

KomradeBishop wrote: »

I'm thinking about it, from the point of view of looking at excessive rental income, as one of the more significant sources of unearned income in society - and unearned income, is something that should be clamped-down on and minimized, wherever possible.

The rental market should be there to provide people with places to live, not to provide rent-seeking/unearned-income opportunities, which suck up spare income from the rest of society; that benefits the wealthy/investor/financial/landlord class, and harms the rest of society.

Not everything is justified by stating 'Free Meerkats™' - they are not an end in themselves, we have to have a rental market people can affordably live in, which doesn't suck up an excessive amount of their spare income.
No markets are truly 'self regulating' either - there is government interference in almost every market.

I agree though - that supply desperately needs to be increased; money and policy changes need to be put into that, as soon as possible.
I'm not personally convinced, that investors want to do this either - because as a market, there are 'perverse incentives' here, where it is more profitable to let existing property prices inflate instead, and to keep the supply scarce; property/land is one of the primary examples, of markets that fit the 'free market's myth the least - one of the most manipulated and profitable markets around.

So if we take the example of a 2 bed property thats currently being let in Dublin say at 1.6k and its normal market level (whatever the hell that means) is 1.2k.

So a €400 spread between the two a month. What happens that €400 of "excess" you classify it as? Over €200 goes in a direct income tax grab.

Were down to €200 of excess now. Water charges and LPT are probably another €80 - €100 a month on top of that?

So we have the situation where nearly 75% of the unearned income is taken in a tax grab and redistributed via the government. In this case, its not being hoarded away - hardly a consequence of unearned income

whippet

KomradeBishop wrote: »

Any business based on excessive and expanding unearned income - as described in my post above - is a leach. Rent on property is one of the primary examples - when it becomes excessive - of unearned income.

Ifs it unearned then why did I pay tax and USC on the rent I recieved over the last few years ..

Your talking nonsense .. The landlord has to earn the money to purchase, maintain the property .. While you sneer at the free market you are at the polar opposite side of the argument.

Any way .. We have a f'ed up property market due in massive part to government intervention where not needed and government inaction where needed.

NewDirection

KomradeBishop wrote: »

No markets are truly 'self regulating' either - there is government interference in almost every market.

Barely Hedged wrote: »

So we have the situation where nearly 75% of the unearned income is taken in a tax grab and redistributed via the government. In this case, its not being hoarded away - hardly a consequence of unearned income

The government bringing in the old NPPR or changing the tax relief on interest from 100% to 75% a few years back are populist moves, that look like they are tackling the 'rich landlord', but really they are pushing rents up by squeezing landlords out of the market because its no longer profitable, reducing supply for tenants.
Its not like the landlords can squeeze more out of the tenant just because their expenses go up (they can try, but they wont get tenants if they charge more than everyone else)

All these measures do is divert money away from tenants and landlords into the government coffers.

gaius c

Barely Hedged wrote: »

So if we take the example of a 2 bed property thats currently being let in Dublin say at 1.6k and its normal market level (whatever the hell that means) is 1.2k.

So a €400 spread between the two a month. What happens that €400 of "excess" you classify it as? Over €200 goes in a direct income tax grab.

Were down to €200 of excess now. Water charges and LPT are probably another €80 - €100 a month on top of that?

So we have the situation where nearly 75% of the unearned income is taken in a tax grab and redistributed via the government. In this case, its not being hoarded away - hardly a consequence of unearned income

You appear to be forgetting that the tenant is down €400 a month, which equates to €800 a month of pre-tax income.

KomradeBishop

whippet wrote: »

Ifs it unearned then why did I pay tax and USC on the rent I recieved over the last few years ..

Your talking nonsense .. The landlord has to earn the money to purchase, maintain the property .. While you sneer at the free market you are at the polar opposite side of the argument.

Any way .. We have a f'ed up property market due in massive part to government intervention where not needed and government inaction where needed.

You need to read up the term 'unearned income' more - just because you pay tax on something, doesn't magically mean the remainer is earned. I could inherit a ton of money tomorrow, and pay a hefty tax on it - doesn't mean I did anything to earn it.

The_Conductor

Moderator note:

Komradebishop- if you want to educate people into the relative merits of Marxist economics- please take it elsewhere- this is not an appropriate venue. I don't care how enthralled you are with the theories or principals about the virtues you are extolling- they are not pertinent or relevant to this forum.

handlemaster

KomradeBishop wrote: »

Any business based on excessive and expanding unearned income - as described in my post above - is a leach. Rent on property is one of the primary examples - when it becomes excessive - of unearned income.

what is excessive ?

Your looking to live in a communist system. Fair enought but thats not ireland.

Eugene Norman

NewDirection wrote: »

Thanks for proving my point, you searched some of the most expensive counties for renting and still found options. The further you move away from Dublin the bigger choice you'll have in that range.
You pay a premium for living in or near the capital. That premium being for better facilities, more job opportunities, and better wages. These things attract more people to places. More people trying to live there = bigger prices.
You are making the choice to live where you live, and the market has priced it accordingly. You are paying the going rate.

I can do research too, out of 1,044 3-bed houses listed on Daft for rent 472, or 45% are coming up as €400 - €700 a month (providing I didn't mees up including house shares , the > 400 is to weed out some outliers)

That's some choice.

Basically you are expecting people to commute 100's or miles a week. Great. Why not also make them sell their children for food. Just middle class people. The "notions" they have about owning a decent house.

Instead we could build more houses or kick the scroungers not paying their mortgages out particularly the once rich scroungers class. They can move to Offaly.