Property Market 2016

Bob24 · 10-05-2016 11:35am

I wouldn't say the two years rent freeze was stupid either. But I would say it was 100% political and useless to renters in practice.

Bob24 · 10-05-2016 1:24pm

The IT have a follow-up article on this where they try to analyses today's rent's affordability vs 2008: http://www.irishtimes.com/business/personal-finance/rent-rises-a-symptom-of-deeper-malaise-1.2642230

Their graph showing inflation v.s. rent increases certainly puts and end to explanation saying that corrected for inflation rents are actually cheaper than they were at the time (even though it is only showing the past 4 years, you can safely assume inflation was not crazy in 2008-2012).

Michael D Not Higgins · 10-05-2016 1:28pm

In fact the ~5% deflation through 2009 probably makes the situation worse.

draiochtanois · 10-05-2016 1:38pm

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Michael D Not Higgins · 10-05-2016 1:42pm

Incomes were x
Taxes increased
Incomes are still x with more tax

The rents at 2007/8 levels are less affordable now.

Bob24 · 10-05-2016 1:53pm

Indeed, and the "crazy" thing is that despite rents being less affordable to tenants, landlords are also getting much less money vs the cost of running their business.

SarahMollie · 10-05-2016 1:55pm

This + no tax relief for renters.

Way more unaffordable now.

This table shows what people used to be able to claim. Its still in existence but due to be totally phased out by 2017.

http://www.revenue.ie/en/tax/it/tax-chart.html

People can only qualify if they were renting their property prior to the 7th December 2010, so I'm sure the numbers still getting this are pretty low.

Bob24 · 10-05-2016 2:01pm

Correct, and I woukd add the tax credit is being phased out gradually each year. So even for those who still have it, the amount is much less than it was in 2008 (I don't have the exact figures in mind and not easy to look-up on the phone, but I think it is 4 or 5 times less).

draiochtanois · 10-05-2016 2:40pm

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SarahMollie · 10-05-2016 2:46pm

Lots of people arent on the minimum wage though.

Think Teachers, Guards, Nurses etc. Pensions levy, tax hikes etc, reduction in increments.

You can't tell me that their take home pay has stayed the same, let alone gone up.

*For the record, I work in the Private sector*

Bob24 · 10-05-2016 2:57pm

The average monthly rent nationally exceeded 1,000 for the first time since 2008 in the first quarter of 2016 source

Minimum wage 2008 1461.85 per month
Minimum wage 2016 1546.35 per month[/quote]

More taxes, less tax credits, less social benefits ... Luckily I am not on minimal wage, but I am not sure the actual disposable income has increase for people who are on it.

Also why only focusing on people why are in minimal wage?

draiochtanois · 10-05-2016 3:03pm

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SarahMollie · 10-05-2016 3:10pm

I gave those professions as an example. Collectively the Public Sector is about 20% of the workforce, so hardly insignificant.

I actually don't know what your obsession with the minimum wage is all about but its not whats most important here. Most workers are not on the minimum wage.

I am well aware of whats gone on in the budget, but taxes now are still considerably higher than 07/08. They've been reduced, but nowhere near fully rolled back.

Yes, maybe some people (like myself) have had pay rises but I'm not so naive to think that this is the case for everyone. Frankly, most of my increased income comes from promotions, not simply being paid more for doing the same job.

A lot of people are still worse off.

draiochtanois · 10-05-2016 3:45pm

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SarahMollie · 10-05-2016 4:04pm

I don't think so at all. The majority of people are worse off. If I were this far into my career back in 07/08, I'd be getting paid more as wage inflation was higher and I wouldnt have any USC to pay. People were paying tax back then at around 42% (maybe less even) and now its still around 50-51% when you combine PAYE, PRSI and USC.

Yes, I'm personally better off because I've worked hard and moved up the ladder but if I were in a roll that didn't offer progression, I'd be worse off, no doubt about it.

And yes, inflation has slowed, but we still have had positive inflation between 08 and now, so generally the cost of living has risen.

Don't you remember what the Celtic Tiger was like? Everyone thought they were rich, every Tom, Dick and Harry had a 2nd property and were changing their cars regularly, going on shopping trips to New York etc etc.... despite being in fairly normal jobs.

If things were basically just the same as before, people would be living the high life again, maybe not to the same extent, but you'd be seeing more evidence of it for sure.

The_Conductor · 10-05-2016 4:09pm

Revenue tax collection demographics would tend to disagree with you.
A very small demographic has benefited disproportionally from the upswing in the economy. A significant majority are worse off- some significantly. Funnily enough- the lowest demographics have actually faired reasonably well- those on lowest wages, social welfare recipients and pensioners- are less worse off than middle class income earners.....

Swings and roundabouts- however- it is irrefutable that the upswing in the economy has disproportionally assisted a small cohort- the largest demographic- middle class Ireland- has been left behind.

Greyian · 10-05-2016 4:16pm

draiochtanois also doesn't seem to be considering that you can't just look at individuals and say they are better off, therefore stuff is more affordable.

Someone who was 23 in 2008 will be 31 this year. You'd expect them to be considerably better off, they have gone from being a recent graduate to someone with nearly 10 years experience. It would be far more accurate to compare how the average 23 year old (or 25, or 30, or 40 year old etc) in 2016 compares to the average 23 year old (etc. etc.) in 2008. You'll probably find that each group is worse off (considerably so) when compared against the same demographic almost a decade ago.

I'm better off now than I was in 2008....but I'm worse off now than someone with my experience etc would have been in 2008. I'm better off because I am more experienced, not because people in general are better off. I'm paid less now than I would be if I could magic myself back to 2008 now, with the same experience, qualifications, age etc

draiochtanois · 10-05-2016 4:25pm

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SarahMollie · 10-05-2016 4:26pm

Exactly this

SarahMollie · 10-05-2016 4:30pm

Household debt reducing is not a sign of prosperity and confidence in the economy, its a sign of fear.

Of course debt is lower, people are no longer casually buying a new Mercedes every January anymore. They feel less secure, so therefore they're paying down debt with whatever they have.

draiochtanois · 10-05-2016 4:34pm

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Michael D Not Higgins · 10-05-2016 4:38pm

Also a sign of the fall off in mortgages over the last 8 years which is only starting to recover now. Since the crash, more and more people are continuing to rent instead of taking on mortgages or can't get/afford a mortgage. This has meant less mortgage debt and those with mortgages have continued paying theirs down, apart from those in arrears but they are a smaller proportion of the total.

Also as you said, fewer car loans, etc. also impacting household debt.

SarahMollie · 10-05-2016 4:39pm

2007 was the high in terms of car sales. The proverbial had already hit the fan by mid 2008. Also, the gross number here isnt that relevant. The type of cars being bought has changed. A lot more people are making more practical choices, buying cost effective run around rather than luxury vehicles to have as a status symbol.

I've never said its not prudent, but said prudence is coming from fear of being over extended and losing it all, as happened to a lot of people. Also, just because its falling doesnt mean people are paying it back any quicker, as you seem to be implying. It just means that the rate of new debt being taken out is less than the rate at which old debt is being paid off. Because people are more cautious these days. Because of what a lot of people have been through.

And as I also said, using household debt is not an accurate indicator of earnings. You're looking at the wrong economic indicator.

draiochtanois · 10-05-2016 4:40pm

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draiochtanois · 10-05-2016 4:43pm

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SarahMollie · 10-05-2016 4:44pm

Well, when talking about net income, I'd suggest you look at statistics such as "net income".

athtrasna · 10-05-2016 4:46pm

Economics forum maybe a better place for this talk?

SarahMollie · 10-05-2016 4:46pm

50% of a small number.

Actually an even greater % of sales were cash buyers 5 years ago.

Therefore, these cash buyers always had the money. They're not the people we're talking about here.

Michael D Not Higgins · 10-05-2016 4:50pm

What are you trying to prove? Cash buyers of houses doesn't mean that there's the same level of sales as pre '08.

We're saying that the average person is worse off these days. The fact is the average wage is roughly the same but taxes have gone up. If the average apartment rent is the same then it's obviously less affordable. Saying household debt has gone down is a red herring as it averages out mortgage debt and the like across the entire population. This debt isn't applicable to those in renting situations anyway (for the most part).

athtrasna · 10-05-2016 10:31pm

Mod note
This thread is about the property market. Please post on topic or find the appropriate alternative forum for your post. Thanks

Property Market 2016

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