Proposal for a Generous New Grant for First Time Buyers

What to make of this?
First-time buyers to get generous new grant

Favourite line is this one:

Finance Minister Michael Noonan is also wary about ensuring the scheme will not interfere with either the supply of, or demand for, housing.

I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

I mean, fine, if that's what we want - (I don't really think it is) - but why pretend interfering is not going to affect demand?

Can they not just say: 'we're introducing lots of measures as part of a housing package - some will affect will increase supply, some will increase demand, and we hope it all balances out but with fewer people on housing lists in the end'.

Villa05

Deleted User wrote:

I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

This should have its own thread titled Stupid?

mel123

Deleted User wrote: »

What to make of this?
First-time buyers to get generous new grant

Seriously, FTB already have a 'perk' with the amount of deposit they need compared to non first time buyers.
Is it not time the government looked at schemes to help people who want to trade/upgrade their home and find themselves in an impossible situation either due to negative equity or the twenty per cent deposit rule? Its like ok, you have a house, we dont need to help you, when personally I think a shift in this market might actually help the situation.

oh no, here we go again

Bob24

Deleted User wrote: »

What to make of this?
First-time buyers to get generous new grant

Favourite line is this one:


I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

It is also the line which stands out for me (and it did before reading your comment).

The Irish Times is mentioning VAT relieve for fist time buyers and a state funded to-up on mortgage deposits. While I don't think the first point is going to fix the problem (more supply is needed) I have no objection to it, but I think the second one is cynical and will make things worst. A "free" deposit top-up is a poisonous gift as will give all households leverage to borrow more, meaning increasing prices (given the restricted supply) and at the end of the day more debt for these households. Pretty much sounds like a way to override the CBI as it doesn't want to budge and relax lending rules.

The_Conductor

Guys- I've hived this off into its own thread- as I feel it warrants discussion in its own right- rather than as part of the main property market thread.

Personally- I believe the whole concept is flawed- the issue in an Irish context is lack of supply- and giving people more money is simply going to have extra money chasing a limited or in some cases, non-existent supply.

The only solution- and the best way to help first time buyers- is to construct decent accommodation units- with requisite facilities and amenities- where people want to or need to live. Until the issue of lack of supply is addressed in a meaningful manner- any other tinkering with the market is doomed to failure- at very best it may assist a few special purchasers- which in turn will only exacerbate the 'haves' and the 'have nots' in Irish society.

I would call on the Minister- to quit tinkering with schemes like this- and instead focus on measures to vastly enhance supply of decent quality, proper sized, units- esp. in our main metropolitan areas (in particular Dublin, Cork and Galway- but to a lesser extent- Waterford, Kilkenny hell- even Portlaoise these days.......)

We need houses built- we do not need extra money to chase non-existent housing stock.

Totally agree. And, as Mel123 said, they already made an exception for FTBs when introducing the mortgage rules.

What is so special about FTBs?!

I bought last year so I'm not directly affected but it is very frustrating for buyers to see fuel added to the fire like this. It's the kind of favour they can do without.

mydarkstar

Another not so wonderful idea by the Government. Since I'm no longer a 1st time buyer this kind of tinkering grinds my gears.

I've spent the last 5 years overpaying my mortgage to get me out of negative equity for the home I bought in 2004. Now I'm finally in a position to move and have a little equity to add to my savings for a 20% deposit. It is hard enough that we're bidding (unsuccessfully) against 1st time buyers who only need a 10% deposit, now they will also have extra assistance.

Lack of supply is the issue that needs to be addressed instead.

punisher5112

The help should be there for those that are stuck renting as they can't save as the rent prices are so high.

Why can't the bank etc.. See one is paying xxxx amount on rent and then be able to give a mortgage to .

It will then free up that property for someone else to rent.

zl1whqvjs75cdy

I am a potential first time buyer caught in the trap of massive rent costs making it difficult to save for a deposit. I still don't want this measure to be put in place. All it will do is drive up prices and make the bottom end of the market (sub 300 k) even more mental.

crisco10

I really wonder when I see things like this. Like Ixelles, I bought last year so this won't affect me. And I don't feel I "missed out" either; simple economics says that this money will simply go straight into the house prices as all FTB's will have more to spend.

But what it won't do is get trader-uppers moving out of the stock that FTB's might be interested in - not that everyone has a right to be a trader upper. There are many ways to influence the supply side. And this would help ALL buyers. Demand side economics is discriminatory by nature.

The other question of course is is this actually helping FTB's at all? It gives them access to more credit, but will ultimately put more debt on their shoulders in the long run.

snubbleste

mydarkstar wrote: »

Another not so wonderful idea by the Government. Since I'm no longer a 1st time buyer this kind of tinkering grinds my gears.
I've spent the last 5 years overpaying my mortgage to get me out of negative equity for the home I bought in 2004. Now I'm finally in a position to move and have a little equity to add to my savings for a 20% deposit. It is hard enough that we're bidding (unsuccessfully) against 1st time buyers who only need a 10% deposit, now they will also have extra assistance.
Lack of supply is the issue that needs to be addressed instead.

Did you not get assistance as a FTB then?

listermint

punisher5112 wrote: »

The help should be there for those that are stuck renting as they can't save as the rent prices are so high.

Why can't the bank etc.. See one is paying xxxx amount on rent and then be able to give a mortgage to .

It will then free up that property for someone else to rent.

Genuinely interested as to how that increases Supply of Stock ??

mydarkstar

snubbleste wrote: »

Did you not get assistance as a FTB then?

Yes, I got TRS in those years. The same as other people did.
Due to the level of the mortgage in the last 5 years the TRS amounts to about €200 each year. This isn't equivalent to the newly proposed help for FTB's.

ted1

Houses can not be built at cost the FTB can afford. That's why there are so few starter homes being built, most are larger houses from 500k up.

If they remove the VAT factor then developers can build houses that would sell for 350 for a lower price that FTB can afford

caff

I don't see how this will do much to increase housing availability other than to create more bidding wars in the immediate future. They should instead build more public housing or increase the viability of housing co-ops through fast tracked planning and access to credit.

Hopeful2016

mydarkstar wrote: »

Yes, I got TRS in those years. The same as other people did.
Due to the level of the mortgage in the last 5 years the TRS amounts to about €200 each year. This isn't equivalent to the newly proposed help for FTB's.

Tracker?

mydarkstar

Hopeful2016 wrote: »

Tracker?

No, an SVR. It was a small amount of mortgage, on an apartment that in 2009 onwards dropped to around the value of a new car (hence the negative equity).

One_Of_Shanks

It's another bad idea. They never learn.

What is needed is increased supply. Not more meddling.

Every time they interfere with half-baked ideas like this one it only serves to make things even worse.

Things that could be done to help Dublin's supply.

1 - Build some corporation houses (Very supply orientated)
2 - Build some public transport systems that adequately links 'green/brown' field sites (re-zoned) with the city (incentivize & lower cost of supply)
3 - Reconsider planning restrictions (1. Building height, 2. Room sizes, 3. 'Passivity') - (lower cost of supply)
4 - Vacant Site tax (increase cost of not-supply)
...
....
.....
......
999,999,999 - Give people some cash, won't help supply, will make houses more expensive, but sure looks like you're trying to help.

quadrifoglio verde

ted1 wrote: »

Houses can not be built at cost the FTB can afford. That's why there are so few starter homes being built, most are larger houses from 500k up.

If they remove the VAT factor then developers can build houses that would sell for 350 for a lower price that FTB can afford

I'd be looking at removing the ridiculous levies imposed on new builds. The provision of part V should not be the responsibility of first time buyers

listermint

ted1 wrote: »

Houses can not be built at cost the FTB can afford. That's why there are so few starter homes being built, most are larger houses from 500k up.

If they remove the VAT factor then developers can build houses that would sell for 350 for a lower price that FTB can afford

There needs to be creativity and certainly time sensitive 'breaks' put in place. But something that doesnt just allow Builders to swallow up the incentives whilst increasing the price.

Smart thinking and i dont think giving breaks to FTB is the way to go whatsoever. Its short term madness the likes id expect from FF. They can only see to the end of the road and not into the next street.

El_Dangeroso

http://www.independent.ie/irish-news/firsttime-buyers-to-get-generous-new-grant-34891797.html

File this one under 'History Repeats'.

So expect a 'generous' bump in house prices next year that strangely co-incides with this scheme.

I for one am going to try my hardest to buy before this goes in.

ted1

listermint wrote: »

But something that doesnt just allow Builders to swallow up the incentives whilst increasing the price.

.

Builders can not currently build homes for FTB as the land and build costs are too high.

mariaalice

Maybe a tax credit or similar not a grant.

Claw Hammer

Everything is being done by this government at the behest of the big corporations. What is proposed here is a straight forward subsidy to the big building companies, the site owning vulture funds and the banks. FTBs and anyone who buys a new house will pay a heavy price.

superman28

This is typical in Irish Politics,, instead of tackling the real problem trying to fudge it with ham fisted bumper giveaways,,

UsBus

El_Dangeroso wrote: »

http://www.independent.ie/irish-news/firsttime-buyers-to-get-generous-new-grant-34891797.html

File this one under 'History Repeats'.

So expect a 'generous' bump in house prices next year that strangely co-incides with this scheme.

I for one am going to try my hardest to buy before this goes in.

I'm sick of this crap. First time buyers getting preferential treatment. I sold a couple of times over the last 10 years not making profit just moving with the intention of buying in a different area. Now I'm renting & priced out completely. Now you either have to be a millionaire or a FTB......nothing for anyone in between. Why can't each person be assessed by their application..??

Pathetically predictable. Anything for the shortview towards getting a few votes in the impending election from amadáin who are incapable of seeing that when the state gives them money back to buy a house that means they, and every other house purchaser, have more money to buy a house. And what happens house prices? Well, when more money is chasing the same number of houses, house prices rise. At the end of the day this stunt is just the state handing money over to private house sellers. Infuriating. Major déjà vu with stamp duty removal and other similar pre-election stunts. The Central Bank is the sole organisation which has acted responsibly (to howls of outrage from the muppets who cannot get the above maths) via its deposit etc restrictions. Now, the problem is the lack of supply.

The real solution is the elephant in the room.

Back in the 1930s the much maligned Éamon de Valera and his government organised the building of over 100,000 homes (houses, in those days). Re-read that. This is very rarely if ever acknowledged in 2016 as it's a stunning reality from the depths of the 1930s depression and international instability that would expose the unwillingness of this state's political elite to solve this problem today. De Valera used public funds to take down the slums and build these homes. We have our governments - including those awfully repellent smoked salmon socialists in the last government - declaring they cannot use public funds to provide houses "because the EU doesn't allow it". Scapegoating the EU, just as once they scapegoated the Brits. And they absolutely love putting the onus on private developers, people motivated entirely by money, to do this building. They're so blinkered in their rightwing "put faith in the markets to sort everything out" ideology that they cannot even think creatively about a real solution.

The solution is entirely in the hands of this government. They are sitting on their hands as they watch their own property possessions in Dublin and elsewhere rise in value. Any sign of their long-promised vacant site levy on these land hoarders in Dublin? Nope. According to the 2016 Census there are now 198,000 vacant homes in the republic. Any sign of a vacant homes levy so that these people have a major financial incentive to dispose of their empty homes? The entire class of politicians as well as City and County Council officials are wholly unwilling to give anything but lip service and a few cosmetic changes to address this problem when everybody knows that a radical change à la De Valera in the 1930s is where the solution is.

dubrov

ted1 wrote: »

Builders can not currently build homes for FTB as the land and build costs are too high.

In a normal functioning competitive market, builders will only bid at levels that allow them to generate a profit. This sets the land price.

If land prices are truly still too high, it suggests land hording.
This can only work if very few people own a large proportion of the available land,

ted1

dubrov wrote: »

In a normal functioning competitive market, builders will only bid at levels that allow them to generate a profit. This sets the land price.

If land prices are truly still too high, it suggests land hording.
This can only work if very few people only a large proportion of the available land,

They can build higher prices units as is happening all over Dublin, they just can build low cost FTB houses.

So they can generate profits