Unless Central Bank rules change we can't have a bubble

beauf

Samuel T. Cogley wrote: »

<mod snip>
However housing is not a singular commodity like gold or coffee, is segmented. You need to exceed the demand in a given segment, 4 bed houses in Howth for example for the price to change, while there is two buyers for a single property prices will continue to rise. Now one buyer might move they might not however it's no where near as simple as you're trying to suggest. If it were there would be no middle class people looking for houses, they'd have bought in Finglas and Kilbarrack because they could afford to.

Until a buyer has a choice on a couple of different properties and competition is introduced the best we can hope for is stagnation.

We used to sell houses. I can remember a time probably late 80s and 90s when it took months to sell a house. We stopped building them and moved to other types of building work. We had houses for sale at 30-40k and they didn't sell easily.

I was always curious how the price of houses since then has been completely out of line with any rises in the average income. Especially when you consider we've moved from a single income being able to afford a house, to not even joint incomes being enough.

It's not just an Irish problem either.

April 73

jamesthepeach wrote: »

I hear lots of friends in positive equity now are remortgaging just for the cash.
This wouldnt have happened last year or the year before.
I think thats a bad sign.

What are they doing with the cash?

jamesthepeach

I dont know what they are doing with the cash.
One has a daughter with a wedding coming up. I suppose some might be going on that.
Another just bought a new car.
Im sure some just want cash on had.
But tbh they dint tell me about what they do with the cash.
It just comes up in conversation where they tell me about this great deal wheer you can remortgage and get cash.
I was never into it myself.

Poulgorm

If house prices are a simple supply / demand issue, how come prices kept going up and up when we were building 80,000+ units per annum?

quadrifoglio verde

Poulgorm wrote: »

If house prices are a simple supply / demand issue, how come prices kept going up and up when we were building 80,000+ units per annum?

Because there was demand for in excess of 80K due to cheap and easy money chasing it.

noodler

Poulgorm wrote: »

If house prices are a simple supply / demand issue, how come prices kept going up and up when we were building 80,000+ units per annum?

Credit with less restrictions on LTV or income


Credit which is no longer available at such levels.

seamus

The last bubble was mostly down to investment lending. Building more properties than were needed and people buying them up as investments.

While investment lending is currently running away with itself, we still have less houses than we need.

So in the event of another credit issue, investment purchasing may collapse but there will still be residential purchasers to take up the slack. Prices will drop to meet higher interest rates but we won't see the same problem before of people being stuck with private homes that are worth half what they paid and with nobody looking to buy.

The government needs to get a grip on investment purchasers and make it expensive for them to enter the market.

They ****ed it up last time and will **** it up again if we let them. Because investors don't learn. It's all a game for them, win some, lose some, and they'll come back and play the game again even after they've lost before.

MrDerp

Poulgorm wrote: »

If house prices are a simple supply / demand issue, how come prices kept going up and up when we were building 80,000+ units per annum?

Over half the market was investors, and there was schemes for buying in certain areas, along with 20% (low) capital gains tax and 10% year on year capital appreciation.

At the end of the boom over half the market was speculators leveraging to buy property, on the promise of low tax gains without even needing to rent out the property. As such, flipping was rampant on new property.

Hence about half of demand left with investors alone, and another chunk of demand evaporated as people saw what was happening, or lost jobs and/or a portion of their income. This is what caused demand and therefore prices to drop.

Also remember how many of those units were in speculative ghost estate locations. The section 23 stuff in places like Leitrim, for example. Those 80,000 units weren't all in cities and big towns

Samuel T. Cogley

Incidentally this talk of investors - surely they rent the units so while I agree property needs to stop being this default way to pump a few 100K into 'for the craic' is this not how there's a rental market? Is the suggestion that investors where leaving units empty?

dev100

jamesthepeach wrote:

I dont know what they are doing with the cash. One has a daughter with a wedding coming up. I suppose some might be going on that. Another just bought a new car. Im sure some just want cash on had. But tbh they dint tell me about what they do with the cash. It just comes up in conversation where they tell me about this great deal wheer you can remortgage and get cash. I was never into it myself.

Expensive way to pay for a wedding and car

UsBus

jamesthepeach wrote: »

I dont know what they are doing with the cash.
One has a daughter with a wedding coming up. I suppose some might be going on that.
Another just bought a new car.
Im sure some just want cash on had.
But tbh they dint tell me about what they do with the cash.
It just comes up in conversation where they tell me about this great deal wheer you can remortgage and get cash.
I was never into it myself.

If this craic is going on again, it's only a matter of time. We just can't help ourselves..😒

beauf

Samuel T. Cogley wrote: »

Incidentally this talk of investors - surely they rent the units so while I agree property needs to stop being this default way to pump a few 100K into 'for the craic' is this not how there's a rental market? Is the suggestion that investors where leaving units empty?

Its not that clear cut. Most are. Others are renting them out and maximizing the rent. Some dont want the hassle of renting it out. As the property is appreciating enough that they don't need the rent to make money. In the UK though they have a problem of it happening a lot.

Samuel T. Cogley

beauf wrote: »

Its not that clear cut. Most are. Others are renting them out and maximizing the rent. Some dont want the hassle of renting it out. As the property is appreciating enough that they don't need the rent to make money. In the UK though they have a problem of it happening a lot.

We really need to tax empty units very heavily along with unused land.

beauf

Tax is not the answer to every dang thing in this country.

You have to ask why do they not want to rent or build. Fix that problem.

jamesthepeach

beauf wrote: »

Tax is not the answer to every dang thing in this country.

You have to ask why do they not want to rent or build. Fix that problem.

I think many people think it is. Remember they wanted to tax text messages. That will probably make a comeback too.

Samuel T. Cogley

beauf wrote: »

Tax is not the answer to every dang thing in this country.

You have to ask why do they not want to rent or build. Fix that problem.

It's arguably the answer to this though. People will always be anti-tax, but this is an easy fix, it's more units vs. charging a fee to keep units empty thus making that option less financially viable. It's a win/win here.

It's easy to answer the not build question - it's more profitable to wait - remove that. Building regs play into this but there is no point throwing up a load of ****e or creating ghettos either.

Now on the renting side I'm all for a holistic approach, radical changes need to be made to address the balance however no matter how pro-LL the laws become there will always be people who work out it's better to keep the unit empty - disincentive that.