cuckoo property

TSQ

McGiver wrote: »

How about cooperative ownership, council built and run housing stock (for reasonable profit!)? Very common in Central and Northern Europe. Why it can't be done in Ireland?

Because IRISH politicians would be quite happy to run a piss-up in a brewery as long as the taxpayer pays for it. We have council housing stock, and i am amazed it is still being added to, if at a very low annual rate. Even properties that are generating rent don’t pay for day to day outgoings, never mind capital expenditure, and then there is the issue of phenomenal rent arrears and failure to evict people who aren’t prepared to pay even the pittance that they are asked for in rent. I have seen no proposals or even tentative suggestions that council tenants should pay a reasonable rent and be evicted promptly for non payment. People before Fairness and Common Sense would be up in arms. Getting a council house is like winning one of those lotteries where your winnings are paid out over a lifetime.

Mad_maxx

TSQ wrote: »

Yes, but you forget the ridiculously low rents council tenants pay - I think it is 15% of household income, so a pensioner living alone in a 3 Bed house could be paying under €50 a week in Dublin 6, plus there is an upper cap, not sure but think under €500 pm ( rant alert!! so you can have a People Before Profit TD on €87,000 holding on to his €450 a month council house and expecting us mugs to believe it is some kind of class solidarity thing) Out of this pittance the council has to pay maintenance, insurance, management including of antisocial tenants, interest on the loan to finance the build, etc. Rents don’t pay a fraction of the true cost of the day to day running, never mind providing a fund to pay for future builds. So that’s why councils would prefer to farm out the responsibility to the private sector, where rent allowance and HAP is capped at a fixed amount and the council has no additional outgoings. Simples.

Plus the private landlord will return half of his HAP payment in income tax

Ray Palmer

What .any people are missing is the planning rules. A built to let property is allowed have more apartments. If the funds weren't investing in the build there would be less places to rent. So the funds are providing extra accommodation. The properties are never a possible sale to individuals from plans. Later on they may be sold but probably never.
The builder makes enough money to build and just wouldn't sell to private individuals. If sold to private individuals there would be less accommodation on the site and prices would be higher. Rent would also stay high.
The tax situation for investment is still extremely unfair but it does mean investment and higher amount of properties available for rent. We need more rentals.

Assetbacked

Ray Palmer wrote: »

What .any people are missing is the planning rules. A built to let property is allowed have more apartments. If the funds weren't investing in the build there would be less places to rent. So the funds are providing extra accommodation. The properties are never a possible sale to individuals from plans. Later on they may be sold but probably never.
The builder makes enough money to build and just wouldn't sell to private individuals. If sold to private individuals there would be less accommodation on the site and prices would be higher. Rent would also stay high.
The tax situation for investment is still extremely unfair but it does mean investment and higher amount of properties available for rent. We need more rentals.

In reality Dublin needs to discourage job growth for a couple of years and let the last few years of aggressive job creation settle down. The jobs are being created faster than the properties are coming available. The government have no willingness to control it. Alternatively, an international recession event, spooking the foreign money and MNCs would aid our housing crisis.

Otherwise we will end up with a populist mish mash of politicians in power and something like Brexit could become a thing (remember we have as a country recently rejected EU treaties).

maestroamado

McGiver wrote: »

How about cooperative ownership, council built and run housing stock (for reasonable profit!)? Very common in Central and Northern Europe. Why it can't be done in Ireland?

Also the talks about supply and demand and competition bringing prices down are laughable - this is a simplistic economic theory for an ideal scenario of a market in a perfect competition state (which is a hypothetical scenario not existing in reality apart from some very specific niche markets). Economic reality is much more complex and looking only at supply and demand is too simplistic. Regulatory framework as well as government policies and degree of deviation from perfect competition state are quite important factors to consider. As far as I can see I would predict establishment of an oligopoly which obviously will lead to higher prices whatever the supply-demand situation is. This is aided by incorrect legislation and government incentives for these corporations (tax breaks, plus aiding tax evasion etc.)

Personally i think we need to "wake up"


https://www.thejournal.ie/un-ireland-vultures-funds-tax-4563403-Mar2019/

hmmm

maestroamado wrote: »

Personally i think we need to "wake up"

Personally I think we have a severe shortage of places to rent, and left-wing commentators should find some other topic to indulge their facile arguments. I haven't a clue who this UN person is, or why I should even care what she's doing spending her time writing about the Irish housing market.

Every one of these apartments is new supply, and no-one is forced to rent them. Personally I'm happy to see institutional landlords, and don't want to rent again from some chancer who sees it as his pension. Organise a commune somewhere if you're so concerned about supply, and see how many want to stay with you.

maestroamado

hmmm wrote: »

Personally I think we have a severe shortage of places to rent, and left-wing commentators should find some other topic to indulge their facile arguments. I haven't a clue who this UN person is, or why I should even care what she's doing spending her time writing about the Irish housing market.

Every one of these apartments is new supply, and no-one is forced to rent them. Personally I'm happy to see institutional landlords, and don't want to rent again from some chancer who sees it as his pension. Organise a commune somewhere if you're so concerned about supply, and see how many want to stay with you.

These UN people you are not aware of? we are currently looking for a seat at at the UN table (as a country)
I am very reasonably comfortable in my life but i think what is going on not good for us as people and the future of our people...
I gather from what you say you only care for (NUMBER 1) yourself...

Colonel Claptrap

Assetbacked wrote: »

In reality Dublin needs to discourage job growth for a couple of years and let the last few years of aggressive job creation settle down. The jobs are being created faster than the properties are coming available. The government have no willingness to control it. Alternatively, an international recession event, spooking the foreign money and MNCs would aid our housing crisis.

Otherwise we will end up with a populist mish mash of politicians in power and something like Brexit could become a thing (remember we have as a country recently rejected EU treaties).

This has to be a piss take.

You want to prevent people from getting a job?!

Topgear on Dave

Assetbacked wrote: »

Alternatively, an international recession event, spooking the foreign money and MNCs would aid our housing crisis.

And the drop in corporation tax income would probably help to crash the health service....... So its swings and roundabouts :pac:

Yes, this post has to be a piss take

Assetbacked

It's a fact that it would help the housing crisis. You both have talked about losing jobs and the exchequer losing money but I wasn't talking about that.

Nonetheless, you're also both wrong as less jobs being created going forward in Dublin does not mean a hit to the exchequer or a loss of jobs. They can be created outside of Dublin.

utmbuilder

18,000 homes built last years mortgage draw downs not increased since 2015

This will crash the rental sector given time. Not a bad thing, 2000 for a house mortgaged at 900 a month is not sustainable

Look at Australia's rental market, predicted to keep falling by 40%

overkill602

hmmm wrote: »

Personally I think we have a severe shortage of places to rent, and left-wing commentators should find some other topic to indulge their facile arguments. I haven't a clue who this UN person is, or why I should even care what she's doing spending her time writing about the Irish housing market.

Every one of these apartments is new supply, and no-one is forced to rent them. Personally I'm happy to see institutional landlords, and don't want to rent again from some chancer who sees it as his pension. Organise a commune somewhere if you're so concerned about supply, and see how many want to stay with you.

I agree about the UN they have no mandate from the people in this country they should butt out i personally think they should be reined in



they are all chancers then where do you think the money is coming oh yeah managed pension funds so its still the same thing if you want to generalize but i think they will generate higher returns because they pay no tax and charge higher rents.

maestroamado

Well my opinion is people cannot afford to buy or are outbid by managed pension funds.
Your point about the UN is valid.
The people have a mandate do not know or care for our citizens.
This is an article from today.

https://www.independent.ie/business/personal-finance/runaway-rents-at-record-high-as-tenants-pay-more-than-mortgage-38104655.html

The only positive thing is when the next financial crisis comes it will be funds in negative equity.

DubCount

maestroamado wrote: »

https://www.independent.ie/business/personal-finance/runaway-rents-at-record-high-as-tenants-pay-more-than-mortgage-38104655.html

The market is always logical. With supply of rental property continuing to fall, prices will continue to rise. External funds are not going to replace small landlords being driven from the market by increasing adverse regulation. Expect more lack of supply and more rent increases as the ordinary folk of Ireland pay for the raft of silly legislation our lefty politicians want to dream up.

For every action, there is an equal and opposite reaction.

Wanderer78

DubCount wrote:

The market is always logical. With supply of rental property continuing to fall, prices will continue to rise. External funds are not going to replace small landlords being driven from the market by increasing adverse regulation. Expect more lack of supply and more rent increases as the ordinary folk of Ireland pay for the raft of silly legislation our lefty politicians want to dream up.

The real world doesn't work in equilibriums at all, economic models such as dsge's have never been right because of this fact. Neoclassical economics has been our most predominant theory, a largely conservative model driven by largely economically conservative parties globally, in our case ff and fg, but left leaning parties have also played their part in this failure

IAmTheReign

Assetbacked wrote: »

It's a fact that it would help the housing crisis. You both have talked about losing jobs and the exchequer losing money but I wasn't talking about that.

Nonetheless, you're also both wrong as less jobs being created going forward in Dublin does not mean a hit to the exchequer or a loss of jobs. They can be created outside of Dublin.

Of course it does. The simple fact is that the type of people working for the likes of Facebook or Google wouldn't want to come to Ireland if it meant living somewhere down the country. If they don't setup in Dublin they setup in another city in a different country.

Assetbacked

IAmTheReign wrote: »

Of course it does. The simple fact is that the type of people working for the likes of Facebook or Google wouldn't want to come to Ireland if it meant living somewhere down the country. If they don't setup in Dublin they setup in another city in a different country.

At this point, for renters this is not a bad thing. I hope there is an international slowdown to halt the demand in Dublin for rental properties as the government can't fix the problem. This is the same as property owners not wanting the value of their home to decrease so I make no apology for it.

More records broken with the housing crisis. It should be declared a state of emergency at this stage with dramatic measures taken https://www.irishtimes.com/business/economy/properties-for-rent-reach-record-low-as-prices-hit-new-high-1.3889747?mode=amp

Topgear on Dave

Assetbacked wrote: »

At this point, for renters this is not a bad thing. I hope there is an international slowdown to halt the demand in Dublin for rental properties as the government can't fix the problem. This is the same as property owners not wanting the value of their home to decrease so I make no apology for it.

More records broken with the housing crisis. It should be declared a state of emergency at this stage with dramatic measures taken

International slowdowns can bring very VERY bad things, I know this from experience, I had to emigrate for a few years the last time it happened and my friends were out of work for months.

What dramatic measures? Like build more apartments?

Remember, the rental situation only affects a small proportion of the voting public and the politicians are loathe to piss off the rest who are happily accomodated in houses they may have paid off years ago.

THis can be fixed alright but the solutions are politically unacceptable. :pac:

Assetbacked

Topgear on Dave wrote: »

International slowdowns can bring very VERY bad things, I know this from experience, I had to emigrate for a few years the last time it happened and my friends were out of work for months.

What dramatic measures? Like build more apartments?

Remember, the rental situation only affects a small proportion of the voting public and the politicians are loathe to piss off the rest who are happily accomodated in houses they may have paid off years ago.

THis can be fixed alright but the solutions are politically unacceptable. :pac:

I'm not exactly in a good situation if I had to emigrate with my career choice. "Be careful what you wish for" etc. I suppose.

IAmTheReign

Assetbacked wrote: »

At this point, for renters this is not a bad thing. I hope there is an international slowdown to halt the demand in Dublin for rental properties as the government can't fix the problem. This is the same as property owners not wanting the value of their home to decrease so I make no apology for it.

More records broken with the housing crisis. It should be declared a state of emergency at this stage with dramatic measures taken https://www.irishtimes.com/business/economy/properties-for-rent-reach-record-low-as-prices-hit-new-high-1.3889747?mode=amp

You hope for a global slowdown? Are you mad? The last time there was a global slowdown unemployment hovered between 12-14% for years. It's hard to rent anywhere when you're living on the dole.

McGiver

Graham wrote:

While there are undoubtedly other factors at play here, basic economics still applies.

Graham wrote:

There are some significant providers of housing in the market currently but none of them with anything like a large enough market share to be able to control prices in a monopolistic manner.

Graham wrote:

Supply < Demand = Price Rises Supply > Demand = Price Drops

And I say bollocks to that and I say that as a person with a degree from a business university. Ain't gonna happen. This supply is demand thing is a theory for perfectly competitive markets which rarely exist in reality.

There's no level playing, there's no perfect competition, legislation distorting the market, there's monopolistic, oligopolistic behaviour, and most importantly price elasticity for rental services is very low (especially demand side).

There won't be significant increase of supply happening, demand will be only increasing with population and economic growth. Demand will outpace any increase in supply.

The only chance of a drop in price is significant emigration or reduction of immigration, some sort of a magic gov policy giving very cheap mortgages allowing masses to buy or economic crash causing some of the above along with a property crash and significantly reduced disposable income.

Amirani

McGiver wrote: »

And I say bollocks to that and I say that as a person with a degree from a business university. Ain't gonna happen. This supply is demand thing is a theory for perfectly competitive markets which rarely exist in reality.

Supply and demand rules apply to all market forms, not just perfect competition...

pwurple

McGiver, Graham isn't too far off. The prices are clearly rising due to lack of supply. The supply of both rental units and units to buy is at a record low.

However, yes, I agree demand will largely outstrip supply for the forseeable future. The tools any government has are fairly weak to begin with, I'm dubious as to what measures they can actually take that could improve it. The (frankly bizaar) policy of the govt to repeatedly penalise the service providers by stripping away security and stability from landlords by effectively banning evictions even when rent is withheld, and twiddling with RPZs, tax laws etc, is adding uncertainty and that sort of sideline tinkering looks to be making it worse. They are actively hampering supply, which certainly doesn't help.

McGiver

Amirani wrote:

Supply and demand rules apply to all market forms, not just perfect competition...

Essentially yes, but I mentioned several factors of why this simplistic view of "more supply will lead to decrease in rental price decrease" won't works in this specific market. My main points are that increase in demand seems to be higher than increase in supply, market is distorted, demand price elasticity is low and competition is far from perfect. As I said unless there's some sort of an economic crash drastically affecting demand side, prices won't fall.

McGiver

pwurple wrote:

McGiver, Graham isn't too far off. The prices are clearly rising due to lack of supply. The supply of both rental units and units to buy is at a record low.

I don't disagree, I just say it's too simplistic, theoretic idealistic point of view. Price elasticity and competition state are my main objections.

My my points:
1. Increase in demand seems to be higher than increase in supply.
2. Distorted market.
3. Imperfect competition (this will escalate with large corporate providers).
4. Low demand price elasticity - not many options of substitution (emigrate, live with grandma, buy a house, go homeless).

maestroamado

The point i was trying to make with this is.
The government are supporting financial houses in buying vast quantities of homes to be rented out.
These same Corporations pay literally no tax.
Where is the money going to come from to provide services for our people.
Traditional landlords with all of their faults pay tax on rent collected from tenants.
I do know some landlords are B*****ds and there should be firm rules here.

Assetbacked

IAmTheReign wrote: »

You hope for a global slowdown? Are you mad? The last time there was a global slowdown unemployment hovered between 12-14% for years. It's hard to rent anywhere when you're living on the dole.

Current growth is unsustainable. Dublin is absolutely stretched. It would be no harm to the housing situation for demand to drop.

RayCun

Assetbacked wrote: »

Current growth is unsustainable. Dublin is absolutely stretched. It would be no harm to the housing situation for demand to drop.

Dublin is by no means stretched. A lot of low density areas in Dublin. Build high capacity public transport routes, increase density on those routes, reduce the space used by cars.

Jaster Rogue

Assetbacked wrote: »

Current growth is unsustainable. Dublin is absolutely stretched. It would be no harm to the housing situation for demand to drop.

Assuming all other economic factors remain the same, which history has proven they most probably will not.

Is cheap property the only thing people remember from the last recession?

Interested Observer

RayCun wrote: »

Dublin is by no means stretched. A lot of low density areas in Dublin. Build high capacity public transport routes, increase density on those routes, reduce the space used by cars.

Some people would obviously prefer to solve the problem with misery.