Irish Property Market chat II - *read mod note post #1 before posting*

wassie

Op-ed article from downunder highlighting how high house prices have contributed to growing wealth inequality - lessons that can be shared across most developed western countries including our own.

Also notes housing is creating a 'Jane Austin world' whereby "The growing divide between the housing "haves" and "have nots" is being entrenched as wealth is passed onto the next generation."

https://www.abc.net.au/news/2023-01-09/how-housing-made-50-per-cent-of-australia-richer/101825752

Goes on to suggest how the problem should be addressed:

Favourable tax treatment for property owners should be abolished (Aus also has no inheritance tax as such, but capital gain liabilities may apply) - unlikely as the home owner is a protected species as far as the politicans are concerned.

Secondly - build more houses by fixing the planning system - again required politicians to act.

jj880

https://www.boards.ie/discussion/comment/120086491#Comment_120086491

It is their problem. Why shouldnt they want more for what they are offering. A single person on 80k income with 60k saved who cant get a 3 bed semi in Dublin (not some fixer upper hovel half way to Athlone) has everything to do with a dysfunctional housing market. It just suits you to say it isnt. Call me ignorant all you want but you are pretending to be ignorant and it's obvious.

fliball123

https://www.boards.ie/discussion/comment/120086618#Comment_120086618

With that persons budget they can get finance for a house worth 400k using the FTB grant, 4 times their salary and taking 50k from their savings leaving 10k for solicitor fees , stamp and to get some furniture. Currently in Dublin on daft there is just under 700 properties for sale with 3+ bedrooms ranging from 175k in Finglas all the way to the top of your budget.

Dav010

https://www.boards.ie/discussion/comment/120086618#Comment_120086618

That simply isn’t the way it works. A single person who can’t buy any house despite earning 80k and having 60k in savings is a different scenario to the same person wanting a 3 bed house near work in one of the most expensive locations in the country.

This stuff isn’t difficult to understand.

PokeHerKing

https://www.boards.ie/discussion/comment/120086618#Comment_120086618

Leaving aside the fact that Doll can afford a 3bed home in Dublin on their current salary.

In a functional market where's the demarcation between wants and needs?

Or do you envisage a functional market being a utopia where we all get to live in the home we most desire?

growleaves

https://www.boards.ie/discussion/comment/120086618#Comment_120086618

Walkinstown is 6.5km from Grafton Street.

"Yeah its a 3 bed house in South Dublin but its not the right kind of 3 bed house in South Dublin!"

Okay cool. Yeah someone with 60k + 80k p.a. is suffering from hardship clearly.

Cyrus

https://www.boards.ie/discussion/comment/120086450#Comment_120086450

i want a 6 bedroom house on the Coliemore road, my existing dwelling isnt to my taste any more, i look forward to the new thread.

FedoraTheAura

https://www.boards.ie/discussion/comment/120086597#Comment_120086597

Intergenerational wealth is such a massive problem. There was a study done back in 2020 and of Irish families on the median income, those that own their own property had a net worth of over €300,000, those that rented had a net worth of about €5,000. Think of the amount of money homeowners have to pass on compared to those that don't.

Those in power are worried about their next election. Kicking the planning system into gear and looking at inheritance tax could change things a good deal but when they picture it they just see the dole queue forming in front of their eyes as their base, largely homeowners, turn to a party that will promise the opposite.

herbalplants

"Thousands of people are expected to attempt to secure a home this morning via an auction for houses backed by Wicklow County Council via the Affordable Housing Scheme.

Applications opened at 9am for two-bedroomed homes starting from €220,000 and three-bedroomed homes starting from €252,000 at Murragh View on the Greenhill Road. "

They are reasonably priced.

Villa05

https://www.boards.ie/discussion/comment/120086883#Comment_120086883

How is intergenerational wealth a problem, is it a crime to be wealthy.

Land value tax would probably be the best solution as its value is heavily derived from the infrastructure surrounding it, largely provided by the tax payer.

Discourages hoarding by placing a cost on inaction and idleness

FedoraTheAura

https://www.boards.ie/discussion/comment/120087016#Comment_120087016

Obviously it is not a crime to be wealthy. Are you saying intergenerational wealth isn’t causing unfair divides in society? The widening yawn in intergenerational wealth means one child can be left nothing and has a drastically reduced chance in succeeding in life, while another is handed an incredible head start. That gap between is widening, not decreasing. It is a problem.

You only have to look at the bank of mummy and daddy increasingly raiding their savings to get their darlings to join them on the property ladder, while those with parents that can’t help them out, may never be able to do so.

I agree an introduction of a LVT could help, but it needs to be part of a package of changes, 1 thing isn’t going to fix the housing crisis.

https://ifs.org.uk/news/wealth-divide-between-young-people-wealthy-parents-and-those-poor-parents-big-and-greater

Bass Reeves

https://www.boards.ie/discussion/comment/120086883#Comment_120086883

If both couples had the same medium income how come one couple bought a house and one couple are still renting. You need much more analysis.

I worked with people with similar incomes for all of my working life with the same choices and opportunities I had. However they choose to spend there earning differently. Some went on foreign holidays every year, or changed there cars every 2 to 3 years. Other followed Munster Rugby on both there home and away matches, others just smoked and went to the pub more often.

Give ten people 1k/week every week for 5-10 year and give them a house and 5k in savings. There will be 2-3 that will be in debt from discressonary spending, there will be 2-3 that will spend it all, a couple that will save a little bit with the 5k a couple that save a decent amount and one person that will make a investment decisions on that income.

In the last 40years there is a section of society that started with little, that have worked hard and have serious saving or have investments that have paid off. That is the reality of life.

DataDude

https://www.boards.ie/discussion/comment/120087016#Comment_120087016

Because a fundamental human feeling of ‘fairness’ becomes comprised. Two equally hard working teachers/nurses/guards - one can’t get a leg up in life. The other inherits €5m because their great great great great grandad had a farm in bray which got zoned for housing. It’s the very definition of ‘unfair’ which then erodes at the general fabric of society.

Youd have people on boards foaming at the mouth at those ‘doing nothing’ getting €350 a week from the PUP but randomly get €10million given to you by a great uncle and it’s ‘well deserved’ and the 33% tax has been stolen from you.

Frank Bullitt

https://www.boards.ie/discussion/comment/120085395#Comment_120085395

Why shouldn't they? I don't agree with the renting out the room part but surely if someone wants to buy a house and that happens to be a 3 bed etc, that is their choice regardless of if there is to be a family in there or not? A home (with however many bedrooms) shouldn't have to be bough by a couple with the intent of raising a family. Why the hell would that matter?

growleaves

https://www.boards.ie/discussion/comment/120087631#Comment_120087631

Ten years ago, when Occupy Wall Street first became popular in 2012, socialism was aimed against "the 1%". IOW wealth inequality was seen as between ordinary people and the ultra-wealthy.

Now it seems to be increasingly directed at people who are slightly above the median: small landlords and people who inherited money from parents (often split between multiple people).

Many people see generational wealth as 'well deserved' because they view families as an organic continuous unit, rather than people randomly linked by birth. So that family has earned money through sweat and hard work over two generations.

Whereas welfare - unlike inheritance or alms-giving - is money taken off people through taxation and re-distributed impersonally.

Bass Reeves

https://www.boards.ie/discussion/comment/120087631#Comment_120087631

What a load of rubbish, that is a 50k-1 senario. Its more likely that one of the couple's saved harder and choose to cut there cloth to what suited.

The other couple made different choices

jimmybobbyschweiz

The more left Ireland goes the more likely inheritance gets targeted. The big issue with the inequality becoming entrenched comes from the staggering rise in house prices the last thirty years; nothing special happened to the houses in that time do it was largely luck which lead to a lot of people becoming wealthy from their house appreciating in value. This unearned wealth is exactly what should be targeted by the State.

The ideal property market only increases or reduces in cost, in line with mortgage rates, so a couple percent change in a ten year period.

DataDude

https://www.boards.ie/discussion/comment/120087703#Comment_120087703

But thats utter nonsense. I’ll inherit more money they any professional could earn in 5 lifetimes. Literally because my great grandad had a farm which got passed down and then zoned for housing (I’m not joking).

I mean I could claim my ‘organic continuous family unit’ led to my great success and wealth to which I was an integral part. Or I could acknowledge that I contributed as much as any Joe Soap on the street and my inheritance is a pure freak accident of birth.

growleaves

Btw I'm not against welfare I just understand why other people don't like it.

SwimClub

Ultimately evolution wants to give successful genes a head start so inheritance is actually quite a natural process.

(runs out of the room ducking) 🤣

jimmybobbyschweiz

https://www.boards.ie/discussion/comment/120087671#Comment_120087671

They shouldn't buy it if they can't afford it themselves and the main point I made was that ensuring that a single person has access to a three bedroom home in South Dublin is not the barometer we need to class the market as healthy. A couple with or without a child, on average salaries, should be able to access the borrowing that would enable them to buy a 3 bed home in a better functioning market.

jimmybobbyschweiz

https://www.boards.ie/discussion/comment/120087745#Comment_120087745

So is survival of the fittest so it is more natural to let people who can't pay their mortgage or afford their rent to just get on with it and live on the streets, force them to survive instead of having a nanny state swoop in and underwrite their housing costs.

DataDude

https://www.boards.ie/discussion/comment/120087745#Comment_120087745

Not that I agree, but could potentially get on board except the vast vast majority of Irish wealth of the last 50/100 years was generated through purely accidental land holdings which then got zoned at the right time. Completely out of their control/influence.

Not like we had a generation of revolutionaries changing lives and building massive companies. Nope, often barely literate people with a bit of land in right area at the right time.

growleaves

https://www.boards.ie/discussion/comment/120087735#Comment_120087735

There's a strong element of luck if you're inheriting that much.

That doesn't make it 'random' though. You had forebears that managed to become landowners (that part may not have been easy, I don't know) and managed to pass on their genes. Result: you.

DataDude

https://www.boards.ie/discussion/comment/120087788#Comment_120087788

Go me!

SwimClub

https://www.boards.ie/discussion/comment/120087783#Comment_120087783

It wasn't a serious comment!

Villa05

https://www.boards.ie/discussion/comment/120087631#Comment_120087631

https://www.boards.ie/discussion/comment/120087245#Comment_120087245

You are both looking at one of the symptoms of the problem rather than the actual problem of unaffordable housing.

How many parents got caught in 2008 by either helping there children or going gaurentor on the mortgage

Parents helping children is a response to a bubble that further fuels the bubble

Put in a robust land value tax that extracts 4billion a year from the property market rather than the state pumping in 4 billion a year further raising prices. Use the 4 billion to build affordable rentals creating further income for the state and increasing supply

Land value tax will cool future bubbles creating a sustainable property market

FedoraTheAura

https://www.boards.ie/discussion/comment/120087703#Comment_120087703

‘’Many people see generational wealth as 'well deserved' because they view families as an organic continuous unit, rather than people randomly linked by birth. So that family has earned money through sweat and hard work over two generations.’’

These people you’re talking about would be wrong then as they believe there are two generations doing ‘hard work’ but the second generation doesn’t haven’t to work hard or sweat at all to receive the wealth. That’s the point.

SwimClub

"doesn’t haven’t to work hard or sweat at all to receive the wealth"

Take the British monarchy, Andrew is so many generations in he's even lost the ability to sweat.....

Villa05

https://www.boards.ie/discussion/comment/120086964#Comment_120086964

This is a big part of the problem, people claim that intergenerational wealth is an issue and completely overlook this scandal.

These homes should be state assets released to the affordable rental market generating income for the state that could be reinvested in building more. This way they are a help to multiple families rather than a gift to 1 family in a lottery.

Taxpayer funded/subsidised projects should not be a gift to 1 person/family. From my experience, in the past desirable council houses had a habit of going to persons engaged in political canvassing