How are people affording the house, kids, cars.....

MorningStar

I think many people have missed the fact theat the boom has been for the last 10 years with increaese of 20-30% year on year at the start. That wasn't everywhere with some areas going up a lot more and some not moving.
The building trade has increased and decreased new house production a few times in this ten year period. Right now we are peaking at building again but the planning applications are down right now. That means there will be less built in a few years. So supply is slowing already for the next 5 years.
The new stock of housing is also not the prime desiable house which no matter how boring is 3 bed semi with front and back garden. Due to demographic changes approaching (increase in divorce, single parent families, people staying single etc...) the desirable or needed home may change to somehing else like a 1 bed appartment. A boyount hosuing market does not actually require new building just property movement.
Currently I agree the economy is too reliant on the construction industry. I think it would be better to utilise current property stock better. My areas is a wash with retired people living in large family homes close to all services and the city. My friends are living in appartments and townhouses that aren't big enough for them and their kids and there are no services. Surely some kind of incentive scheme could be orgainsed where everybody wins. I have made my suggestions before but not many agree.

Victor

davidoco wrote:

There are NO tax credits for children, not a cent, this government don't want to encourage people to have kids.

Tax credits are an inefficient means of supporting people with children (because you have to be on at least a middle income for tehm to be meaningful), hence for the last 10-15 years it has all been funnelled into Child Benefit.

homeOwner wrote:

Tax allowances or credits or whatever should be given for putting your kids in a creche. I dont have any (yet!) but it is crippling some of my friends who have no choice but to pay astranomical creche fees (well technically they do have a choice, they could live in a cheaper location and stay at home but its not much of a choice).

Improving the supply side for creches would probably be better. Tax credits would end up determining the price set by creches and would lead to a tiered system where those on high incomes would benefit disproportionately and would fail to bring people into the job market.

MorningStar wrote:

THere are also a lot of new employment right for parents that aren't fair for some of us who don't want children.

Who's going to clean you up when you are 75, arthritic and incontinent? Those children.

Also the benefit accrued to 2 parents and 2 children is less per capita than that for just two adults.

MorningStar wrote:

A boyount hosuing market does not actually require new building just property movement. Currently I agree the economy is too reliant on the construction industry. I think it would be better to utilise current property stock better. My areas is a wash with retired people living in large family homes close to all services and the city. My friends are living in appartments and townhouses that aren't big enough for them and their kids and there are no services. Surely some kind of incentive scheme could be orgainsed where everybody wins. I have made my suggestions before but not many agree.

Changes last year to stamp duty should have some effect, but in reality we just need granny (and mummy and daddy) to move somewhere more in line with her needs.

SparkyLarks

Bluehair wrote:

This is precisely the problem and is exactly what many are sticking their heads in the sand about.

Everything is this economy is so tightly linked to construction that even a serious slowdown in new home building will have a bad effect, one that make itself felt throughout the whole economy very quickly.

The problem is that the whole situation currently smacks of being a house of cards. One significant problem and the whole thing will fall down.

Like Oil at 100 dollars a barrel

lomb

Victor wrote:

Changes last year to stamp duty should have some effect, but in reality we just need granny (and mummy and daddy) to move somewhere more in line with her needs.

lol, after a lifetime of work, and paying mortgages u expect someone to sell there large house and live in a 1 bed flat, thats a joke. its nearly impossible to mentally trade down to something never mind physically going and doing it.
still people may have to to get children on the property ladder.

MorningStar

Victor wrote:

Who's going to clean you up when you are 75, arthritic and incontinent? Those children.

I didn't say people shouldn't have children. The fact my boss can take 6 months off and additional time through the years paid and unpaid. Try and get a promotion when your boss is not there. If I took 6 months out for a personal life choice it would effect my job. I agree we need the next generation but not having children should be as valid and supproted.

Victor wrote:

Also the benefit accrued to 2 parents and 2 children is less per capita than that for just two adults.

In what way?

Victor wrote:

Changes last year to stamp duty should have some effect, but in reality we just need granny (and mummy and daddy) to move somewhere more in line with her needs.

The changes only really helped the FTB but not really as many prices went up. THere was no benifit to encourage people to down grade. Some kind of pension benifit and FTB involvment benifit would be what I want

lomb wrote:

lol, after a lifetime of work, and paying mortgages u expect someone to sell there large house and live in a 1 bed flat, thats a joke.

Nobody suggested moving into a 1 bed flat. I was thinking more like a small bungalow that could cater better to ageing couples or individuals. It also an idea of incentives not forced movement not all would take it up either. When people get old they do have to get used to the idea they can't always remain where they are. At the moment there is a lot of money pumped into grants to adjust property for OAPs. It's grossly inefficent my gran livs in an old corpo house where the bathroom was downstairs so we needed to get her a bathroom upstairs. We lived in a similar house very close and did it for less than €3k yet after 6 months of documentation for my gran we got hers done for €16k. It was a higher spec because it needed to be wheelchair friendly but it was not €13k. That's your 13K but that's not it her gutters have been replaced , alarm allowance, drafting exclusion and additional home help. I'd guess there has been at least €35k spent on her house by the council. The same applies to her neighbours. I think this money could be better spent and benifit more. At the moment the people who will benifit in the long term are realistically going to be my parents who already own additional property. They think it is unfair too but there aren't other options.

dublinguy2004

Eh I'm not sure what institute educated you. Anyway, I sense a bit of resentment about people who live in houses beyond their needs. People who buy a house are entitled to do whatever they want with it and I think the government should not interfere in any way with ones property whether there's a single bachelor or a house full of kids inside.

And as for your friends who complain because they live in tiny townhouses and apartments: Well it's their fault if they're unhappy. Nobody forced them to buy a property in public-services-lacking, gird-locked Meath or Celbridge or Lucan or some other west-Dublin suburban hole. It's a dog eat dog world out there and maybe if they planned their lives better, they wouldn't be complaining. In fact, they should count themselves lucky.

MorningStar

dublinguy2004 wrote:

Eh I'm not sure what institute educated you. Anyway, I sense a bit of resentment about people who live in houses beyond their needs.etc...

You really should say who you are talking to if you are going to start with an insult. If you are talking to me say so and re-read what I said.

Rubens

I know of a couple who top-up their mortgage up on an ongoing basis to:

1) Upgrade their car
2) Buy electrical goods
3) Go on holiday
4) Pay off Credit cards

Madness - they come out with stuff like "Well it's only an extra 50euro a month..." - and I say yeah "for the next 20 years" (and thats at the current interest rates)

There are a fair number of people living this way - Imbeciles.

RJ

uberwolf

back to the original topic somewhat. Fintan O'Toole had an excellent comment piece in the Irish Times earlier in the week on this topic.

He argued convincingly that we as a nation have completely changed our attitude to debt. Owing money no longer carried the stigma of poverty. Having a loan out to finance a lifestyle is now the norm. Easy come, easy go. The ease of securing free money creates an illusion of security which has placed many in a very precarious position.

My favourite line from the piece was reflecting on the fact that the desperate times in the eighties saw a nation crippled by debt but individuals in the black. The converse being true now. Debt, like our state assets, have simply been privatised.

MorningStar

uberwolf wrote:

He argued convincingly that we as a nation have completely changed our attitude to debt. Owing money no longer carried the stigma of poverty. Having a loan out to finance a lifestyle is now the norm. Easy come, easy go. The ease of securing free money creates an illusion of security which has placed many in a very precarious position.

Did he consider that the people who were ones from less well off backgrounds are getting themselves into debt. To me it seems pretty convieviable that the problem is the same attitude to money exists but now certain people who were not allowed credit are being given it now and don't know what to do with it. I am not try to be snobbish but social economic background has allways been an influence on lifestyle. There are always generational differences which changes things but it seems like more too me. I would never think of owning something on credit like a TV but I remember a lot of people who had to when I was growing up. If people were accustomed to that idea of paying on the never never it makes sense as credit is alowed they may apply it to everything as we are told things like money has never been so cheap. The principle attitude they grew up with sill applied to their lives but the maths changed and they just aren't money smart!
Some questions that come up here are a little scarey because some people really don't understand certain basics. Somepeople don't understand how you are meant to deal with a car on their mortgage. Watching the TV show with Eddie Hobbes shows this.

Bluehair

MorningStar wrote:

Did he consider that the people who were ones from less well off backgrounds are getting themselves into debt.

I think you have an interesting point here. I know quite a few people from poorish backgrounds who are now living the high life on credit.

We're not talking poverty here or anything but from perhaps large familys where the kids never got the luxuries that maybe some of their peers enjoyed.

Now they're older, in relatively well paid jobs with no commitments like kids themselves and most importantly; real easy access to loads of credit.

Hey Mum and Dad has to suffer so why should we deny ourselves now? The more I think of it the more people I know with this background... Whats worse is no-one has ever taught them any kind of financial prudence. They grew up living hand to mouth but aren't seeing the consequences of it for their parents because many of them are now equity rich.

It's a sad situation.

BrianD3

I can't believe that this thread has gone on for 40+ posts and nobody has mentioned Tax Evasion. I believe that this is a bigger problem in this country now than ever before. Even when income tax rates were higher than they are now the rewards for evading tax were less than they are now. The building industry is probably the biggest in Ireland today and there is huge potential for evading tax in this industry. There are literally billions being lost to the exchequer every year through tax evasion and this money is going into foreign holidays, high living etc.

This is in addition to legitimate Tax Avoidance and as already discussed, easy availability of credit.

MorningStar

BrianD3 wrote:

I can't believe that this thread has gone on for 40+ posts and nobody has mentioned Tax Evasion.

I don't disagree with you about tax evasion but I am not sure how it is relevant to how people are affording their lifestyle. There are a lot of people living the big expensive lives that don't have jobs that would allow tax evasion. There are certainly many small contractors that avoid tax and bigger ones who hire accountants to come up with places to hide money.
There is tax evasion by a lot of newer landlords too basically because they think all landlords do this. I reckon in 10 to 15 years the revenue will be taking houses off people alright. I don't think people are actually getting much income from the property right now but I am sure they are avoiding tax. Hard to get facts but I have met new landlords who are amazed I pay tax on rent.

BrianD3

MorningStar wrote:

There are a lot of people living the big expensive lives that don't have jobs that would allow tax evasion.

True. There are thousands of people with expensive lifestyles who don't evade tax at all and finance their lifestyles through credit. But at the same time there are thousands of others who fund their lifestyles through tax evasion. Tax evasion is an important factor but by no means the only factor.

MorningStar

BrianD3 wrote:

Tax evasion is an important factor but by no means the only factor.

You could be right but I have not seen anything to suggest that. It could be just my circle but I only know of one who really could and probably is avoiding tax that allows him to fund his life. Most of the time it appears to be through credit. A guy in work took out a €6k loan for his TV! I don't get that. Right now there isn't much to suggest saving as rates are so low.

crazymonkey

i bought my hose 2 yrs ago and i have a car, i am heavily in deth at the moment but its getting easier, with proper budgeting it is possible to lead a comfortable lifestyle, ok if the interest rate goes through the roof i maybe in trouble, but at 26yrs of age i am willing to take that risk, its better than paying rent in my mind,,

magpie

There must be an awful lot of people with an awful lot of money around Dublin

There are, they're called Culchies.

EU funding for unneeded produce + rezoning of farmlands for building + selling off the licence in the village pub = 05 D mercedes and €1.5 million gaff in Sandymount.

People don't have that lifestyle through work, salary or savings.