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

That's not entirely true though is it?

People are competing against councils and buy to rent multinationals also over a very low stock of houses. Wages have not and will never match the growth in housing. Is there any point going through this though or are you going to make claims about the overwhelming majority doing great? Maybe look into hidden homelessness and the level of 18-30 year olds living in their parents houses or look at the amount in that age group who room share or rent a property.

An entire generation is locked out of home ownership at any level, its not because of "life choices".

So I should thank a group of landlord TDs for re-inflating rents and property prices after a recession they and their ilk caused. Jesis Christ Almighty.

That all you got?

So its not life choices that keep many people in the 18-30 cohort out of home ownership right?

Is it more possible that all our builders left/went bust during the recession, hardly any homes were built, the population increased, now theres no houses and everyone who wants to buy is fighting over the crumbs left? Yeah the odd person 18-30 might be on 100k(By the way, that only will get them 350k in a mortgage so I hope their partner is earning) a year but it certainly is not the majority and it certainly is not down to life choices.

What do your own kids do for a living? Did you gift them land maybe to get them started if they own homes? Are they over 30? - i'm just surprised you were so quick to put this down to life choices, that's why I ask. I wonder what circumstances gave you that view.

How many 18 yr olds are trying to buy homes? And it has always been more challenging for a single income to buy a property, there is nothing new in that.

Is that all I got? With small LLs exiting the market professional LLs are absolutely necessary, Ireland is not unique in that. Without councils buying homes our homeless figures would be far worse, the people they house are unlikely to be in a position to purchase it themselves. So while I do appreciate the irony that the State is competing with buyers, they do so with good reason.

Yes the builders went bust, and many fear of doing so again due to the cost of building and the difficulty with obtaining credit. I know builders that were large scale in the Celtic Tiger era who are not interested in developing multi unit housing, they want one off builds or extensions because they know they have a better chance of making a profit/getting paid. The Government can’t order them to take the risk again, and if they incentivise it to the point where it appeals to them, the public complain that nasty developers are at it again.

As for my own kids, what they do has no bearing on this conversation, I did not give them any land nor money, but I did give them advice, “don’t rely on others to help you”. They make their own way in life.

What age did you purchase your home? I gave you a bracket, was it not uncommon for people 20-30 years old to purchase houses and raise families in your day? 18-30 is to cover all the people who live on couches or in their childhood bedroom because they cant get on the property ladder.

"With small LLs exiting the market professional LLs are absolutely necessary, Ireland is not unique in that. Without councils buying homes our homeless figures would be far worse, the people they house are unlikely to be in a position to purchase it themselves. So while I do appreciate the irony that the State is competing with buyers, they do so with good cause."

Absolutely nothing to do with my point, you said it was down to personal choices a few posts back - so are you suggesting now its not ?

I bought my first home, an apartment in a small village outside London an hour from where I worked in 1996. I was 25, living with my then girlfriend, now wife. We put every penny we had into it and struggled to pay the mortgage for a while.

You asked me “Is that all you got?” When I posted that people are now living in the houses that councils/investment funds buy. And then went on to explain “what I got”. There is a benefit to those Councils/funds buying properties, people live in them.

Regarding personal choice, as you keep dwelling on it. Why is there an incessant need to blame others, be they your peers, or the Government for your choice of career? Others chose a different path and are earning more, that is life.

The Irish government had no say on the interest rates!!!!

How can you possibly blame them when even the central bank of Ireland who’s decision making is independent of the government didn’t even have control over interest rates as it is undertaken by the ECB for the whole of Europe.

Who will serve you your coffee if we all become doctors and investment bankers though? I have a third level education and earn above the median national salary, I am coming at this from a position of experience of the current market and not some opinion based on how hard I worked nearly 30 years ago.

You should take a look at the place where you bought that apartment now and see could you do it again in the same job - use glassdoor.com to get an idea of the salaries in the area.

It seems to me that you are simply delusional and more than happy to stick with your ill informed opinion that an entire generation simply picked the wrong careers and made poor choices even when presented with evidence that this is simply not the case. Maybe that exercise will show you what that age group are currently up against.

Could I buy it today for what I would be paid? I don’t know, different market conditions and as it has been 26 years and I don’t live in London I'm not knowledgeable about either the job or housing sector. What I can tell you is that a similar apartment in the same development is advertised for quadruple what I paid for mine, but it is in better condition than when I bought.

I don’t think people picked the wrong careers, there is more to it than just owning a house. But there has always been higher paying jobs in society, in Ireland at the moment there is just a lot more of them. I don’t blame people for choosing a career path, I just don’t agree with them blaming others because they don’t have what the others have.

A lifetime of bitterness awaits you if you continue to fixate on Bertie.

milton Friedman assumed that central banks had control of the money supply but that’s not the case money supply is increased everytime credit is issued and destroyed when repaid.

The lowering of interest rates was to encourage credit growth but this wasn’t as successful as expected because banks were unable to find opportunities to lend within their risk appetite. And instead we saw an explosion of credit being issued by funds because it was not as regulated as banking. Most of this credit found its way into assets pushing up prices because these funds attract investors who are looking for investment opportunities.

the main driver of QE was to lower rates to increase investment and create jobs and pull Europe out of recession…the fact that there was a unforeseen impact on asset prices is well documented. An ECB paper on this topic was released about 3/4 years ago.

maybe I misunderstood your post but it sounded like you were blaming government for 15 years of low interest rates.

You also need to take into account that interest rates in the Uk fell 600% (6% to 0%) during the period.

Just looking at your 300% increase in salary it’s an average of 12% pa and if you take into account the reduction in rates during the period which would have resulted in an increase in disposable income the gap narrow.

I for one can remember 1996 and the majority of people had practically no disposable income compared to what they have today. I’m not saying it wasn’t easier to buy back then especially as most properties were in negative equity in the Uk at the time but you need to factor in all the facts when doing a comparison. It’s like comparing buying a property in 2012 to today in Ireland.

Grand, so you dont think we all picked the wrong career.

I would agree firmly with you on living within your means, 100%. However our housing crisis is not Dublin-centric or even limited to cities, its nationwide with the exception of a handful of counties. Not to mention the material rises have yet to really have an impact on new builds for sale so id imagine the crisis will deepen in that sense.

Aside from the unfairness of having to live far away from ones home forever how logistically can it work long term? How can Dublin be sustained by middle income workers living in rosscommon for example?

you need to put some thought into the impacts of your plan as it’s not as simple as you suggest

e.g.

1 if you build up then you also need to be improve infrastructure, transport, schools etc. is this included in your plan and who pays for it.

2 it shouldn’t make a difference if a TD is a landlord as long as they follow the rules like everyone else so that it is clear if a conflict of interest exists. If a change was to be made I would suggest that anyone that doesn’t declare correctly looses there seat along with their state pension.

3 I wouldn’t use Dubai as an example as they effectively have slave labour and the no of deaths in construction is crazy. This is like asking to bring back slavery. I would also like to know why you think construction workers should take a pay cut they have families to provide for and all you would do is get less people going into construction/trades which will lead to problems down the road.

4 apply shared equity to existing houses doesn’t increase the number of houses being built and would only lead to upward pressure as a result.

5 the government wouldn’t be able to borrow 20 billion under EU budgeting laws. you would have a better chance of raising capital by housing agencies issuing bonds but to be able to make that work they would need to pay an attractive coupon so you won’t have cheap rent etc.

6 would be easier and quicker to build a new city on a green field site. Cost of high rise buildings is expensive and to do so in a historical city will be slow.

7 I tend to agree with this but you need to accept that they will need to be shoeboxes for it to be financially viable.

8 so you are saying that councils should buy more of the existing housing stock at the expense of FTB’s and private renters.

9 yet again something that has been done before with dire consequences.

10 if government build mass scale social housing it will mean less homes for FTB’s as construction resources get redeployed. This means reduced supply higher prices

11 funds provide nearly all the financing for new builds you need to be careful you don’t inadvertently reduce the number of new builds. They also provide supply for renters so how do propose this gets replaced and the rental situation doesn’t get worse.

12 a vacancy taxes is required but at 100% it would lead to less new builds

13 1 and 2 bed apartments are required but they will be shoeboxes and expensive

14 I would argue that the only people that can afford retrofit are people in social housing because government pays and not the well off.

15 thought you were against increasing demand on the buy side as this is what this would achieve

16 yet again a policy that would result in shorter supply

17 why not just declare war on the USA get them to bomb the city and then make them pay to rebuild it. These laws are there for a reason and if you built a new city you don’t need to worry about it.

18 you would need to increase pay dramatically for this to happen and there would be no guarantee that they would be any better. At the end of the day these guys are heavily involved in decision making just look at what is being paid to consultants that advice the government…they will all be qualified.