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Softening house market?

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  • Registered Users Posts: 398 ✭✭jimmybobbyschweiz


    A lot of businesses need to go to the wall, it's important to note. We have had a ridiculous level of support from the State the last few years keeping companies afloat but a lot of them are only able to survive with State support. This is not healthy and will ultimately result in good cash being thrown at bad from the State if the bullet is not bitten. COVID is over 8 months now and the energy crisis will result in some supports but the unfortunate reality is that there are perhaps too many unviable businesses doing a fast one. It's been too long since we had insolvencies and complacency and dependency are not healthy for our SME ecosystem. Of course, this obviously will be tough for quite a few businesses and people so the government should really direct spending into the SME sector to stimulate transition and recovery, not to prop up zombies.

    It's going to be a wake up call for sure for people who have grown accustomed to spending like there's no tomorrow and taking on car and household goods' loans like its free cash.



  • Registered Users Posts: 19,686 ✭✭✭✭Donald Trump



    That is a worry in relation to house prices as well. There is a good chance that the government will intervene even more than it already does to prop up those who inflated the market by being reckless ... at the expense of the people who were more prudent. It happened after the crash in 2008 as well.


    Even talks about trying to bring in tax reliefs for renters, or income tax reliefs for landlords. It would all prop up the market beyond where it should be.



  • Registered Users Posts: 398 ✭✭jimmybobbyschweiz


    It's a con the housing market. Artificially high in prices because of government actions and hardly any market interference to justify the prices.

    If the government was serious about fixing the market it would stimulate supply and not keep inflating demand. Something as simple as tax credits and employer's PRSI cuts for home builders and their employer's for the next few years, using the Irish investment fund to grant low cost loans to home developers and then a totally free measure that can be done overnight; change planning rules to streamline permissions and adopt a "yes, unless strong public interest reasons exist to reject the development, balancing the need to proritise for the foreseeable future the mass delivery of all types of housing for the citizens". It's a question of will.



  • Registered Users Posts: 19,686 ✭✭✭✭Donald Trump



    I wouldn't give anything to the developers in terms of tax reliefs etc. The State should have plenty of tools at it's disposal to prevent the hoarding of building land. I don't think you were suggesting that though



  • Registered Users Posts: 398 ✭✭jimmybobbyschweiz


    Well, they already do give them reliefs with rental assistance and grants to FTBs so it would be about redirecting that cash to the supply side and away from the demand side.



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  • Registered Users Posts: 19,686 ✭✭✭✭Donald Trump



    Ideally, that money should be cut and instead used to fund State building of houses. The structures that might have enabled that need to be rebuilt.


    You are a new poster, but I have pointed out on this thread a few times in the past that if the State suddenly removed all direct and indirect supports to the market (HAP etc.) then we'd have something resembling fairness. They all amount to massive subsidies to existing home owners



  • Registered Users Posts: 18,572 ✭✭✭✭Bass Reeves


    Loans are already low cost as the interest rates are very low 2-2.5%. the ECB is hinting that it will stop at 3% and is willing to live with inflation @5star02707@ 5%. We have had state lending to large commercial enterprises before and it's a mess with howls of favoritism. Most people employed on building sites are subcontractors or are employed by subcontractors. Developers tend not to employ staff directly

    Any change to planning rules ends up court. The government already tried to stream line planning and plannings granted under this have ended up in court and been turned over.

    Slava Ukrainii



  • Registered Users Posts: 273 ✭✭Galwayhurl


    No government would ever remove Hap, Ras etc. They'd never get in in the next election. I totally agree that they are 2 of many policies that keep prices inflated though.


    As an aside, there needs to be some stick to ensure that developers use their planning permission within 3 or 6 months of it being granted. Too many sites are left unused, seemingly with the owner waiting for prices to escalate further so that he can flip it and make a killing.



  • Registered Users Posts: 19,686 ✭✭✭✭Donald Trump



    Yes. There needs to be a proper site tax. I think that when an area is zoned residential, an annual tax should kick in. That tax should increment over time too. There can be a waiver of a reasonable time at the start. If the person does not want to sell the land and does not want to pay the tax then they can apply to have the zoning removed and reverted to agricultural or greenbelt!

    After that, once planning permission is obtained, it should be subject to a higher rate of tax which also increments over time. There can also be a reasonable waiver here too so that a developer should be able to build and sell within that time.

    Use it or lose it basically. What the system now has is that there is a certain amount of land rezoned. That is snapped up and hoarded Then if there are proposals to rezone more due to housing shortages ..... they come back with the argument "sure we have loads zoned and it hasn't been used which means there must not be need for it". Basically holding us to ransom.



  • Registered Users Posts: 949 ✭✭✭Ozark707


    Where did you see that the ECB are willing to live with inflation? Secondly where are you reading that they will stop raising soon?



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  • Registered Users Posts: 19,686 ✭✭✭✭Donald Trump



    They would have never said such a thing. They might have expressed a view that they would not panic in allowing it to surge past the target rate temporarily but they have a target rate for good reason. They would never have indicated a willingness to live with high inflation for anything other than the short term. Even then, it would only be in the sense that they would be hoping it would abate of it's own accord.


    Inflation numbers in the US surprised the markets last week by being higher than expected. Markets are now factoring in at least a 75bps rise later this week. That will add to inflationary pressure on the Eurozone countries.



  • Registered Users Posts: 949 ✭✭✭Ozark707


    Exactly, I was wondering if I had missed some newsflash....



  • Registered Users Posts: 949 ✭✭✭Ozark707



    Article in FT indication rates across the board are expected to be far higher than was previously expected.

    Investors are pricing in a sharper surge in interest rates over the coming months after the world’s major central banks strengthened their resolve to tackle soaring prices, signalling they would prioritise inflation over growth. A Financial Times analysis of interest rate derivatives, tracking expectations for borrowing costs in the US, UK and eurozone, showed markets expect a more drastic pace of tightening during the final quarter of 2022 than they did earlier this year.


    The shift in mood comes ahead of crucial policy meetings by the US Federal Reserve, the Bank of England, the central banks of Norway and Sweden, and the Swiss National Bank this week. It follows a poor August inflation reading in the US and warnings from monetary policymakers on both sides of the Atlantic that they were becoming increasingly concerned that, without substantial rate rises, high inflation would prove hard to shift.


    “Central banks are coming to terms with how hard it will be to bring inflation back to target and they are trying to convey that message to the markets,” said Ethan Harris, an economist at Bank of America.


    A big shift in market expectations came after policymakers, such as Federal Reserve chair Jay Powell and ECB executive board member Isabel Schnabel, delivered hawkish messages at the Kansas City Fed’s annual Jackson Hole conference in late August.


    https://www.ft.com/content/3d7bfcdd-512d-4d67-8daf-52308db94c37



  • Posts: 0 ✭✭✭ Reece Loose Shortchange


    With the goverment not able to borrow as much money, at least might reduce the council buying up homes and outbidding hardworking tax payers.



  • Registered Users Posts: 1,735 ✭✭✭pinksoir


    We went to view a gaff in Crumlin the other week. The previous owners had added a pretty nice extension and the garden was a nice size. I'd no intention to buy and mainly went to view it to see what the extension was like tbh.

    Here's the thing. It's a 2 bed mid terrace towards the dolphins barn end of Crumlin. Other gaffs in the area are listed at 299-350 depending on if they're end of terrace. Generally sell about their asking price + 20k. But they wouldn't have extensions and this place is pretty much turn key.

    This gaff was listed at 395. Just about acceptable because of the extension but even that's a stretch as the area is fairly grim. Bidding ends tonight (auctioneera - a dystopian eBay for houses) and current highest bid is 495k. For a 2 bed mid terrace in Crumlin.

    Insane, but there's clearly a few interested parties.

    EDIT: bidding finished and highest bid was 500k on the nose. That has to be near the most expensive a house in Crumlin has ever sold for. My god. A 2 bed mid terrace for half a million euro.

    Post edited by pinksoir on


  • Registered Users Posts: 129 ✭✭Balluba


    This house in Crumlin is certainly in turn key impeccable condition with a very impressive extension and a very large manicured private back garden. A lot of money was obviously spent upgrading it.



  • Registered Users Posts: 1,735 ✭✭✭pinksoir


    No doubt. Very nice extension and the garden is a nice size but definitely not manicured. It's a standard garden and many of the houses in the area have similar or bigger gardens. The extension is c. 30sqm based on other houses (house is 98sqm - other houses are 67sqm).

    Nevertheless, it's a 2 bed mid terrace in Crumlin/Dolphin's Barn. You can get bigger houses in decent suburbs for that kind of money. It's obviously ticking the boxes for enough people to enter into a bidding war, and turn key places still obviously command a premium in the market. But you can't help but think the vendors are pinching themselves. They've made a nice profit there



  • Registered Users Posts: 129 ✭✭Balluba


    I like the lovely unusual glass inner courtyard and basement storage.



  • Registered Users Posts: 3,689 ✭✭✭RichardAnd


    Do not touch Auctionera. I've seen dire properties on that site go for nearly 100k over the asking. It's nothing at all like ebay. Anyone could bid, and the "ending time" is always extended with each bid, which would not happen in a real auction. I would wager that many sales on that site fall through after the adrenaline wears off.



  • Posts: 0 ✭✭ Louie Faithful Noodle


    Peak insanity still, an apartment going for nearly 100k over asking price.

    I was out looking at the area today, while Ashtown is very nice the price for that property is lunacy.



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  • Registered Users Posts: 1,577 ✭✭✭Dante


    Every house I have viewed in North Dublin so far has gone sale agreed within a couple of weeks and at above asking price.



  • Registered Users Posts: 18,572 ✭✭✭✭Bass Reeves


    Any auction never ends until the last bid. Its noy fair to give an underbidder an opportunity to bid again. If an auction ends at a set time any bidder would be crazy to bid until the very last moment. Then it would be the last finger before the cutoff that won. All online auctions give the previous bidder a chance to rebid if a bid come's in at the end that is the way they work.

    The reason I dislike auctions for houses is the expense it add to bidders. You need to get you solicitor to preview the documents ( you could gamble on this year's ago when property was cheap but not now) and a structural report which is about 1-3k. As well BidX used to charge you 200 euro for the right to bid.

    So of you went to 10 auctions without buying you have 15-20k gone down the drain. It may we'll be why people are willing to go the bit extra when they are bidding as you are committed one way or the other. You cannot afford to be a tyre kicker it costs too much money.

    Slava Ukrainii



  • Registered Users Posts: 3,689 ✭✭✭RichardAnd


    Auctionera is not an auction. In a real auction, and on ebay, bids are binding. Anyone can "bid" on that site and drive up the price of a house.



  • Registered Users Posts: 341 ✭✭DFB-D


    I agree, they are a sham.

    They say they will deal with the top 3 bidders to close on order so it leaves room for a fake bidder to be top and try and close with the next bidder.

    I've bid on 2 properties with them and both went for crazy money and are back on the market now again for higher than the asking price.



  • Registered Users Posts: 5,202 ✭✭✭Padre_Pio


    Sham might be a strong word. I prefer gimmick.

    I do think it's a step in the right direction of transparent bidding processes, but it's handled very poorly.



  • Posts: 0 [Deleted User]


    Interesting, I viewed a house in Galway recently that used Auctionera, I had never heard of it before. The lowest bid you could put on the property was 1k below the asking price, thought that was strange myself.



  • Registered Users Posts: 8,239 ✭✭✭Pussyhands


    Over half expect a 75 basis-point increase at the ECB’s next policy meeting in October.

    The Irish economy is on life support really. Since March 2020 now there's been supports constantly pretty much. They're going to probably bring back the wage subsidy scheme in the budget next week.

    The laws of economics have not changed. You can't have your cake and eat it too. If the government think they can just spend their way out of this with supports, then it just pushes the problem down the line once that debt needs to be rolled over at higher rates.

    Inflation is now getting baked into the economy and that is as bad for the economy as a recession, if not worse.

    The US Fed are going to cause a recession to break this inflation cycle.



  • Registered Users Posts: 3,689 ✭✭✭RichardAnd


    Online bidding for houses is something that should be regulated. Otherwise, call it an auction and subject it to all of the rules that a normal auction would be subject to.



  • Registered Users Posts: 18,584 ✭✭✭✭kippy


    In fairness, you can remove both of those supports over a long term IF you have something in place to replace them. Without going near the ins and outs of problem tenants (of whom there are a hell of a lot less than many would think) paying private landlords to house social tenants isn't a good place to be or a good long term use of state monies. As stated however it would take an almightly turn around in housing policy to see those being removed.

    As for developers sitting on developments they have received planning on - to be fair construction and labour costs, while having lowered a bit of late are still incredibly high - I assume high enough that building at this time of massive uncertainty doesn't make fiscal sense to them.



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  • Registered Users Posts: 18,584 ✭✭✭✭kippy


    Agree with most of that, but in fairness there are not many first world economies that haven't been on "life support" the past 2+ years to some extent. Indeed one could argue it is these life supports that have contributed to why we are where we are.



This discussion has been closed.
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