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

HAP, longterm leasing, purchasing existing homes without any supply side measures is an inflation recipe which further exacerbates the problem

Rent allowance and HAP were initially meant to be temporary measures until the state got its housing stock in order.

Notable that you left out taxpayers in the list of vested interests who are both paying for it and in many cases suffering from the policies they are funding

How many tax payers do you know who aren’t in the groups I listed?

Leaving them out shows a blindness to the stupidity of it all, not dissimilar to the 08 crash

HAP rates set the floor on rents - if local authorities were to drastically lower the HAP levels, most landlords would not find other tenants to rent these places. The proportion of the market receiving some kind of rent support is absolutely huge.

Anyone telling you that GNI matters will not be advocating for more spending!

It's people using false Debt to GDP ratios that advocate more borrowing

Debt to GNI* shows the reality of our indebtedness

There are close to 60,000 HAP households in Ireland at last census, I have no doubt that now its much larger, and thats before you look at RAS or rent supplement. There is no way that landlords would find 60k private tenants to step in and pay full market rents if HAP thresholds were lowered.

It's a moot point anyways because it won't happen - it would be political suicide to cut HAP rates even though it would lower overall rent floor and probably rents market-wide to some extent.

disagree, people have been 'keeping their powder dry' for the last 5 years, i know plenty of them, prices in a lot of areas have risen 40-50% in that time, and they have been paying expensive rents the whole time as well.

They will need some correction to have made that worth while.

And how are people over borrowing with the CB rules in place?

Timing the market is for keyboard warrior singletons, most people have a life to get on with, a family to give a place to call home etc, you can try be too smart (see first paragraph above)

what you’ve written occurred in a once in a lifetime low interest rate, money printing environment and highly manipulated market where the govt held the doors open to reits and investment vehicles and threw money at first time buyers and renters.

Expand your horizon for a second and think what might happen if the opposite occurred, because it’s just starting.

There is a touch of selective amnesia around here lately. It was stated policy to discourage private citizens from from becoming LL's and encourage so called professional LL after the 08 crash.

The citizen landlord class was one of the few areas where market forces were allowed to play out as normal with rents collapsing and the overindebted becoming forced sellers after 08

Citizen landlords paying tax at marginal rate while funds were contributing close to 0 to the Irish tax system while being huge beneficaries of gov spending.

Local LL's paying a higher cost of capital while funds able to access close to 0 cost capital.

RPZ implemented in a way that trapped small landlords while funds were facilitated in workarounds. Selling up was the only escape for small LL's thereby helping funds monopolise high demand markets further increasing price.

The 08 crash was caused by the financial sector, they were bailed out by taxpayers and assisted by the system in fleecing said taxpayers and creating huge asset price bubbles not only in housing but almost every asset class you can mention

A quote from the last crash was the only thing worse than the banks failing was the banks surviving. Its now reap what we sow time

Thats because they don't and is a point that keeps getting glossed over in regards to interest rate rises and house prices here in the near term.

A lot of countries have macroprudential tools in place that relate typically to capital requirements for lenders and controls on Loan to Valuation ratios (LVRs). But Ireland is a bit of an outlier in that as well as the typical controls in place, we also have strict controls on Loan to Incomes (LTIs) ratios of 3.5x - 4.5x which has been very effective in controlling prices here.

Countries such as NZ & Australia were noted as having a significant proportion of borrowers in recent times having LTIs (sometimes referred to Debt to Income or DTI in other countries) of over 6x and in some cases as high as 9x. As a result house prices in these markets are going to be exteremly more sensistive to IR rises in the short to medium than the Irish market.

Obviously rising IRs still correspond with lower asset prices.

I believe they boomed from Chinese spending so we're sheltered somewhat from the financial crisis

When was it policy to discourage private citizens from becoming landlords…could you please share link as It’s my understanding that the big reason private citizens weren’t becoming landlords was because they could no longer get 100% mortgages and instead needed a 30-40% deposit. That and the fact that banks charged higher rates for BTL mortgages because of the increased risk meant that there was a big drop in numbers of private citizens becoming landlords. These are macro prudential rules and not government policy.

It may have been imf imposed but there definitely was a policy of discouraging citizens from becoming landlords.

Interesting approach. That would please the banks more than anyone

Increasing house prices brings an illusion of increased wealth. Theres enough new hybrid cars out there. All is well until it isn’t.

Additional Debt

it means you cant sell unless you have a large amount of cash to clear the balance of mortgage post-sale

it absolutely is a big deal