Softening house market?

They either negotiate reduced rents or move to somewhere they can afford.

Explain to me how you think that subsidising the market decreases the number of people renting? There is a finite pool or property for rent. There are a certain number of people competing for properties.

I'll give you a simplisitic example below with three scenarios. I make it simplistic because there appears to be difficultly on here with basic concepts.

(1)

There are 3 identical properties to rent in an area. 5 people really want to rent there. The maximum amounts that they can pay or are willing to pay in rent are as follows:

Person A: 100

Person B: 90

Person C: 80

Person D: 70

Person E: 60

Under this scenario, the rent will be 80 Euro. A/B/C will get the houses and D/E won't.

(2)

Now a second scenario with the same people and same houses where the government subsidises every who rents to the tune of 50 quid. Now the amounts people who are willing/able to pay are:

A: 150

B: 140:

C: 130

D: 120

E: 110

Result!! Now E can afford to pay more than A used to be able to pay............ But wait, there are still only 3 houses and now the price is set by C at 130. A/B/C will still get the houses and D/E won't. It hasn't changed their financial situations, but it has made the landlords very happy.

(3)

Let's take one final scenario. The government decides to give 50 quid rent subsidy to all low paid workers (C+D+E). The amount that the people can now pay or are willing to pay to live in that area is

A: 100

B: 90

C: 130

D: 120

E: 110.

Woo-hoo. Problem solved according to awec. Now D&E are able to rent a house along with C. We can all go home. Wait, what about A&B you say? That they now can't rent there? Ah don't mind them. The problem is solved. A can go and just pay his 100 to live in a less desirable area. Plus the price in this area is now 110 so the landlord still gets a nice bump too.

I have been a long time lurker on this thread and finally registered because scenario 3 in your post is my big yes moment.

Long time renter here with no assistance from government and yes to everything you said, I cannot afford the level of rent landlords expect because those with assistance can afford more hence living in a very low standard apartment in a less desirable area despite a higher than average salary.

That is all rubbish. From 2016-2022 there was no increase in HAP rates yet rents skyrocketed. RPZ's should have caped rents to modest increases however during one of the largest increases in rental income from houses LL's ran out the door.

The biggest factor in house and rental prices is SUPPLY. Last time I rented my houses I did not have to advertise. Most houses now are rented by word of mouth. One of the biggest factors in rent increases is RPZ rules. The compounding factor in 1-2% rent increases yearly rather than only increasing when a tenancy ends is a huge factor in higher rents

The quite simple factor with HAP is that without it LL would not take those tenant's that could not afford the rental rates. These LL's would either sell up or leave houses vacant. Move into the house for 30 days a year avoids the vacancy tax.

It's exactly the same with HTB. Without it builders would probably concentrate on the mover upper market more than the FTB. It's questionable whether removing it would see a price drop equivalent to the value of the HTB. It would also prevent a cohort from managing to put a deposit together.

You are posting theoretical rubbish. It the equivalent of ''if my aunt had balls she be my uncle''. Essentially the government is giving an edge to FTB over investors and mover uppers. If the subsidity was not there would house prices drop by 20-30k or would builders target other markets.

One thing for sure the REITs would not be crying if it went.

So in all 3 examples 3 people are housed today and 2 are not. Option 2 & 3 are inflationary and do nothing to provide extra rented homes tonight.

Might option 2 & 3 serve a public good if it leads someone to build and rent an extra property (or 2) if they thought they could get a higher level of rent

Can we split off this off HAP issue and get back to discussing whether the market is softening or not

Looks to be slowing in Galway City for sure. 100+ property's on daft.ie compared to this time last year but decent sized houses are still selling and especially houses in good condition , seen asking prices drop in the last 2/3 months for do-uppers. What'S happening in the apartment sector here I have not been following at all.

With the new levy on concrete and bricks etc, I'd think that anything that would need work would 'soften' even more, and may help turn key houses hold value?

I see myself that houses that need work in are a shock when I get a quote on anything that needs to be done-windows. doors, electrical work... the whole shebang really.

The discussion was not about HAP although one or two posters zoomed in on only it. It was about whether the government would intervene again to keep prices high.

It has intervened by giving tax credits to all renters in the recent budget. That is, in all practicality, a subvention to landlords.

If prices decreased, and, say hypothetically the government decided that landlords could now pay zero tax on rental income, then that would be an example of something which would inflate the prices again. So government interference is indeed relevant to the market. If you want to look across the water for an example of an indirect effect, due to the UK governments ridiculous fiscal plans, consensus forecasts for 2-year fixed rates for next Summer have jumped up to 6.5%! Their central bank might have to decimate their property market in order to try to counter their proposed fiscal measures.

It does depend on the circumstances of the buyer - but yes, in general rising costs of living and interest rates don't make it easier to buy.

One would suggest that these will remove potential buyers from the market - and if you are someone that isn't impacted by rising rates/increased costs of living then you will benefit.

They are fixed rate products that will be replaced you would imagine, but again proof that the circumstances that cause prices to fall will remove a lot o buyers who are convinced they might be in a position to pick up a bargain.

The huge number of switchers could be delaying all other applicants.