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

Not only that but commercial rents would be far higher than domestic rents, so the decision to convert to residential would in itself significantly reduce the book value of the building. At least this is the case in the US, would imagine our cities would be similar

Far better in my opinion to convert the older buildings in the city centre to residential as in many cases this is what they originally were

Probably a lot to do with the economy of the 80's, many young men and women were leaving

They came in 2014 or 15 and yes of course linked to the lessons learned from the previous crisis. But can’t have it both ways

• When strict lending rules are introduced, it’s separate from government. Nothing to do with them

• When they are loosened - lending rules are set by the government.

The governments motives are fairly clear. Get as many people owning homes as possible as homeowners typically vote for them. I strongly disagree with many of their schemes (in particular shared equity). The HTB has its drawbacks but overall is a sensible force for good in my opinion. The idea that they are just trying to inflate house prices for the sake of it is preposterous and is clearly costing them votes and likely their jobs.

eg. Just today. Leo clearly balancing the desire to get people homes and out of rent traps while remaining conscious of not having unintended inflationary impacts on prices. https://www.irishtimes.com/ireland/housing-planning/2023/06/20/taoiseach-disinclined-to-extend-help-to-buy-scheme-to-second-hand-homes/

I’m specifically talking about married women and the fact that most were not in the workplace in the early/mid 80’s and this was one of the reasons why it was possible to buy on one salary.

Again, why would the all powerful, house prices crazed government allow a decade (and still the case) of very stringent lending rules by international standards?

Secondly, ‘quangos’ is typically reserved for people who are suckling on the teet of government and are on some sort of golden ticket which they are terrified to lose.

The vast majority of senior Central Bankers are incredible professionals earning pennies on the euro purely to gain some experience before they move onto massive roles in the private sector a few years later, often abroad.

Many will go on to international private sector banks or insurers earning more in a month than any politician does in a year. It’s a serious stretch to think they would compromise their professionalism just to hold onto their fairly crappy paying jobs.

The issue with central bank prior to ‘08 was that they were not questioning the risks within the banking sector and were relying on whatever returns were made by the banks and taking it on face value. (I.e. asleep at the wheel)

That has all changed to the point where they are now one of the hardest regulators to deal with as they question everything. They definitely ask more questions than other European regulators when it comes to banks.

The other point to note is that they issued a discussion paper on LTI and the message that was received loud and clear from the public was that FTB’s were being locked out of buying because of LTI rules despite demonstrating that they had the ability to repay by paying rent that was much higher than mortgage repayments. This wasn’t a case of the government telling them what to do.

So just to be clear, you're completely ignoring the well documented history of the CBI being influenced by the Irish government within recent years that I mentioned in my post?

Because its not remotely a conspiracy theory, much like in our previous discussion you really should educate yourself on economics before making such absolutist statements. The Wikipedia article (of all things) on the CBI has a good introduction to the issue for you with plenty of sources:

[quote]In 2016, several Irish bank CEOs testified to being asked by senior officials of the Central Bank during 2007–2011 to follow a "green jersey agenda" in obfuscating the facts of Ireland's deteriorating banking system.[57][58][59][60] After the 2011–bailout by the EU–ECB–IMF (e.g. the European troika) of the Irish banking system, a number of non–Irish senior executives were placed in the Central Bank of Ireland, including the Board of the Bank. However, by 2017, almost all these non–Irish executives had departed the Central Bank, and some have publicised concerns about the Central Bank's tendency to push aside risk-management in pursuit of political and Government objectives.[/quote]

The Irish state was forced to implement relatively low LTI ratios after the crash, it wasn't something either of FF or FG willingly wanted to do. They were, as Villa05 linked, lobbying to increase them as soon as feasibly possible in the years afterwards. If given another 5 years in power you can bet they'll be increased again to prop up house prices.

Realitykeeper has been reminded that they were threadbanned many months ago.

Thats the one! Nearly spat my coffee out.

Same happened on a newish build in South Dublin. €150k over identical house sold February 2023.

bit then other stuff isn’t as crazy.

Couple of points

Banks and finance houses are always one step ahead of regulators. The regulators are fighting the last war, while the banks have moved to a new battlefield.

Central banks have been predominantly the cause of the current issues with zero/negative rates for far too long topped up with unprecedented money printing. Who's regulating the regulator. Is it a coincidence that the heads of central banks are drawn from the large finance houses? Have we put the foxes in charge of the hen house?

As for discussion papers, what outcome did one expect from renters trapped paying extortionate rents.

The central banks job is to weigh up the risk of raising mortgage multiples against the back drop of increasing rates. Discussion papers look like a mechanism to absolve accountability and shift the blame to the victims if it all goes wrong, ala, Enda Kenny "we all went mad" at Davos when speaking to the great and the good, many of whom were responsible for or profited from the GFC.

No one is arguing that house are more unaffordable today….All I was pointing out is that you need to look at the context of why 1 salary was used to buy a house in the 80’s (I.e. most households only had one salary coming in and it wasn’t an option in a lot of cases to have two because married women were not in the workforce)

as for land I have expressed my views on here many times and think that when land gets rezoned any gain should be taxed at 80% and it should be accompanied by a use of or loose it approach whereby if the land isn’t used it gets rezoned back to farm land and it looses its value from it being development land.

Why should someone benefit from land being rezoned. 80% tax still compensates the farmer as a million gain on re zoning would still equate to 200k. The tax should be then used to provide infrastructure to the site and surrounding area.

Plus in a lot of cases the farmer has already sold to a developer who is just sitting on it and included in its land bank

Land values in Ireland are 20% of property prices in Ireland.

over in reddit there are people getting quited 4-5k per sqm build costs for one-off newbuild in Dublin. That’s the real price driver.

building the house will be 500k + vat and council charges.

final house 850k-900k and “land value” is 35%.

and that is a desirable super central area. Go anywhere else in ireland and land value is tiny.