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

From the government that sold multiple apartments beside Tallaght hospital for a little over 100k per apartment in 2018

When all the grants available for developers/purchasers are added, up to 250k per unit is funded by taxpayer interventions

An analysis by the Business Post of the average subsidies that have been awarded under each policy intervention has shown buyers of apartments under the Croí Cónaithe scheme will be able to receive close to €250,000 of taxpayers’ funds to buy a unit.

The state/local authorities/housing associations were given first refusal. The local authority took 64 of the 500 on a long term lease plus deal.

These apartments could also have been used as affordable rentals for Health care/teachers/Gardai staff untill they have moved up the salary scale given that they are adjacent to Tallaght hospital and on the luas line. Such a move would be profitable for the state as well as easing public sector wage pressures and a significant dividend for society

FFG will do nothing unless there cronies are benefiting from it. There is absolutely no consideration as to what is in the best interests of the country.

If they were under state control and the State passed up the opportunity to buy them. FG effectively sold them

"On this occasion, before their sale, Nama offered all 500 apartments in this complex to the Housing Agency and the local authorities and when these parties indicated that they wished to proceed with 65 of these units, Nama was happy to facilitate this," the spokesman said.

Don't worry about it. They'll run another few billion through the magic-money press and hand it out. That'll fix it!

On the tech stocks. They’re up 40% over the last year. 20% in the last 3 months. They’ve come back down about 5% or so. It’s hardly representative of major threat to their viability/profitability…

House prices are up about 30% in 5 years. 5.5% p.a. compound
Certainly don’t think this is sustainable in the long term, no.
3% in line with wage inflation is probably the best prediction. So another 15% or slightly higher by 2034 would be the most reasonable guess.

‘…Meaning there is some peak at the moment that won’t be surpassed by much in the next decade at least’

The chances that house prices won’t be significantly higher than they are today in 10 years are vanshingly small. It’s almost a certainty. Can’t fight inflation.

No reason other than government policy that ireland is amongst the poorest performers. We should be up there with Denmark, Norway and Finland

Italy and many of the other countries that "beat" Ireland in this list have other issues such as massive youth unemployment that would make things harder for "young" people. I actually personally know numerous Italians in their late 30s who live with their parents, have no steady job and are essentially stuck in life.

Ireland essentially has full employment, yet we're still high on the list.

That’s quite a remarkable misrepresentation of the facts. The second hand market is always going to be much bigger than the new market for obvious reasons so the above is a very silly comparison to draw.

Reality - “FTB mortgages on new properties increased by 19.2% to 2,404 and in fact accounted for over 83% of home mortgage drawdowns on new properties”

That’s just you wanting to force your pre-held view onto the data when it is showing literally the exact opposite of what you expected.

83% of the new houses for sale to open market were bought by FTBs. You are concluding this as evidence that FTBs can’t afford new houses…remarkable.

In terms of why more aren’t on the open market. Tonnes of reasons:

• Government being forced to acquire en masse due to pressure from left wing parties to address social housing stock
• Approved housing bodies per above
• Build to rent are more profitable than to sell for apartments. We also have an extremely large rental deficit so this is much needed.
• Investors wanting to capitalise on some of the lowest prices relative to rental yields in developed world.

You’re saying that the actual reason is FTBers just can’t afford them so ‘someone else’ is picking up them in absence of ‘real demand’.

This is clearly utter nonsense and if you don’t take my word for it, I suggest you go to some viewings of new build launches in Dublin. You won’t find any tumbleweeds…

You’ve taken this much broader. The initial point was that FTBers can’t afford new houses. The data doesn’t support this in anyway. The data may support that not enough houses are making it to open market.

For homes that do, FTB are hoovering them up at an unbelievably high percentage. 83% is a shockingly high number.

In terms of the wider actions of the government you’ve raised in last few posts around rent controls, prolific purchasing of homes by councils and AHBs, HAP etc etc.

I am massively against the vast majority. I’d have relatively strong right wing economic views on this (eg if dual income couples are being forced out of Dublin, then no pure social housing should be provided there)

These views just aren’t popular in one of the most left wing countries in the world. The main opposition party until now wants total rent freezes and to further ramp up social and affordable housing delivery (at the expense of open market). The current government are just reacting to this by staying very slightly to the right of all the very left wing alternatives (I.e. still fairly left wing).

It’s frustrating but ultimately as a democracy the electorate can only look at themselves if we don’t like heavy left wing government interference in housing. It seems to be what we want more of.

Housing bodies are bulk buyers and developers want to sell units as quickly as possible.

As for not sharing information, it is because social housing has a reputation (covered enough in the past; I don't want a threadban) that often causes private buyers to pull out.

I think there has been plenty of evidence that most people using the HTB didn’t necessarily ‘need it’.
It’s a refund of their own tax contributions to give them a relative edge in bidding against SSBs and investors and also a bit of a bone to builders to encourage more supply.

The absolute numbers and proportion of new builds going to FTBs has been increasing year on year despite the value of the subsidy provided being eroded by inflation over time. The subsidy is pretty much redundant in Dublin now because of the price cap yet still you’ll find queues at most new build launches.

There was a debate some weeks ago, about EA's deliberately underquoting the asking price of property to drive bidding wars.

Some would have you believe that the EA do this because one cannot reasonably expect a professional Estate Agent to value a property with certainty (but will charge you a fee when the bank wants it in writing before issuing a mortgage)

But most reasonable intelligent people know that the EA do this deliberately to drive up the price.

Exhibit A:

EA's going against their code of practice, for a quick buck?

Estate Agents would never do such a thing!! ;)

The reason for this appears to be uncovered

Did you bother reading the article before linking it. Yes the CSO have drilled down and estimated about 73k informal tenancies. About 65% are rented at sub 30% below normal rent levels. Most are in rural Ireland

Some are where employers provide accommodation to employees. Some are described as guardianship tenancies where a person is renting to person related to them.

Basically nothing to see here

Exactly the type of landlord I would be looking for, I'd prefer cheaper rent than a tax credit. I suspect most rentals in Limerick were 30% under new rental levels prior to the eviction ban. Since then the exodus of landlords has been like a tsunami and new rentals are like hens teeth

Never ever under estimate the ability of FFG to fcuk things up. It astounds me that a State completely incapable of managing it's own rentals would tax those people that can to the tune of 50%+.

Yet we continue to vote for these fools and I'm surrounded by blue shirts. Where is the problem here? The people or the gangsters we vote for

The main opposition party manifesto is to increase marginal rates on income over €100k (i.e. what most landlords will pay) to almost 60% so maybe that’s why?

How do you think landlord rental income being taxed at lower rate than a nurses overtime would play in this country?

Giving out about the rate of tax in this country and using it as a reason to vote for opposition in the same post…

SF, PBP, Labour, Social Democrats…lol

RPZ legislation perfectly encapsulates where Irish policy has gone.

Left wing opposition screaming for an outright ban on any increases in rent at all.

Government realises this is lunacy but conscious of public perception of landlords, along with knowing there is no alternative ‘right wing’ party in Ireland move sharply to the left and deliver a slightly softer version where increases are capped at 2% but not banned

Prices continue to rise. Left wing parties continue to scream for outright caps on rent increases. Government responds again with slightly tighter policy (capped at inflation or 2%, whichever is lower)

I can almost guarantee nobody in FG believes in RPZs but they have tactically taken up that position as they know anybody who doesn’t agree with them has to vote for them anyway as all opposition parties want a more extreme version of what we already have.

I’m extremely pro-lowering taxes on all middle to high income earners. Therefore I will continue to vote for current government.

As, scarily, despite having the most progressive tax system in the world, every single opposition party openly wants to increase income taxes on mid to high incomes further.

There is no doubt FG in particular would love to reduce the 52% marginal income tax but they would get utterly annihilated for doing so. We get what we deserve as a voter base.

The political spectrum is split between hard left (SF, PBP, SD, Labour), centre left (FF, FG) and anti immigration (i would say right wing but don’t think these people have any economic policies and if they did, I expect they would be left wing given their support base).

Centre left (what we have) is the best of a very bad bunch.

I am in no way in agreement with DataDude right leaning housing beliefs or majority of their beliefs to be honest as they come across as very elitist in my opinion. However they are correct that "At present, Ireland's top marginal rate of tax is 52 per cent for employees and 55 per cent for self-employed."

https://www.oireachtas.ie/en/debates/question/2024-02-01/220/#:~:text=Minister%20for%20Finance,-Share&text=At%20present%2C%20Ireland's%20top%20marginal,the%20top%20marginal%20tax%20rates.

Wrong.

48% on income over €42,000 (single person€ and 52% on income over €70,044. Actually 55% for self employed over €100k

You’re forgetting PRSI and USC

I’m extremely pro-lowering taxes on all middle to high income earners. Therefore I will continue to vote for current government

Would you correlate high personal taxes with extremely poor housing policy. We've had multiple examples of where 2 to 3 housing units could be provided for what the state is paying for 1. Additionally housing was sold for half the price of what the state is paying in subsidies for new supply

We are at our peak in terms of numbers at work and salaries for those people. Housing should be able wash it's own face and be a net contributer to the state in such circumstances. Instead the department of housing is going through 8 billion per year (circa 25% of 2023 paye receipts) .

I'm not so sold as you on FG being centre left. The indigenous wealth of the country is in land and property and contributes little or no tax, with all policies pumping the value to unsustainable levels. There a top 5% party with housing policies akin to a wolf disguised as a sheep.

Rpzs might have worked had they a corresponding tax break to compensate LL's for increased costs/inflation and a plan to balance supply/demand dynamics. FFG policies were abysmal in this aspect

I'm only familiar with the city and surrounds. They've been Rpz for much longer and many landlords were caught with below market rents, given the recession effects were far more traumatic than the rest of the country