Why (the state) bailing out housing market is a bad idea..mcwilliams indo article

Re: Why bailing out housing market is a very bad idea

They were all bitten by the same desire for a quick buck without considering the longer term implications to their business - greed and stupidity!

Greed did fuel a lot of it and I would say that there are Ea's and developers who would say now that the 15 year boom has worked well for them. I would think a lot of people thought make hay while the sun shines and its hard to argue with that. The banks on the other hand had more reason to look long term.
 
Re: Why bailing out housing market is a very bad idea

[broken link removed]

This but might interest television



EDIT: Link fixed

Wow! That is scary stuff. The good professor says that house prices are set to halve and that we could see a banking crisis this autumn. Is he over egging it a bit or is it really that bad?
 
Re: Why bailing out housing market is a very bad idea

Plenty of jobs are specific to one location - pharmaceuticals to cork, ifsc to dublin etc. and people develop specialised skills in these areas which can mean they are unable to find employment in other parts of the country. Renting is not much cheaper than a mortgage (and a long way from being affordable) and is too insecure for most families with young children. So ftb's should all walk backwards to mullingar and have a two hours commute to their work/family/friends - some choice!

And since you think that young people have only themselves to blame take a look at the title of the thread again - proposals for the government to bail out the banks & property developers by stitching up ftb's again.

Your talking a small proportion and surely your choices are made with future employment in mind i.e should I train in an area that only offers employment in one place in the country or am I maximsing my risk to unemployment, high costs etc by doing so.

I don't recall saying young people have themselves to blame for anything its that they and everyone else have choices to make and have to work around their means, plus i have said all along that there should be no bailing out of anyone.
 
Re: Why bailing out housing market is a very bad idea

You might want to check up on Japan a bit more - it's housing boom went hand in hand with it's economic boom, same as in Ireland.
Interest rates are an ineffective tool for controlling house prices - look at the uk. Raising them to control house prices damages other areas of the economy, such as manufacturing by raising their costs & pushing of the price of sterling in countries they try to export to.
My argument is that the govt should have taken steps to limit borrowing to prudent levels of 3xearnings & 90% mortgage over 20/25 years max which would have controlled prices without harming the economy.

Control over interest rates is not an ineffective tool for managing the broader economy, and also house prices as part of an overheating economy. Policy makers generally are agreed that it is the most powerful tool IF used appropriately. The level to which they should be set is not an exact science. However, it is quite obvious that interest rates SHOULD have been higher in Ireland BOTH in the interests of the housing market and the broader economy.

I think we are probably arguing the same point to a large extent.
My point is that if we had control over our interest rates we would have been able to cool the market (and the economy generally) by lowering inflation. This would have promoted more sustainable growth (for house prices and the economy generally) by keeping prices and costs for business down.

In the absence of this control over interest rates, the government SHOULD have used other areas to cool the market: As you say, Eg. limiting borrowing to prudent levels.
 
Re: Why bailing out housing market is a very bad idea

Your talking a small proportion and surely your choices are made with future employment in mind i.e should I train in an area that only offers employment in one place in the country or am I maximsing my risk to unemployment, high costs etc by doing so.

I don't recall saying young people have themselves to blame for anything its that they and everyone else have choices to make and have to work around their means, plus i have said all along that there should be no bailing out of anyone.

It's not a small proportion given that it applies to tens of thousands of workers in all the big cities in Ireland. And people should not have to base their career choices around overpriced housing - hardly the basis for a competitive economy.

I wasn't trying to suggest that you were in favour of a bail out, I was just making the point that many of the VI's are and who would suffer the consequences if they succeed.
 
Re: Why bailing out housing market is a very bad idea

Wow! That is scary stuff. The good professor says that house prices are set to halve and that we could see a banking crisis this autumn. Is he over egging it a bit or is it really that bad?

no he's just another doom and gloom merchant. Remember ireland is different and the fundamentals are sound. Vote FF!
 
Re: Why bailing out housing market is a very bad idea

Jetro, article is pretty good I have to say. Particularly gloomy but there is nothing I disagree with it in it, except for population. Maybe its a hunch but I get the feeling population will increase pretty dramatically in dublin over the next 20 years.
 
Re: Why bailing out housing market is a very bad idea

My argument is that the govt should have taken steps to limit borrowing to prudent levels of 3xearnings & 90% mortgage over 20/25 years max which would have controlled prices without harming the economy.

How would that not have harmed the economy? Do you think they should introduce fixed limits for credit cards as well or maximum amounts for personal loans? It is up to the banks to be responsible lenders. If they haven't been, they will pay the price.
 
Re: Why bailing out housing market is a very bad idea

Jetro, article is pretty good I have to say. Particularly gloomy but there is nothing I disagree with it in it, except for population. Maybe its a hunch but I get the feeling population will increase pretty dramatically in dublin over the next 20 years.
Here are the [broken link removed] that he referes to. Note the dramatic peak in 1980 (74K) and subsequest collapse by 1994 (48K). This peak is often incorrectly referred to in support of boom times becoming boomier, failing to note the consquences of the subsequent collapse in births. Morgan Kellys article finally addresses that issue in print.

Hunches are rarely a substitute for proper research on such things.
 
Re: Why bailing out housing market is a very bad idea

How would that not have harmed the economy?
I don't understand your question - How would [prudent levels of lending] not have harmed the economy?
It is up to the banks to be responsible lenders.
And you trust the irish banks to be responsible lenders? Have you forgotten the dirt & overcharging scandals and the fact that while the banks were wheeling out their economists to promote ever higher house prices (& mortgages) they were busy selling off their own branches & headquarters.
 
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Re: Why bailing out housing market is a very bad idea

Hunches are rarely a substitute for proper research on such things.

Fully aggree with you. But why do I feel like the population of dublin is going to explode over the next 20 years. Someone got to helpme back that feeling up with some facts. Now I am specifically talkign about dublin here. Applying irish population trends to the greater dublin area may not give a good forcast of the population of dublin in 20 years
 
Re: Why bailing out housing market is a very bad idea

Please Close this Thread or create separate Forum to discuss Houses - Too much of similar type thread proliferating AAM in last 12 months -Its becoming a Bore
 
Re: Why bailing out housing market is a very bad idea

If you're bored then simply don't read it. Since housing is the biggest financial decision people make in their lifetimes why shouldn't it be discussed on an askaboutmoney website?
 
Re: Why bailing out housing market is a very bad idea

If you're bored then simply don't read it. Since housing is the biggest financial decision people make in their lifetimes why shouldn't it be discussed on an askaboutmoney website?

Hard to argue with a person with a user name like WEBTAX:D
 
Re: Why bailing out housing market is a very bad idea

Greed did fuel a lot of it and I would say that there are Ea's and developers who would say now that the 15 year boom has worked well for them. I would think a lot of people thought make hay while the sun shines and its hard to argue with that. The banks on the other hand had more reason to look long term.

Agreed.

People are always going on about the evil "Greed" that people had. While I have little time for the country solicitors, EAs and builders of this county, you can hardly blame them for making hay. Characterizing others as "greedy" is the language of the downtrodden, - as if they are morally obliged to provide their services for the good of man kind.
That's life and human nature I'm, afraid.

Greed is the basis of the capitalist model on which the western world is built on. ie. Harnessing greed and the in built human nature to consume and get fat and rich. This is why the capitalist thrives (despite its faults).

The government (especially) are supposed to moderate for the common good, and try to help out in "lifting all boats".
They failed miserably.
 
Re: Why bailing out housing market is a very bad idea

If you're bored then simply don't read it. Since housing is the biggest financial decision people make in their lifetimes why shouldn't it be discussed on an askaboutmoney website?

I agree, plenty of other threads for you to read. You don't need to look beyond the subject if you don't want to.
 
Re: Why bailing out housing market is a very bad idea

If you're bored then simply don't read it. Since housing is the biggest financial decision people make in their lifetimes why shouldn't it be discussed on an askaboutmoney website?


I think some of us read it because we think it relates to the thread title ..how silly! This is the second thread that has developed into an general housing market discussion, with the same contributors arguing back and forth, with the same type of posts,
 
Re: Why bailing out housing market is a very bad idea

I think some of us read it because we think it relates to the thread title ..how silly! This is the second thread that has developed into an general housing market discussion, with the same contributors arguing back and forth, with the same type of posts,

Why is it such an issue. Get a mod to change the thread title and let the posters who wish to contribute do so.
Yes some of what is said is repetitive but this is a discussion forum if you cannot discuss things it becomes some what pointless
 
Re: Why bailing out housing market is a very bad idea

Why is it such an issue. Get a mod to change the thread title and let the posters who wish to contribute do so.
Yes some of what is said is repetitive but this is a discussion forum if you cannot discuss things it becomes some what pointless

I think a separate forum for Housing Marketing should be set up in AAM, just like Tax , Legal etc, how about housing that way we could dump all the EA's and property classes and let them argue over and back in a separate forum
 
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