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

[sfag]

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

quote: "Please clarify these taxes - contributions??"

The less obvious costs - which are ultimately government influenced - went up a lot in the housing bull market. Everyone got greedy especially the state and its agencies.

The examples I mentioned were ones I encountered when I self built 3 years ago. I was not prepared for the sheer cost of the hidden charges.
I mean the government gets a fair bit of tax thru the sale and purchase of land etc but after you buy your site the local government wades in for its pound of flesh.
If you buy a site with some telegraphs poles on it would you not be surprised at a 36 grand bill for something that any one else could do for much less. I got a gas leak on my site. Only Bord Gais were allowed to plug it - 10 minutes it took - 1000 euros please. I just got the feeling that anyone connected with the state was fueling the greed and milking the profits. Pretty damm irresponsible if you ask me.

 

[sfag]

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

Quote 1.
"First things first, what you have described in the above paragraph is the choices that were open to everyone not just young people and the other choice of course was to not buy at all and rent like they do in many european countries. "

Quote 2.
"Your list is long and aimed at making the point that the govt have been reaping the rewards of the boom and they did, but costs such as tax on goods and services is applicable to all industries so should they get some money back"

Response to 1.
Any reference to European countries is irrelevant. We are Irish and will never return to rent paying society. We aint gonna do it. Full stop.

Response to 2.
Cost related taxes on top of something that was rising by 30% per year is not alike any other charge and should be considered in isolation.

You'd think a simple percentage figure on everyting would be easy to understand but it doesent end there.
For example the state increased the vat on building by 1% during the boom - not being satisfied with 12.5% of 30% increasing annually.
They upped the site stamp duty (payable on every new house) from a 3 to 6% range to 9% on everything.
And these all happened during the boom.

Greed greed and Greed. How could you blame anyone in this society for sticking their arm in if they can get away with it when the State - which is supposed to have an element of social responsibility - leads by that example.

A pal of mine living in France reckoned house price inflation didnt happen there due to house purchase tax of 20%, but at our 6 - 9% on a much dearer house were paying more than their 20% of a cheaper house.

Incredibly as it may seem - I think the housing boom prooves that it doesent matter how much tax is extracted - as long as the banks extended the credit line we - the citizens have to pay in the end.

 

[MrMan]

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

Response to 1.
Any reference to European countries is irrelevant. We are Irish and will never return to rent paying society. We aint gonna do it. Full stop.

The refernece was to point out there is a choice, you say irish people wont rent, I say look on daft or the papers even ask a sample of 100 people and you will understand that renting is actually a viable option for many people.

Response to 2.
Cost related taxes on top of something that was rising by 30% per year is not alike any other charge and should be considered in isolation.

But do you not think that these taxes were needed to support our growing country. Regardless of how we think about the actual expenditure i would think that most people would agree that they are needed. If the govt were to start giving money back how do you think they would finance it? Should education, health infrastructure be cut back to hand out money to those who feel short changed by the housing boom?

A pal of mine living in France reckoned house price inflation didnt happen there due to house purchase tax of 20%, but at our 6 - 9% on a much dearer house were paying more than their 20% of a cheaper house.

Any reference to European countries is irrelevant.

 

[webtax]

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

Since the Government made 33% out of homeowners on the way up I'd say there is strong arguement for putting some of that 33% back to the homeowner if they fall in to trouble.

I wouldnt call it 'bailing out'.

Bailing out is exactly what it is - how will handing money back to people who were foolish enough to overpay for a house get us out of a recession? What taxes do you want to see raised and what services do you want cut to give you your 33% back?

You made you own decision and have no recourse except your vote in the next election, when you can decide what happens to the government who handed free rein to the building industry in return for a feed at the trough.

 

[MrMan]

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

when you can decide what happens to the government who handed free rein to the building industry in return for a feed at the trough.

do you really think kenny and co would have been able to take on the feel good factor of the economy that was the property boom. I really don't think any of the parties would have changed much of what is happening and any change won't be radical now either.

 

[webtax]

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

do you really think kenny and co would have been able to take on the feel good factor of the economy that was the property boom.

No, but it would make any future government think twice about the consequences of handing free rein to the building & banking industries.

 

[groom]

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

Response to 1.
Any reference to European countries is irrelevant. We are Irish and will never return to rent paying society. We aint gonna do it. Full stop.

I'm paying €1150pm for a lovely apartment.The lowest asking price for a similar apartment is €450k which would cost €2400pm to buy.

I'll be renting for a fair while yet

 

[shnaek]

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

I'm paying €1150pm for a lovely apartment.The lowest asking price for a similar apartment is €450k which would cost €2400pm to buy.

I'll be renting for a fair while yet

Chalk it down, groom. I am in the same boat. Friends thought I was mad to rent and said I could buy for the rent. But if I bought it would have been in the burbs in the middle of nowhere. As it is I live in the city centre and close to everything. I'd love to own, but I'm not in a rush. Location and price will have to be right.

 

[television]

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

I'm paying €1150pm for a lovely apartment.The lowest asking price for a similar apartment is €450k which would cost €2400pm to buy.

I'll be renting for a fair while yet

Where are you renting an appartment for that price?? I assume its one bedroom? A two bedroom apartment outside the city centre is not going to be worth 450k

 

[sfag]

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

Bailing out is exactly what it is - how will handing money back to people who were foolish enough to overpay for a house get us out of a recession? What taxes do you want to see raised and what services do you want cut to give you your 33% back?

You made you own decision and have no recourse except your vote in the next election, when you can decide what happens to the government who handed free rein to the building industry in return for a feed at the trough.

Dont you see the Government fueled and fed from the boom. You might say the state benefited for the good of all its people but if people they extracted from now get into trouble then let some of that 'goodness' flow back to them. They deserve it. I think it its a tough call to say people in trouble should sink. It is our government after all and is supposed to be benevelant if its anything. Its not as if were ruled by a foriegn government 'not of the people' any more.

As regard this 'choice' posters here seem to think existed. As rents followed houses prices up (and there is a correlation) what choices had renters. They had to pay thru the nose for the boom also.
In fact the aprtment pricing was often sold to prospective purchasers as not being much more of a monthly cost than the cost of renting.

It wasent a great choice. A real choice is cheap lodgings over expensive lodgings - and there aint any cheap lodging in this country.

Fustratingly moving to an underpopulated part of the country for cheap land or houses should have meant there was choice to do just that but once the boom started even the cow shed ruins in the back end of nowhere were carrying an inflated pricetag.
There was no escaping the house price inflation and no choice.

 

[Howitzer]

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

You might say the state benefited for the good of all its people but if people they extracted from now get into trouble then let some of that 'goodness' flow back to them. They deserve it.

From where? How many people should receive this money and how much? Multiply A by B and what number do you come up with?

 

[polaris]

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

er... no bail out to encourage further house purchases.
yes - to assistance aid home owners in financial trouble - mostly not of their own making.

This scheme is available for mortgage holders who are having difficulty in making their payments.

http://www.welfare.ie/foi/swa_rentmort.html#2

The Health Service Executive must be satisfied in all cases that:

* the amount of the mortgage interest payable by the claimant does not exceed such amount as the Health Service Executive considers reasonable to meet his or her residential and other needs.



Although it seems they will not be sympathetic to someone who took out an interest only jumbo mortgage to get a place they could never afford in the first place.

 

[groom]

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

Where are you renting an appartment for that price?? I assume its one bedroom? A two bedroom apartment outside the city centre is not going to be worth 450k

Definitely not worth 450k but thats the lowest asking price. Its a 2 bed.

 

[aircobra19]

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

Dont you see the Government fueled and fed from the boom. You might say the state benefited for the good of all its people but if people they extracted from now get into trouble then let some of that 'goodness' flow back to them. They deserve it. I think it its a tough call to say people in trouble should sink. It is our government after all and is supposed to be benevelant if its anything. Its not as if were ruled by a foriegn government 'not of the people' any more. .

benevolent? Have you seen the state of the health service?

As regard this 'choice' posters here seem to think existed. As rents followed houses prices up (and there is a correlation) what choices had renters. They had to pay thru the nose for the boom also.
In fact the aprtment pricing was often sold to prospective purchasers as not being much more of a monthly cost than the cost of renting.

It was never cheaper to buy somewhere than rent a room. You also have to consider the cost of maintaining a property, furnishing, cookers, fridges. The cost of credit, the interest on a mortgage over the term.

It wasent a great choice. A real choice is cheap lodgings over expensive lodgings - and there aint any cheap lodging in this country.

Fustratingly moving to an underpopulated part of the country for cheap land or houses should have meant there was choice to do just that but once the boom started even the cow shed ruins in the back end of nowhere were carrying an inflated pricetag.
There was no escaping the house price inflation and no choice.

Buy buy buy. Why why why?

 

[MrMan]

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

As regard this 'choice' posters here seem to think existed. As rents followed houses prices up (and there is a correlation) what choices had renters. They had to pay thru the nose for the boom also.
In fact the aprtment pricing was often sold to prospective purchasers as not being much more of a monthly cost than the cost of renting.

To rent you can deduct the following expenses that buying entails: transaction fees, furnishing, house insurance, life assurance, bin collection, maintenance fees, replacement of goods. On top of expenses renters have more freedom of movement. Buying provides security and a sense of home but it definitely isn't cheaper in the short/medium term, so there definitely always was and still is a choice.

 

[rabbit]

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

Buying provides security and a sense of home but it definitely isn't cheaper in the short/medium term

disagree with you there. Lets say medium term is over 7 to ten years. Take any 7 to 10 year period in history + house prices have risen. If you rented for 10 years what do you have at the end of that ?

 

[aircobra19]

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

No negative equity.

 

[MrMan]

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

I'm not trying to talk myself out of a job but if someone was to invest the difference in the cost of mortgage versus cost of rent for comparable property over 10 years they might be in a healthy position and they wouldn't be subjected to the possible rises or falls in prices. What I'm trying to highlight is that renting is a viable choice for people.

 

[Howitzer]

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

disagree with you there. Lets say medium term is over 7 to ten years.

Unless you're Methuselah I don't think 10 years is medium term in terms of where someone lives. I'm in my 30's and have yet to live in any one location for more than 4 years during my student/working life.

Take any 7 to 10 year period in history + house prices have risen.

This is incorrect and is borne out by even our own CSO stats which only go back about 40 years - no need to even bring up the ongoing 20 year downcycle in Japan, 10 year down cycle in Germany ...

 

[z109]

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

Where are you renting an appartment for that price?? I assume its one bedroom? A two bedroom apartment outside the city centre is not going to be worth 450k

Oh, has this become a Dublin only site?