In years 2007 to 2013 there was no shortage of supply, quite the opposite. How come prices plummeted 54% otherwise. I think that is covered in economics basics, page 1, you'll find.
Rents also dropped in price when these measures taxation measures were brought in this time frame.
I recall the Blind persons allowance was cut around then. The amount saved was even smaller. I hope it too wasn't driven by ideology??
Investment fell through the floor not based on 0.18% charge per 1000 euro LPT charge.
It fell because of severe financial distress which removed hyper capital appreciation of houses from investors , who were previously looked after by the toxic combination of politicans, gombeen men and financial conmen.
Investors simply looked elsewhere for capital appreciation, and returned with the assistance, once again , with assistance from the State, much to the detriment of "citizens".
High property prices are bad for the economy. They cause wage inflation, they cause insurance inflation, they reduce labour mobility, they cause a transfer of wealth from the young to the old (even though the old hold most of the wealth anyway) and they funnel capital into a non-wealth generating sector (construction) from real wealth generating sectors (internationally traded goods and services).
It is in that context that the government can and should do whatever it can to keep prices low. The Central Bank lending limits are a really good thing, though they should not have been relaxed. Property tax is also a good way of limiting prices. Tax relief on mortgages should also be removed. That deals with the demand side.
Now what to do on the supply side. The problem is that our construction sector is fat and structurally inefficient after decades of massive margins and cronyism which feathered the nest of everyone in the sector. They are like a fat couch potato being told they have to play 80 minutes at a final in Croke Park. Try as they might it just isn't going to happen any time soon. We need a ringer; we need someone else's construction sector to play the match while fatty tried to do star jumps on the sideline.
Home Truths In Business
Does the house building industry need to change? Manuela Saragosa meets the disruptors, the companies trying to transform how the vast majority of residential property is built. Across the country new factories are springing up - in a bid to manufacture our homes in much the same way as we do our cars. The risks are huge.
Significant investment is required to get things moving and demand for these new homes has yet to be tested. But the disruptors claim that the house building industry must modernise or die. Productivity is falling and traditional skills are in short supply - something that is likely to get worse as immigration reduces. Other countries, too, already build huge numbers of homes off-site, claiming that this results in quicker and cheaper construction. So, just how many of the hundreds of thousands of homes that we need to build might end up being factory produced?