Current public sentiment towards the housing market?

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Calina

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Firstly can the debate about land taxes etc start a new thread if required ,off topic arguments do nothing for the thread except clog it up.
Secondly considering rents are lower now than 6 years ago can you imagine the case if immigrants were'nt arriving by the planeload!! rents would be even lower and prices may have already corrected. The EU accesion in 2004 gave the market an extra push, albeit short term. Apartments coming on stream all over Dublin, cant see rents going much higher in real terms, recent investors must be starting to feel the pinch of the rate rises,give them another year and low/zero/negative capital appreciation and they'll be rushing to exit the market.
agreed on the landtax first off.

secondly, another contributor to shoring up rents, certainly in parts of Dublin are the HSE rent payments. In parts of Dublin, that exceeds market rent for a lot of properties.

That being said, I would expect that the rental market will take a brief hammering as people try to cash in on their investment properties, particularly if they are subsidising rents.
 

gearoidmm

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Calina the IT's decision to buy Myhome at the top of the market makes no economic sense to me?. But it meet with board approval.
If you look at it a different way, it makes perfect sense. Myhome.ie revenue does not depend on house sales but on number of ads and how long they remain online. The very best time to buy it is when the market is turning, loads of properties are going online and staying online (or being renewed due to lack of interest)
 

bearishbull

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Use tax incentives to encourage long term ownership/renting, tax heavily those buying and selling investment property within only a few years. We need landlords and incentives work as seen by student accomodation etc. Anyway all the incentive of the past resulted in the massive supply being built every year so they may be counterproductive in years to come. No more property taxes / capitalist-socialist etc PLEASE!!
 

Calina

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Calina the IT's decision to buy Myhome at the top of the market makes no economic sense to me?. But it meet with board approval.
On the face of it, it makes very little sense to me, with an increasing number of estate agents also using DAFT. It's entirely possible that they have a nice little business plan stashed away for it but given their subscription model for internet access to IT content online, I'd be surprised if it was very innovative. The only thing I can think of is they are expecting that people will always - to some extent - be buying and selling houses, even if the speculatory mania dies down.

I question - based on available information and considerations - whether it was really worth what they paid for it, particularly given that I thought the IT wasn't the steadiest financially. Must have been wrong there. But basically, I think they overpaid for it. Buying it is fine and dandy, for the reasons that gearoidmm has mentioned. Still doubt it was worth what they paid for it, even if you could claim it was the top of the market. Was anyone else interested in it at the time? Can't remember.
 
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tententwenty

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Use tax incentives to encourage long term ownership/renting, tax heavily those buying and selling investment property within only a few years. We need landlords and incentives work as seen by student accomodation etc. Anyway all the incentive of the past resulted in the massive supply being built every year so they may be counterproductive in years to come. No more property taxes / capitalist-socialist etc PLEASE!!
Yup sounds good to me. Nothing wrong with a good healthy debate earlier on but now its getting a bit silly. Can we also get a seperate thread for posters crying about other posters discussions, and not adding anything to the site themselves? :D
 

bearishbull

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Mark Coleman of Irish Times on Newtalk saying media and government and banks should get together and try and engineer a soft landing for irish property market,he said things are getting unsustainable and things could get bad especially if a predicted world slowdown/recession occurs (IMF are predicting a significant chance of serious global slowdown in next few years)
 

room305

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Mark Coleman of Irish Times on Newtalk saying media and government and banks should get together and try and engineer a soft landing for irish property market,he said things are getting unsustainable and things could get bad especially if a predicted world slowdown/recession occurs (IMF are predicting a significant chance of serious global slowdown in next few years)
I think there was a few posts a while back wondering whether the soft landing was really a good idea. Did Mark Coleman suggest how it could be done?

They'd need to get the builders involved too. So much supply on the market that no new inventory should be coming on stream.
 

Calina

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Mark Coleman of Irish Times on Newtalk saying media and government and banks should get together and try and engineer a soft landing for irish property market,he said things are getting unsustainable and things could get bad especially if a predicted world slowdown/recession occurs (IMF are predicting a significant chance of serious global slowdown in next few years)
Interesting. The problem is I don't think it has been sustainable for at least two years and may closer to four so this smacks of shutting stables with horses long bolted. Also the only way to ensure a soft landing is to carefully balance the number of properties on sale versus the number of buyers. I don't think anyone is capable of doing it. I suppose the fact that it's an IT journalist saying it is a change from it just being the Indo, but anyway.
 

bearishbull

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I think there was a few posts a while back wondering whether the soft landing was really a good idea. Did Mark Coleman suggest how it could be done?

They'd need to get the builders involved too. So much supply on the market that no new inventory should be coming on stream.
He did'nt suggest how, just that it may be neccessary for them to get together as he seemed worried about the market and irish economy. I think he was saying media and banks have been hyping and the fear of prices rising more and pricing out FTB's became a self fufilling prophecy.
 
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tententwenty

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Also the only way to ensure a soft landing is to carefully balance the number of properties on sale versus the number of buyers. I don't think anyone is capable of doing it.
Well by a soft landing, they mean keep prices approximately where they are today. Which means banks have to keep lending out the same amounts that they are doing today. With rising interest rates, I don't think they can do that, without serious risk anyway. And where else will people get the money to pay for housing?
 

room305

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Two things happen when the market turns:

- Those holding multiple properties dump them on the market causing prices to tank
- Those wishing to buy effectively short sell, holding off for longer in anticipation of further price falls

For a soft-landing then you would have to discourage investors from dumping properties and reassure buyers that prices won't fall.

Whether it's a good thing to do or not is another debate but I guess the bank could effectively sell put options as part of the mortgage. So when the buyer sells their PPR, if the house sold for x less in nominal terms than the buy price, the buyers would be duly compensated. These put options would only be available to people who were planning on living in a property.

The government could also increase cgt for anyone selling a non-PPR that hadn't been let to a tenant for at least three years.
 

bearishbull

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Well by a soft landing, they mean keep prices approximately where they are today. Which means banks have to keep lending out the same amounts that they are doing today. With rising interest rates, I don't think they can do that, without serious risk anyway. And where else will people get the money to pay for housing?
Fitch forecasted the growth in lending will slow from circa 30% to 15% in 2008, if amount borrowed slows then prices wont be able to rise much if any.
 
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tententwenty

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Fitch forecasted the growth in lending will slow from circa 30% to 15% in 2008, if amount borrowed slows then prices wont be able to rise much if any.
But will they fall, is the question? A small reduction in prices over time would qualify as a soft landing.
 

Jeanne

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I'll third that! I know when I see a particular name or two that we're in for some tedious circular bickering. It's the lengthy point-for-point non stop rubbish that puts everyone to sleep.

...best keep it to current sentiment for sure :)
Agree. I'm skipping certain posts because they are too long and off topic.

House in Dundrum/Churchtown on the markt for over 2 weeks with only one viewing (no offer). No viewings lined up for tomorrow (I heard Thursday was supposed to be a popular day for viewings?) and as yet nothing for the w/end. So little interest in a popular area - definitely points to a change in public sentiment toward the housing market (back on topic :) )

12 months ago I believe there would have been lots of interest by this stage.
 

Afuera

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For a soft-landing then you would have to discourage investors from dumping properties and reassure buyers that prices won't fall.

Whether it's a good thing to do or not is another debate but I guess the bank could effectively sell put options as part of the mortgage. So when the buyer sells their PPR, if the house sold for x less in nominal terms than the buy price, the buyers would be duly compensated. These put options would only be available to people who were planning on living in a property.

The government could also increase cgt for anyone selling a non-PPR that hadn't been let to a tenant for at least three years.

I can't imagine the government, banks, builders, media etc. all getting their heads together to engineer something like this. This would be like shooting themselves in the foot and quite likely cause a recession (for which they would be held accountable).

The main result of the suggestions you made above would be to prevent new investors joining the market. They have been a sizable percentage of the market until now so this wouldn't be able to happen without a sizeable knock on demand. Lower demand would of course mean less building required (also less employment), less mortgage lending, less tax receipts, etc.

It's probably too late in the day for something like this to be successful. It's a lot easier for everyone to continue banking profits as normal and then point the finger at each other when it goes pear-shaped. The current crash in the US housing market will most likely be blamed as causing a domino effect around the world with very little analysis going into the local policies at fault.
 

Lumpsum

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"It's entirely possible that they have a nice little business plan stashed away for it but given their subscription model for internet access to IT content online, I'd be surprised if it was very innovative."


Well the IT started its own property portal, nicemove.ie, at the same time as Myhome set up. Bet they had a business plan for that too, and that it didn't involve recognising failure a few years later and buying their rival for a fortune.
 

Maine

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Originally Posted by bearishbull [URL]http://www.askaboutmoney.com/images/buttons/viewpost.gif[/URL]
Fitch forecasted the growth in lending will slow from circa 30% to 15% in 2008, if amount borrowed slows then prices wont be able to rise much if any.

The problem with this is at end of 2007 private sector debt will be heading to 400,000 million and by end of 2008 this up to 460,000 million. Interest to service it will at 5% approx 23,000 million

That compares to 2003 of 150,000,million at 3.25% or say 5,000 milion.

Thats an increase in interest of 18,000 million a year or 360 million a week.

What will we have innovated in the 5 years to justify that - anyone know of lots of googles being incubated in ireland
 
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blindjustice

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out of interest has anyones sentiment been changed or largely influenced by reading this thread? in either direction?
 
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treora

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Here is an unnecessarily long post:

Here's a set of ideas I cobbled together from better people's quotes on other boards. I even suggested it four years ago on a board that is no longer. Too late now, but here is the gist of it.

Why regulate a desirably open market. Well, because people like stablity and safety especially when there are children around. Once upon a time driver licences were not regulated, and now look at us drive. I wonder what it could be like if there was no regulation? Economics like atomic physics works on the principles that chaotic atoms in a relatively vacent space rarely initially clash. Over time they clash more; add more atoms and they are bound to clash until gradually they follow universal principle of physics - binding and attraction etc. - to find a mutually acceptable temporary conclusion. Buying property will eventually lead to the same conclusion with a market solution. However unlike other creatures we can self examine in an abstract sense and act communially to a mutually profitable outcome. That's called regulation to you and me. Too much is horrendous and once indroduced it has to be continually monitored and adjusted, but it is possible.

The objective is to create efficient use of land with regards to residential use. Following the concept (below) developers would move to high value family apartments in 15+ story buildings in the city centre, possibly dual purpose office space. Those high wealth individuals would push for a high quality infrastucture in a high density - high quality residental area, that means a good metro system to you and me. Why high value - well the rich won't let their high rise turn to ruins. The biggish houses on the communter belt that are not listed can be grouped and redeveloped into mixed density suburban housing hopefully with better infrastructure. Growth can be sustained and property can be sold on more level playing field.

Idea
Primary residence is tax free to a limit, twice that limit if it is used as a home business (inc. farm), both annually provable. Garden space is non taxable to the same space as the house allowance and three times the house allowance if it is a working yard(annually provable). 2 parents with 3 children can have a working house of 600SqM (Rural surgery/B&B) and a working yard of 900SqM(creche play area etc). There after each square metre is annually charged at a base rate by an annually adjusted local services multiplier. Underground utilities (parking, storage, laundry rooms) are not taxed, but surface parking eats up garden allowance. Commerical/farming property is treated under current statute or adjusted as appropriately. This does not apply to mobile homes.
Sq. metres Number of people living at that address
70------------1
125----------2
+35...-------+1...

Accommodation registered with the tenancy board can have the same allowances. This provides rentable accommodation and removes speculators/holiday home owners and empty (inefficient) houses from the market. An extra exit tax should be placed on the sale of rented accommodation. This means that rental investors would really want to make a profit and provide a quality service. However if a house has been converted from a rented house to a primary residence for two years (allowing rented rooms) then no exit tax would be charged.

Unfortunately this requires a national compulsory biometric identiy card - social welfare, driving licence, revenue work status, electorial/census register, primary residence, nationality, age, gender. Why? Well random audits would have to be carried out. Fortunately it would be the speculators or the suspected social housing manipulators that would have most of the audits. Also a big help would be to push the lending stress test criteria from a 2% to 3.5% phased over the next 28 months.

Incidentally mortgage is from the French 'death gauge' or gauge of how long you have left to live.

Commence the hold poking.
 
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