Brendan Burgess
Founder
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If your selling a 2nd hand house due to trading up, moving elsewhere....you now have to compete against Developers who are being subsidised for lowering their prices!!!
True, but I don't think the Govt want to see house prices come down. If they did NAMA might not make a fantasy 'Profit' they keep referring to.It could be argued that at the moment prices of second hand houses are artificially high because the government increases the costs of building new houses by around 30%. So removing that additional cost would increase the supply and bring down house prices - both new and second hand.
Brendan
I don't for a second believe this is an issue of any concern to the Government. It just looks good as another conspiracy theory!True, but I don't think the Govt want to see house prices come down. If they did NAMA might not make a fantasy 'Profit' they keep referring to.
I think you may be giving Alan Kelly and this Govt a tad too much credit!!!I don't for a second believe this is an issue of any concern to the Government. It just looks good as another conspiracy theory!
At face value this proposal appears unusual and in line with Sarenco's comment akin to the Water Grant debacle. However all we are getting here is the outline of the proposal rather than the justification analysis behind that proposal. Assuming that this is not just a Eureka moment at a Government brainstorming session then there must be a genuine rationale and justification that led to this proposal. If we can't see that rationale then how can we possibly understand the logic behind it?
Fully agreeThe only way to increase supply is to reduce the cost of building houses.
But they could and should do a feasibility study on reducing levies. You made this case yourself previously on your post on the "cost to developers of building houses".We can't do that because it would mean reducing VAT and various other levies and the EU might not let us reduce VAT.
Always a risk. However, the market is the market! If we accept the concept of a free market we must also accept the fact that every supplier of a product has the ability to increase prices to a level that the market will bear. The only alternative to this is to offer some incentive to the builder to keep prices at a lower level or in some way tax profit on excessive prices. This proposal appears to be the carrot rather than the stick approach.The other problem with doing that is that the builders might simply pocket the cash and not reduce the prices of housing, because prices are determined by a whole host of factors including the supply of second hand homes.
But what is the market rate and who decides it? This is the point made by a number of posters. I.e. Selling below "market value" gives a benefit to those who can avail of this limited availability. Who should benefit from this and why should those who benefit get a more favourable treatment than many others in similar circumstances at the expense of the taxpayer?So give the money we get in VAT and levies back to the developer and it amounts to the same thing.
Now that won't look very good to the public.
Make it a condition of the grant that they reduce the price below the market rate.
The only way to increase supply is to reduce the cost of building houses.
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