Who speaks for the squeezed middle in the pre-budget submissions?

[Purple]

Back in our parents time, a single income could support the purchase of a house and the likes of Mount Merrion was the area of choice for senior civil servants - I am wondering how many could afford to live there now?

The population has increased by nearly 50% since 1980.
I grew up in Rathfarnham. Very few of the people I went to school with can afford to live where they grew up. The reason for that is that their parents are living too long. The area is full of old couples living in family homes. Other than forced euthanasia I don't see how we fix that problem.
We talk about needing to increase incomes to enable people to afford to buy houses. We don't talk about the why construction costs are so high here, and I don't mean taxes and levies. This is interesting in that context.

 

[Firefly]

And lets say they have two kids in creche - that 2k is easily gone on creche fees. Our old creche has just increased its fees to 1200/month from September 1st...

Yeah, creche fees are very high in this country for sure. Having children and trying to save for a house must be very difficult. We decided to save for a house, get married, buy a house and then try for a family in that order so it was easier that way.

Out of curiosity, how long should people be expected to save for a house on average? Is it 2 years hard saving, 4 years hard saving, 10 years hard saving... what rule of thumb would be used on average historically to save the deposit for a house?

Depends on the disposable income, individual circumstances and they type of house and location I suppose. We saved for 2 years for our first place but that was only a humble 1 bed apartment. Another 2 years with the equity from the apartment and we were able to trade up to a house.

 

[T McGibney]

Then everybody or at least all couples earning 49k are undertaxed. OK they have a 256 pp age credit, but otherwise everybody pays income tax on the same basis as everybody else. So if you believe Protocol's parents are undertaxed, everybody at this level of income is undertaxed. The 'other countries' bit is spurious; we live in Ireland, not in 'other countries'.

Take it up with him. I'm only telling you what he said and I suspect you misread.

 

[PGF2016]

Out of curiosity, how long should people be expected to save for a house on average? Is it 2 years hard saving, 4 years hard saving, 10 years hard saving... what rule of thumb would be used on average historically to save the deposit for a house?

Depends on the house. I would say 2 years minimum. Of course that's an opinion not a fact.

 

[Leo]

This looks like it would make a very nice home and should be affordable to a couple on €75 k between them. Loan repayments €1,300 per month based on a 10% deposit.

So long as they're happy their kids will be educated in schools that mean they have a significantly lower chance of progressing on to 3rd level than their neighbours in D14, D16, D18, etc. and deal with the ongoing anti-social behaviour in the area.

 

[PMU]

I grew up in Rathfarnham. Very few of the people I went to school with can afford to live where they grew up. The reason for that is that their parents are living too long. The area is full of old couples living in family homes.

No. It's because the people with whom you went to school are not earning enough money to buy, or to finance a mortgage to buy, a property in Rathfarnham. It doesn't make a difference if the properties are empty, full of old codgers or of people from outer space. If you can't afford to buy it, you can't have it. And life does not owe your old school chums a property in Rathfarnham or anywhere else. (I presume you were being sarcastic with the comment on euthanasia.)

We talk about needing to increase incomes to enable people to afford to buy houses.

No, we don't. This is because in the real world we pay people for the marketable goods and services they produce, not to finance their spending desires.

 

[Firefly]

No. It's because the people with whom you went to school are not earning enough money to buy, or to finance a mortgage to buy, a property in Rathfarnham. It doesn't make a difference if the properties are empty, full of old codgers or of people from outer space. If you can't afford to buy it, you can't have it. And life does not owe your old school chums a property in Rathfarnham or anywhere else. (I presume you were being sarcastic with the comment on euthanasia.)

No, we don't. This is because in the real world we pay people for the marketable goods and services they produce, not to finance their spending desires.

Yeah Purple, no one owes you a living buddy

 

[Purple]

No. It's because the people with whom you went to school are not earning enough money to buy, or to finance a mortgage to buy, a property in Rathfarnham. It doesn't make a difference if the properties are empty, full of old codgers or of people from outer space. If you can't afford to buy it, you can't have it.

You do understand supply and demand, yes? The reason there is more demand is because there are more people. That is not because of people from outer space but rather because the population has increased. People who earn the same of more than their parents did can't buy in the areas they grew up in because their parents generation and their grandparents generation are still alive. The same goes for many areas of Dublin and elsewhere.

And life does not owe your old school chums a property in Rathfarnham or anywhere else.

I agree. What's your point?

No, we don't. This is because in the real world we pay people for the marketable goods and services they produce, not to finance their spending desires.

We are talking about increasing incomes for rent and for houses. That's the problem. The rent allowance paid to welfare recipients are being increased even though that just pushes up prices; more money chasing the same stock of properties. The same goes for the Central Bank rules on mortgages. It's utter nonsense and ignore the reality of supply and demand.
We need to find a way to build cheaper houses. I have suggested that we have an EU tender to supply a billion or so worth of houses, maybe 4 or 5 designs, factory built in Germany or Holland or some other country which used 21st century building techniques. If we can take the Irish construction industry and Irish Trades people out of the equation we'll get superior quality cheaper units without the shoddy Irish standards.

 

[Purple]

Yeah Purple, no one owes you a living buddy

Lol.
Someone's getting the wrong end of the stick.

 

[cremeegg]

the likes of Mount Merrion was the area of choice for senior civil servants.

So long as they're happy their kids will be educated in schools that mean they have a significantly lower chance of progressing on to 3rd level than their neighbours in D14, D16, D18, etc. and deal with the ongoing anti-social behaviour in the area.

You are just making my argument for me. Too posh to live in Tallaght, to poor to buy in Mount Merrion.

And its not just the spoiled children of the middle classes. Peter McVerry and his clients that are to be sympathised with because they are homeless, (and I do sympathise with anybody who is homeless) but it seems they cannot be housed out of Dublin, because they would be away from their families.

 

[PMU]

People who earn the same of more than their parents did can't buy in the areas they grew up in because their parents generation and their grandparents generation are still alive.

Are houses in Rathfarnham expensive? It's a big area but Daft.ie currently shows a semi-detached 3 bed 3 bath house on Prospect Meadows, Prospect Manor is on sale for 460,000. Daft.ie also shows a similar house on Prospect Drive to rent for 2,300 per month, I.e. the house is on sale on a P/E ratio of 16.6. I wasn't able to find other equivalent examples where houses were for rent and on sale in the same estate, but I'd say this is fairly par for the course

Is this expensive?

Irish shares currently trade on a P/E ratio of 19.1, (http://www.starcapital.de/research/stockmarketvaluation), so the house is cheaper than Irish equities, and you get to live there, i.e. you save on renting.

The house is not expensive, relative to other assets. Its cheaper than equities, which what you would expect. I'd say it's fairly priced. If you can't afford it that's your problem but it's not excessively priced relative to other assets. If you can't afford this house it's nothing to do with the parents/grandparents hogging the market. It's to do with the implied earnings yield.

 

[Brendan Burgess]

Back to the main topic

Who speaks for the tax paying workers?

I will probably do a Pre Budget Submission based on my earlier post.

It will be a personal submission, but maybe I will make it "on behalf of all taxpayers and workers"

Brendan

 

[gnf_ireland]

@Brendan Burgess would you consider including an ISA type facility in your submission? Even if it was capped at 6k or 12k for an adult per year, and 3k for a junior one, it might be a good idea to promote better financial behaviour. I would not suggest we should do a 25% bonus like the SSIA, but rather fund it out of after tax income, but let the funds grow in it tax free - even if a 5 year minimum term is included, although can last as long as you wish.

Obviously this would hit CGT, Exit Tax and DIRT, but might be better to give an allowance tax free given the taxes are so high for investments in general...

 

[Brendan Burgess]

Hi gnf

I had not planned to do so.

But I might make a general submission and then list 20 ideas for improving the long term financial stability of the country.

Brendan

 

[Early Riser]

It will be a personal submission, but maybe I will make it "on behalf of all taxpayers and workers"[/QUOTE]

That is very magnanimous of you! Perhaps something along these lines :

"The proletarians have nothing to lose but their chains. They have a world to win.
Workingmen of all countries unite!”

 

[Purple]

If you can't afford this house it's nothing to do with the parents/grandparents hogging the market. It's to do with the implied earnings yield.

Okay, so you don't understand supply and demand and I can afford it but this is a general discussion.

Back on topic; the phrase "The squeezed Middle" is, ironically, damaging to working people. It implies that it is the wealthy who are the problem, gaming the system to suit their own interests. The reality is that it is our very generous welfare system, our grossly inefficient State sector and our unsustainable State pensions liability which is sinking us.

 

[cremeegg]

Hi gnf

I had not planned to do so.

But I might make a general submission and then list 20 ideas for improving the long term financial stability of the country.

Brendan

It is much easier to get a political and media response around a single clear idea.

 

[cremeegg]

Someone who chooses never to work will get the same Old Age Pension as someone who has paid into the social welfare system all their life.

A person who has worked for thirty years, who loses their job, gets effectively the same Jobseekers as someone who has never worked a day in their life.

If you take out health insurance, you will be charged for a bed in a public hospital.

If you save hard to buy a new house, you will pay VAT at 13.5% and you will fund a social housing levy for those who rely on the state for housing.

If you pay your car insurance, you will pay a levy to fund the claims for those who don't bother to pay their car insurance.

Any one of these points alone could ignite a public response.

 

[Purple]

Any one of these points alone could ignite a public response.

All of those points have been raised in the media already by Brendan and others. They won't get traction because they do not suit our left wing media's agenda and unless something is written by Reuters, the London Times or the English Daily Telegraph it won't make it into the Indo.

 

[Brendan Burgess]

It is much easier to get a political and media response around a single clear idea. Any one of these points alone could ignite a public response.

Any one of these points alone could ignite a public response.

All of those points have been raised in the media already by Brendan and others. They won't get traction because they do not suit our left wing media's agenda

I understand the point you are making, but the problem with a single idea is that people get bored listening to it. The problems are complex and they need complex solutions. Having said that, the media wants sound bites "Tax the rich to help the poor"

Brendan