Government policy keeping 1st time buyers out of the market - they're trying to blame Central Bank

Disillusioned democrat

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So the new stats based on all house sales as opposed to mortgages demonstrates that 1st time buyers are now only 25% of the market.

"Cash" and "corporate" buyers now hoovering up the vast majority of available property.

Media spinning like mad. Classic interview on DinnyTalk just now (and, for the purists, I admit I'm paraphrasing.

Charlie Weston: "the new stats reveal that REITS (which FG "enabled" during the crash) are dominating the market!!!"

Paul Williams: "so you're saying the Central Bank rules on deposits are keeping 1st time buyers out of the market?"

Charlie Weston: "not really, what's emerged is the big corporate buyers for the buy-to-rent sector that can raise capital on the open market and have the advantage of being able to buy for cash at lower costs"

Paul Williams: "so what you're telling me is that the Central Bank has thrown the baby out with the bath water and we're being too cautious and that's keeping 1st time buyers out of the market?"

Charlie Weston gets text from INM bosses (but I'm speculating here:p)

Charlie Weston: "Yes Paul"
 
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captain obvious

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Yes, I listened to that depressing exchange lining us all up for another bubble.
Not addressing the primary issue being that housing is not affordable for a large proportion of the population.
 

gleeful

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Foreign capital owning the buy to let sector is a good thing for two reasons.

When the buy to let sector was controlled by FF/FG voting professional Irish people TDs were unwilling to regulate it. Now that foreigners (absentee landlords in effect) own it, that political barrier is removed. Rent contols here we come.

Second - when the next crash comes - big capital will be the ones to suffer and the Irish banks (assuming there will be such a thing by then) will be fine. Thats good for economic stability.
 

captain obvious

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Foreign capital owning the buy to let sector is a good thing for two reasons.

When the buy to let sector was controlled by FF/FG voting professional Irish people TDs were unwilling to regulate it. Now that foreigners (absentee landlords in effect) own it, that political barrier is removed. Rent contols here we come.

Second - when the next crash comes - big capital will be the ones to suffer and the Irish banks (assuming there will be such a thing by then) will be fine. Thats good for economic stability.
And meanwhile, that foreign capital is extracting money from the Irish economy ?
 

Disillusioned democrat

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Yes, I listened to that depressing exchange lining us all up for another bubble.
Not addressing the primary issue being that housing is not affordable for a large proportion of the population.
Two parallel tracks here, both designed to enrich the "property sector" at the expense of the average citizen.

1 - home ownership will be beyond the reach of the majority of the population who will then have to pay rent to REITs forever ka-ching!!!

2 - the 25% determined wretches who see the pitfalls of a life renting will have to save/borrow/spend more and more for their homes - ka'ching!!

It's beginning to look like FF aren't the only mainstream political party pulling for the developers.
 

hammer

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Mr Angry on this site used always promote the big REITs over small landlords.

For some reason he has vanished.
 

GDPR

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Yes, I listened to that depressing exchange lining us all up for another bubble.
Not addressing the primary issue being that housing is not affordable for a large proportion of the population.
But fixed that will have to be.
It's not an easy one in fairness, with knock on effects wherever you turn, the CB solution for example is driving up rents through lack of supply.
As in all things a balanced approach will in the long term work best and the CB approach isn't balanced, it's a one eyed accountants solution to what is basically a human problem.
 

hammer

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Two parallel tracks here, both designed to enrich the "property sector" at the expense of the average citizen.

1 - home ownership will be beyond the reach of the majority of the population who will then have to pay rent to REITs forever ka-ching!!!

2 - the 25% determined wretches who see the pitfalls of a life renting will have to save/borrow/spend more and more for their homes - ka'ching!!

It's beginning to look like FF aren't the only mainstream political party pulling for the developers.
So you would prefer if there was another collapse ?

The only difficulty at present is due to the DELUDED years. We were bankrupt and are now paying for it through new charges and higher taxes.

This makes it far more difficult to save a deposit and wages / salaries are now lower.

So the problem happened when exactly. Engage the brain.
 

Disillusioned democrat

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Foreign capital owning the buy to let sector is a good thing for two reasons.

When the buy to let sector was controlled by FF/FG voting professional Irish people TDs were unwilling to regulate it. Now that foreigners (absentee landlords in effect) own it, that political barrier is removed. Rent contols here we come.

Second - when the next crash comes - big capital will be the ones to suffer and the Irish banks (assuming there will be such a thing by then) will be fine. Thats good for economic stability.
I'm not 100% convinced this IS foreign capital, from what I understand many of the names in the "Who's Who" of the Celtic Tiger Golden Circle found the odd €500m down the sofas in their Bahamian getaway while working through quickie bankruptcy (big shout out to Labour!!) and are now investing this tax free back in Ireland.
 

captain obvious

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Two parallel tracks here, both designed to enrich the "property sector" at the expense of the average citizen.

1 - home ownership will be beyond the reach of the majority of the population who will then have to pay rent to REITs forever ka-ching!!!

2 - the 25% determined wretches who see the pitfalls of a life renting will have to save/borrow/spend more and more for their homes - ka'ching!!

It's beginning to look like FF aren't the only mainstream political party pulling for the developers.
Yes, the narrative is we need more houses but it is not profitable for developers to build (not clear to me if that is break-even or making a shed load of money).

If the government were serious about this they could implement taxation on land, rezoning or relaxation of height limits in places like Dublin. But that all has the effect of reducing prices. The solution - relax bank lending rules so people can get further into debt .
 

hammer

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20% deposit
4 times salary
Fixed interest rate 3%
20 year mortgages

And stick rigidly to it for years not weeks/months.
 

Disillusioned democrat

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20% deposit
4 times salary
Fixed interest rate 3%
20 year mortgages

And stick rigidly to it for years not weeks/months.
As long as there's any chance this is going to go away builders will sit on their hands rather than being busy fools building "affordable" homes.

Until they realise it's here to stay they wont innovate in terms of building process, management, financing, etc, to reduce costs.

Our government are not to be trusted in this because rigging the property game is their go-to play for making cronies wealthier.
 

PBP voter

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Good in a way.

It keeps idiots away from huge loans that they can never pay back.

Now we just need to change the laws so renters have much more security. Long term renting like in France.

Plus a good stock of social housing.
 
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mr_anderson

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Foreign capital owning the buy to let sector is a good thing for two reasons.

When the buy to let sector was controlled by FF/FG voting professional Irish people TDs were unwilling to regulate it. Now that foreigners (absentee landlords in effect) own it, that political barrier is removed. Rent contols here we come.

Second - when the next crash comes - big capital will be the ones to suffer and the Irish banks (assuming there will be such a thing by then) will be fine. Thats good for economic stability.

You're potentially wrong on both assumptions.
Rents are going up because of a lack of supply.
Rent controls help those who already have a place.
They do not help those who don't.
Furthermore, rent controls make it less attractive to own a BTL, making the current supply of available rentals shrink below what it would be without the controls.
In essence, rent controls do not solve the problem of a shortage of supply. They make it much, much worse.
Look at Berlin. It had a rent control system that 'worked' ... until they hit a supply shortage. And then it didn't.

On your second point, unfortunately this lack of supply pushes up the price of property for everyone.
The is leaves banks heavily exposed to an artifically inflated housing (and consequently mortgage) market.
When the bottom falls out of the market again, the Irish banks won't be exposed to the REITS, but they will to every domestic buyer.
It just means prices rise far in excess of what they should be.
And we all pay for the consequences of that !
 

captain obvious

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20% deposit
4 times salary
Fixed interest rate 3%
20 year mortgages

And stick rigidly to it for years not weeks/months.
Yes. If the median income is 18K (CSO SILC 2014) that would put a ~ 50% of all families at 36K or under (I know combining medians like this is a little risky). So that would mean that only 50% of dual income households could afford 150K mortgages or higher. Median price for Ireland is currently 195K according to property register.

Prudent rules immediately price over 50% of population out of the market. So the alternatives are, be imprudent (being pushed at the moment) or tackle the underlying issue, price of housing.
 

hammer

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As long as there's any chance this is going to go away builders will sit on their hands rather than being busy fools building "affordable" homes.

Until they realise it's here to stay they wont innovate in terms of building process, management, financing, etc, to reduce costs.
Agreed.

The last comment is a little strange. There aren`t too many developers out there.

There aren`t too many developers that the banks will help finance.
 

hammer

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Yes. If the median income is 18K (CSO SILC 2014) that would put a ~ 50% of all families at 36K or under (I know combining medians like this is a little risky). So that would mean that only 50% of dual income households could afford 150K mortgages or higher. Median price for Ireland is currently 195K according to property register.
What a load of boll%% :)
 

L'Chaim

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20% deposit
4 times salary
Fixed interest rate 3%
20 year mortgages

And stick rigidly to it for years not weeks/months.
Didn't the banks used to do that, though wasn't it 10% deposit. It worked. It's how I got my mortgage, though I had a tracker one. (though I might have changed to a tracker half way through, I can't remember)

My opinion on the Op is that first time buyers are being kept out of the market because they are looking at properties they really can't afford. If their limit is 200K they seem to go for properties where the asking price is 200K and very quickly they are out bid. When i got my mortgage I was approved for 60K (it was a good few years ago lol). I didn't look at anything where the asking price was above 50K. It gave me a bit of room to bid if someone else was interested. I eventually got a property that was close to my mortgage approval. First time buyers aren't being kept out of the market, they just set their sights too high going into it
 

hammer

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Rents are also increasing due to tax regime in Ireland.

Mortgages need to be paid out of after tax rental income.

Taxes for any decent size landlord are 40%+5.5%+4%
Interest rates are exceptionally low and only 75% is allowable
It leaves a huge profit rent but a large tax bill

The State benefits from all the extra tax - the loser is those renting.
 

hammer

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Didn't the banks used to do that, though wasn't it 10% deposit. It worked. It's how I got my mortgage, though I had a tracker one.

My opinion on the Op is that first time buyers are being kept out of the market because they are looking at properties they really can't afford. If their limit is 200K they seem to go for properties where the asking price is 200K and very quickly they are out bid. When i got my mortgage I was approved for 60K (it was a good few years ago lol). I didn't look at anything where the asking price was above 50K. It gave me a bit of room to bid if someone else was interested. I eventually got a property that was close to my mortgage approval. First time buyers aren't being kept out of the market, they just set their sights too high going into it
Absolutely.

There expectations may be a little high.

But it is fairly essential that you buy in a good area.
 


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