independent.ie/opinion/colum … 42112.html
Interesting article but I would be quite surprised not to mention left dumbstruck if Brian Cowen turned on the developement class whom his party has been so fond of all these years.
Although one has to ask, what’s in it for FF longterm now? Realists would recognise that property mania in this country is dead. Like the IFA in the 90’s, the numbers in their ranks will gradually decline so as to return to being “just another lobby group”.
In ten years, there’ll be another all-powerful lobby group with the govt in their pocket - let’s just hope they represent an industry which generates real wealth for the country.
Brian Cowen will do nothing about the developers. They’re the people he used to rubshoulders with on a day to day basis. His brother is a local councillor and estate agent/mortgage broker who I personally wouldn’t trust with my business. He is a partner in a solictors practice in Tullamore so conveyancing work is important to him.
He owns rental property himself.
Flanagan is a FF councillor in Tullamore who is a very prominent developer in the area. County Council staff are at his beck and call. The local party silenced another FF councillor who commented on the conflict of interest Flanagan held.
Cowen will keep supporting the developers through every method available to him.
Not sure where McWilliams gets his figures from:
According to this article there are 8.9 million millionaire households in the US, which is 3.0pc of the population (assuming one millionaire per household), not 0.7pc as he claims.
Also, note that the US measure EXCLUDES the primary residence when calculating wealth. Obvoiusly a million dollars is worth less than a million euro, but I wonder out of BoI’s supposed 100,000 Irish millionaires how many would make the grade if you didn’t include the primary residence?
Not disputing that there are plenty of rich people in Ireland, but there’s no way I buy an argument that Ireland has more stratified distribution of wealth than the US. McWilliams needs to check his facts more carefully.
There are certainly many people who did benefit, but not everyone may have taken the opportunity to trade down and bag the cash - some because they assumed prices would keep going up, others because they simply didn’t want to part with the property. I know several people in the latter position, who are not perturbed by falling prices since they paid comparatively little to begin with and have no desire to sell their family home any time soon.
Also, for those that did cash in, I wonder how much of the hard cash ended up back in the market, paying for their offspring to get on the ladder with a 1 bed in Grand Canal Dock or Leopardstown.
There’s probably a degree of pyramiding going on too (taking profits from one investment to buy another) - which as any investor will tell you, if done recklessly, than wipe out a decade’s profits in a year (or on the stock market, wipe out a years profit in a day).
I think more expensive houses will drop most in a downturn.
All purchasers of houses look at the cost of the repayments versus the cost of renting.
In rough figures a young couple who borrow €250K might be looking at a mortgage repayment (before interest relief) of €1,400 pm.
The rental cost might be €750 to €1,100pm depending on location.
The numbers are not very compelling to suggest someone should buy rather than rent, but some people will opt to buy to have a place of their own
However, they are much better than when we look at someone who borrows €1,000K,
Mortgage repayment €5,600pm. (interest relief a smaller proportion of overall repayment)
Rent: I would guess less than €3,000pm.
the numbers would suggest you need to be daft to buy.
More expensive properties which would attract a lower rental yield the less expensive properties, will fall more in a downturn as the prospective purchasers will see less value in buying then renting at the top end of market.