I don’t think exemptions are the issue here. I don’t even think that in the house sales market supply is the issue. It certainly is in the rental sector. Sales appear to be ticking up at the moment but there were 5600 houses on MyHome in Dublin almost constantly since August. There are now just over 5500. Sales are running at between 3 and 400 per week which they have done all year bar a couple of months.
The problem is price , and it looks like prices are coming down - up until September most of the falls were in prices over 500k , now there are falls in all ranges and very few rises. The PPR numbers for the last quarter could prove interesting.
The main house-buying cohort are between late 20s and mid thirties. These people starting work in the recession, many work in low paid jobs in the IT sector (very few work in the headline high paid jobs) that don’t get pay rises. Their ability to save is crippled by the cost of rent. To put it crudely - you can’t save until you are sharing a bed with someone - then you have a remote chance of saving to buy a house but it will take you 4 to 5 years and you both need to be in the 60-70k bracket to afford a place to live in Dublin. The concentration of wealth means that more of the population is under the average salary - anybody know what the mean salary is in Dublin?
If exemptions were an issue there wouldn’t be such a sell on long running AIPs. Even if a higher level of credit was on offer most people are not in a position to take it nor do they have the desire to do it - the force of the race memory is strong here. The ‘young’ (i.e. people in that cohort that are looking to buy) people I talk to are taking long AIPs to be ready for a fall in the market - they now believe it’s going to happen, they can feel prices softening - when that starts to happen it becomes a self-fulfilling prophecy
The question I would ask of people who query this is ‘Who do you think is going to buy these houses?’ . Up until recently the answers could conceivably have been ‘investors’ - I don’t think they are interested - as I have argued before when the crazy gains go out of the market the investor/speculator market is gone. Purchase of apartments for rent by REITs is still going - it’s a simpler model,it has tax benefits but at this stage it’s mainly just the local REITs that are buying. The unfortunate thing is that we need more apartments for people to buy but I can see the REITs preferring to sit on empty property, trying to ‘comntrol’ the market rather than taking rent hits. This is not going to be very popular if it happens - I would not like to be involved a REIT in that case - they will become targets for a tsunami of hatred.