Limit residential property supply, especially where it is needed. Ignore increases in demand for residential property, especially where it is needed. Provide incentives for people chasing limited supply of residential property, especially where there is greatest demand and least supply.
Unnecessarily increase residential property development costs so capital is diverted down the easier route of acquisition rather than development.
The Help To Buy scheme should more correctly be called the Help Sellers to Make More Money scheme or Force Buyers to Compete More scheme. It is the state-sponsored financial equivalent of a wellie throwing competition.
Just as Cato the Elder was said to have ended every speech with “Delenda Est Carthago”, every post here should end with “Domus Sunt Construendae”.
Simpleton Simon is no Scipio Aemilianus. He is not even a Bob The Builder.
Yep mission accomplished. I don’t care what the stats say Dublin prices are looking as mad as they were in 2006, especially for ordinary homes. Last time there was credit to fuel the madness this time there is panic, propaganda and government racketeering. I’ve given up predicting when the next crash comes however it feels close.
Prices will be “surging” upwards for a while yet. All Govt policy (actual and unstated) is intent on it. I fully expect the VIs to focus their firepower on the LTI 3.5 limit through 2017/18, so that “the peoples can afford dem new builds”.
They’ll quote the example of the UK’s higher LTI limit - which is working out like gangbusters for them over last few years.
Also, to the cash buyer the limits are irrelevant anyway. A lot of people in Dublin with increasing amounts of cash in last year or so.
I agree with what you say and there is no doubt the idiots in Government want a return to bubble prices (the fabled recovery). However there is no law that markets must retrace 100%. I agree they will like surge higher in next few months as there is nothing for sale and lots of panicked buyers out there…
2017 will be an interesting year. Will the Trump Slump arrive? Will it be the beginning of the end for the EU? Will the bond market finally collapse. Soon overpriced shitboxes in the trendy areas of Dublin might be the last thing worth talking about.
Scratcher - I have no idea if prices will retrace to what they were in the sickness of 06/07. But i do know that the mentality out there among buyers is a little different.
FTBers are so desperate to escape a generational high in renting, that they just want to get out of the rental market, and they want to buy a home. There isn’t - as far as I’ve seen among work colleagues - a speculative mindset of “buy for a few years then trade up” like was more prevalent in 2000 - 2006.
That’s what makes this rise in prices so frightening for me: it’s fuelled a lot more by desperation than speculation. People are also buying in at the margin of their financial limits, but at historically low interest rates.
It is potentially a bomb waiting to go off… I just don’t know how much fuel the Govt and the people will manage to pack in to it before it blows up. Again. And I’ve no idea what the new peak in prices will be, and over what timeline it will arrive. And I don’t know what event might precipitate the next crash.
Well as you can see that madness is certainly where it was back in the Celtic tiger days. What happens when we have another Lehman moment? I recall all of that ‘supply’ narrative, regurgitated, ad nauseam by our unbiased media, that fueled the last bubble suddenly evaporated into thin air. Caveat emptor…
In theory, the government could resolve the problem by literally setting up a new large town outside dublin, on a major pre-existing road and rail link.
I would suggest making it walkable, with a small footprint and high density. Hire international experts on livable cities to draw up a street plan so that no point is more than 1000m away. If covered paths can be made universal, all the better for a rainy country where people die because they don’t walk enough.
I would say have a mandatory four-story building height, with lifts mandatory. (I myself would opt for a tasteful reproduction of a medieval/early renaissance walled-town streetscape, because that’s the type of living arrangement that pleases me best. But if people insist on a modernist style, fine. The point is to reduce car dependence and persuade people to live in ways that make public service provision simpler).
The state wouldn’t build most of it itself, just the basic infrastructure (build the metro and piping and wiring tunnels before you set up the city). They would hire experts to specify exacting standards for builders to follow (like they do in tourist towns on the continent), then leave it up to builders to actually construct the individual dwellings. For major squares and signature buildings (main theatre, university, town hall) you want classically-inspired buildings. O’Connell St is a decent example of this kind of state-guided architecture. You’ll notice that most of the buildings that were rebuilt after the rising are designed to a high standard. That’s because the city authorities insisted on high standards.
All the state needs to do is look at the OSI surveys they already have access to, select the best possible site based on what they know. Then compulsory purchase the land and pass a bill. The city itself would probably be able to issue bonds to pay for the infrastructure build.
One thing is totally certain: the new town WILL, by total coincidence, be located at the intersection of at least three constituencies, so that over a dozen TDs can vote for it saying they brung home the bacon to the home patch.
But wasn’t that not just the implied intention but the actual stated intention when Coveney announced it? Something about closing the gap between what people could pay and what builders wanted to sell for
Interesting idea, which sadly will never happen. A more realistic plan would be for the Govt to make a serious effort to designate Cork (or Galway) as the counterweight to Dublin, and invest heavily in transport and other infrastructure there, doubling or tripling the size of the University, along with moving half of the Govt departments there. The aim should be to have a population of at least 400,000. This would in turn lead to increased populations in surrounding towns and lessen the distortion caused by Dublin’s size relative to the rest of the country.
The simple solution is to slightly dumb down the building regs so that builders can build at what the market will pay with NO HELP and ratchet up the regs as the prices rise organically (if they do with supply coming on)
I don’t care who is driving it. It is impossible to build a house at a reasonable price to the current Regs AND sell it AND make a profit somewhere like Galway. So nothing is being built bar one offs and student flat complexes.
The LAs and Irish Water have ramped development and connection charges hugely as well. They were circa/sub €5k per unit in 2008 and are now nearer €15k per unit. I’d cap them at €7k in areas of supply side problems by law (not for one offs but multi unit developments* of at least 10 units*) …same as rent is capped. A builder does not need pick a number style development charge uncertainty where margins are tight.
So the regs need dumbing down fast along with charges and then the taps will open supply side where there is demand for new units (thats Cork Galway and Dublin and their hinterlands ONLY) . Both charges and regs can be tightened incrementally once reasonable activity starts.