There Is No Ladder

Enjoy, or perhaps not.

There Is No Ladder

could we invite them to the pin ??

I hope TUG reads that

Please don’t tell me you think that this is proper analysis just cause it is the “printed” word and has a go at VI spin.

Well said Persius.

As an argument, that only works in an era of rapid capital appreciation. It can be argued that the way the property market in Ireland worked - forcing people into starter homes has been detrimental to people actually buying homes as opposed to trying to buy homes. No one buys a starter home to stay in - but a significant number of people may be trapped in one as the market reverts to mean.

It can also be argued that their ability to borrow onto the second rung has been aided by looser lending criteria.

In short, whilst I haven’t read the “no ladder” article yet, I would venture to say that only because so called starters were built did people actually buy them. None of them are suitable for long term accommodation for anyone and - this is the key point - no one HAS to buy so arguments of “rent” equalling cost of buying does not imply compulsion to buy. It is - still - a lifestyle choice and anyone taking it now is probably not well advised to do so.

Including dividends, they’d be doing reasonably by now

There is no ladder.

What use is a ladder where the rungs move away from each other?

The term Property Ladder is just a marketing euphemism …

Blue Horeshoe

Let’s call it the poverty ladder instead.

I’m not sure which ladder it is… but its one of these…
https://www.compliancesolution.com/ComplianceSolution/Pictures/home_made_ladder[1].jpg
or
https://www.ladderdepot.com/blog/images/unsafe_ladder_use_large.gif

I think the guy holding up the ladder in the second one could be the ECB, unfortunately he’s popped out for a bit.

Not necessarly. There are plenty of other situations where that makes sense. E.g. capital appreciation in line with general inflation, mortgage payments not significantly higher than rental payments. Poor rental laws mean sub-standard quality and no security of tenure. Transaction costs not so high that you end up with a loss after above capital appreciation. Purchaser(s) know that they won’t need a family home for at least 5 years. There are plenty of scenarios where it can make sense, just like there are plenty of scenarios where it doesn’t make sense. E.g. Germany with static or slightly falling property prices, strong tennancy laws, poor demographics, potentially long selling cycle.

I agree with you that our planning has been appalling. There’s been no overall vision about what mix of property types we will need now, and in the next 20 to 50 years. It’s just been a case of each individual development saying we need x 1 beds, y 2 beds and z 3bed appartments, along with a 3 bed duplexes and b 3 bed semis. This ratio is usually picked to maximise profit for todays demographic (with the “must get on the ladder” mentality), but will be widely out of kilter for the demographic profile of the country in as little as ten years time IMHO. My last appartment in Germany was built around the turn of the last century. Many of these old buildings are the preferred option for students and young people due to their ambience (people love the high cielings) and central locations. Will the appartments built in Ireland over the last 10 years still be around at the turn of the next century?

However, I suggest you do read the article. If you want to credibly put arguements against the conventional “property ladder” wisdom, you’re doing yourself a disservice by allowing such poorly thought out arguements as the referenced article to be associated with your arguements. It’s sloppy and lazy analysis and is so easily destroyed by the counter arguements that it could ruin your whole case.

The ladder concept favours the following groups of people as far as I can tell.

The government who collects stamp duty
Estate agents who collect commission
Mortgage brokers who collect bank commission on associated mortgage switches
Solicitors who collect conveyancy fees
I can’t see how the following parties benefit from the ladder concept. Please enlighten me.
Buyers
Sellers
Banks

The more rungs on the ladder, the more the members of the first group make. The reason the ladder concept is not dismissed as irresponsible advertising, is that the goverment is the biggest winner.

Buyers: Doesn’t help at all
Sellers: Makes them fell rich.
Banks: Sell on the debt to the international markets so don’t carry that much risk yet still make a monthly income from it.

what a great reply … however im not sure it will convince many of the doom sayers on here … to get these guys on side you must repeat your point 3 times in short sound bites like in the article “there is no ladder” , “there is no ladder” etc :laughing:

And how many are true now?

The only reason to get on the ‘ladder’ aka pyramid is if you think there will be a greater fool getting on afterwards - the simple fact is ireland has ran out of well financed fools.

Especially if it gets another fool to buy eh?

The point that article is making is that as property prices rise the rungs of the ladder become more widely spaced meaning you need more money to get to the next rung.
As property prices drop the rungs get closer and you need less money to trade up.
Presuming your salary stays the same the percentage or multiple of your income needed to move up the ladder becomes less in a falling market, making the proceedure more affordable.
The article illustrates that if the average home owner(non investor) can get their head around the idea that equity build up is irrelevant,then most people who need a property as a roof over their head (and that is most people!)would actually welcome falling property prices.

In the “article” at the top , it shows that the people on the ladder made 100,000 … only on a website like this would some contributor laugh and point at these people hinting they are gullible fools!! its kinda funny , and i am glad there are people who are afraid to make money out of property … cos it leaves more for me :slight_smile:

looks like someone didn’t read the whole article. If anything the article states getting the property you want as early as you can get it.

where is the 100,00 they made? do they have access to this 100,00 to spend as they please? can they sell off part of their proerty to cash in on the 100,000.

In a falling housing arket, people aren’t as reluctant to borrow against the ever falling value of their properties.

Ladders can exist.

The article makes the point that all properties rise equally. This may not be the case, young couples, if they get into a location early enough it’s developlment, can have an advantage later on in life. Remember when Tallaght was out in the boonies, and the bypass was exactly that?

Time is a factor aswell as location. Unfortunately Ireland has indeed seen mass price inflation (all rising with the tide) but some will do well due to canny or savvy location selection. :slight_smile:

Imagine if the couple were able to move to a 3-bed in a settled area with slower growth, then sure as shite, they could “trade-up” But, that only happens in “normal” property markets, bomms are a bitch and people are mad with what they find acceptable in terms of commuting / location / the type of home they will live in.

Buyers have been the suckers since day one. buying for the sake of buying, shoe boxes 60 miles from work? get a grip…

Pain