New Government scheme to help first time buyers - Advice to avoid

Dr Debt;
Very inclined to disagree with your 5 elements in that they are of a pure Market economic not a Social Economic model.
1.From what I gather there is enough zoned land to proceed.
2. Compulsory purchase orders at a fair price (public good)
3. I am talking of Government/Co Co builds, by all means use private developers to complete houses...
4. I am not talking just of buyers , but more renters ie Co Co types, so as to ensure there is a quality housing stock somewhat shielded from the vagaries of dis credited market.
It frightens me you say {THe only way out of this is higher prices and greater liquidity}

Please Think of Housing as more a Social Issue rather than as an economic issue.
If citizens end up paying higher and higher prices we re-end up in another vicious and unvirtuous circle .
eg Mortgage 20 years @ 5% on 200,000 = mthly 1,320 .
but if higher priced at say 300,00= mthly 1980.
the Difference ................................= mthly 660.

Surely that long term mthly xtra of 660 would be better kept within and spent in Ireland.
Surely that 660 less per mth would reduce wage pressures.

Putting prices up to the artificial prices I see in Dublin is YET again perverse economics that has put us into this mess.

Social funding for houses will create a virtuous circle.

Comments please.
 
Gerry, I dont mind if you dream all day along about socio-economic housing models.

Do you have any particular government or taxpayer demographic, in mind to fund this model.
I'm referring obviously to a government that is not already bankrupted and a taxpayer base with plenty of loose change.
 
44brendan said:
We cannot countenance a situation where the housing supply is deliberately maintained at a trickle in order to drive up prices. Where are the Government spokespeople on this issue?
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You what? Surely that's exactly government policy. Did you not notice Minister Noonan saying just the other day that we need higher prices? He later back-pedalled when he realised that government policy is to speak out of both sides of its mouth on this issue. The government of the day put all its eggs in the basket of price "recovery" when it established NAMA. It was not any kind of secret -- the minister argued publically that to break even we "only" needed a price rise of 10% over ten years from 2009 prices (a base from which prices actually fell 30 - 40%).

The current government, in spite of election manifesto promises, have fully embraced the policies of its predecessor. House price increases are good -- they increase the solvency of the banks and improve the position of those in negative equity. They spell disaster for the next generation of buyers, but hey, that's the policy we've bought into. Look at it this way: our minister of finance is 71 on Wednesday. He's not "the next generation of buyers", nor are the cabinet or most of his Dáil colleagues.
 
dub_nerd said:
Surely that's exactly government policy. Did you not notice Minister Noonan saying just the other day that we need higher prices? .
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He most definitely said that so it is government policy. This new scheme would help to ramp prices up even further.

Enda was on again yesterday about how housing people is a priority, they have totally lost the plot. He mentioned that this issue had been going on for years, yet they did nothing about it. And now he's going to sort it.

Well it's too late, what do the people in the Dept of Environment, Planning, Finance and Housing do all day. They have the figures, the ever increasing rents, the ever increasing list of people requiring housing, the number of people being put in emergency accommodation, the lack of house building, you add all that up and they are 'surprised' at a crisis.

What I cannot figure out is in Dublin does Nama hold lots of apartments or not. Every so often there is a hint of them helping with social housing but it never seems to happen.

I wonder too are investors staying out of the market because the costs are so skewed against landlords that it's hard to entice them.
 
Delboy said:
Where is the evidence of 'investors staying out of the market'?
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I've no actual evidence, I just crunch the numbers, factor in how hard it is to get a mortgage, the high rate for investors and figured out it isn't worth it in a lot of cases. Not for the return. A great poster on here did the numbers recently, cannot remember his name right now. If I recall correctly the only thing that made sense were one or two beds in Dublin.
 
Dr.Debt said:
Gerry, I dont mind if you dream all day along about socio-economic housing models.

Do you have any particular government or taxpayer demographic, in mind to fund this model.
I'm referring obviously to a government that is not already bankrupted and a taxpayer base with plenty of loose change.
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Dr Debt;

Had ongoing governments maintained a reasonable social housing build it would have had the effect of dampening prices on normal houses.
The Huge Cost to us all of Rent Supplements would have been productively applied in getting stock , not an ongoing drag on (taxpayer demographic).
To leave Houses to the Market will mean regular boom/bust cycles and too much grief and homelessness.
{particular government or taxpayer demographic}
I would think we are already paying dearly from ill thought out policies.
Unless we break this circle we are re-storing similar problems.

Maybe I do {dream} a bit , but this time it is a pragmatic dream !
Regards, Gerry.
 
Gerry there's no monopoly on good ideas on this website.I'm not saying that there is anything wrong with your suggestions. The only problem and it is a BIG problem, is where does the lolly come from.

If you have some ideas of how this might work, please share
 
Dr.Debt said:
Gerry there's no monopoly on good ideas on this website.I'm not saying that there is anything wrong with your suggestions. The only problem and it is a BIG problem, is where does the lolly come from.

If you have some ideas of how this might work, please share
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The cost of homelessness type issues continues to rise , so unless we sort housing , the lolly we are using up today to plug the dykes will only become a larger cost to us all.I DO NOT see any alternative but to FIND the lolly.

Maybe;
1. Give Vat breaks on new builds? ie give some/all Vat back to purchaser.
2. Give developers a guaranteed price on certain developments eg in Dublin.. That would let lenders have comfort giving them loans.
3. Ensure the guaranteed price CANNOT be gazumped.
4. Ongoing , Government ensure there is ALWAYS such a supply of social type housing that normal houses stay within a reasoable bracket..

Dr Debt;
I suppose what I see is that we DO NOT have any option but to sort this .
From here in Donegal it is amazing to see Henhouses in Dublin going for k300!.

I do not know enough about housing , but would reckon Government have sufficient skill and funds and knowledge to sort this.
eg only took ex -Government one evening to land us with a 65 Billion Bill!
 
Do we have a conflict in Government strategy/expectations on this issue? i.e.
(1) there is a shortgage of housing In Dublin and to a lesser extent Cork/Galway. This is driving up prices. At the current rate of price increases there is a very real fear that a bubble will re-emerge in the Dublin market. This will benefit some in negative equity who want to or need to sell. However, it will also exclude many potential buyers from the market (particularly FTB's). Pressure on prices will knock on to pressure on rents.
(2) The social impact of insufficient accomodation (corporation housing etc) has driven up homeless figures to an unprecidented level. Proposed solution appears to be a stop gap measure of using empty garda barracks, NAMA hotels/other "suitable" buildings as temporary shelters. No indication from the Governmant of any lmedium term solution to this problem. Such as providing "capital funds" to build new social housing or repair those that are currently uninhabitable.
Fr Peter McVerry stated in a radio interview that a figure of 150mln would solve the problem. He didn't expand on where this figure came from. It may have been top of the head. However, these would be capital rather than expenditure funds and the housing would be a long term rather than short term solution.
Banks would provide funds to private contractors to assist with these builds as the sales to Government are guaranteed and risk would far lower than private builds. This could provide contractors with the seed money to get back into private schemes.
 
Gerry Canning said:
There is no quick fix, but some suggestions.Most are gleaned from contributors.

1. Force; by penal rates that Building Land owners use it, or lose it or get heavily taxed
2. Instigate an immediate Co Co building programme of X units per Co Co.
That would employ some of our well-skilled builders, we need housing so it is a win win.
3. Once good housing comes on board that will have the effect of dampening the price of standard houses.
3a. It also means house prices will not rise , it also means that with lower house costs families are not squeeezed for years with high mortgage repayment.
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This all makes perfect sense, except for one tiny detail: the vested interests with political clout who will ensure it will not happen.

It is in too many people's interests to go down the alternative route of higher prices all round, despite the evidence of where this leads us all to.
 
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