# Stamp Duty and the election



## Firefly (13 Apr 2007)

I don't want to break the rules about discussing house prices, but I do have a specific Q on Stamp Duty (assuming all esle stays the same eg interest rates, general economy etc etc)

....It is reported that people are putting off buying until the election is over as they think SD may be changed......I see 2 outcomes....

1. SD is abolished. This will have the effect of people having more borrowing power.

2. SD is maintained, which will have the effect of people who are currently holding off buying rushing back into the market.

Both of these will untimately lead to higher prices, so based on that is now a good time to buy?


Firefly.


----------



## beattie (13 Apr 2007)

Firefly said:


> I don't want to break the rules about discussing house prices, but I do have a specific Q on Stamp Duty (assuming all esle stays the same eg interest rates, general economy etc etc)
> 
> ....It is reported that people are putting off buying until the election is over as they think SD may be changed......I see 2 outcomes....
> 
> ...


 
What about the notion that the SD debate could be propping up the market? If there is a vendor who can't sell their house at the moment (and who won't drop their price) as they are convinced that once the election is over (and some clarity applied) people who had been holding off will rush in, finds out that there is still no purchaser it is highly likely that they will have to drop the price (and probably by a substantial amount)


----------



## ClubMan (13 Apr 2007)

Wasn't the whole issue of _SD _abolition or restructuring covered in the run up to Budget 2007?


----------



## Canonball (13 Apr 2007)

Firefly,

Guess we have to go along with the "other things being equal" "what if" scenario to obey the rules, even if it makes the debate completely academic.   

Re premise 1, I cant remember any party who have proposed that SD be abolished and if it were i'm not sure that anyone would have more "borrowing power". Depending on general market conditions (going along with the "other things being equal" line), prices would range along a continuum of staying the same or falling to an amount equal to the reduction in SD for any given property...so, in this completely academic scenario, why would you buy now?    

Re premise 2, if people have been indeed holding off buying due to the uncertainty over SD, and the present SD regime is maintained post-election, they may not "rush back" to buy because in the 9 months or so from when SD reform was first mooted by a Government Minister to the publication of a Programme for Government, the psychology might have changed from a "I must buy to get on the ladder or i'll be a loser all my life" to "I've holded off this long and things have got better, so why not wait and see some more". Even assuming that meaureable things like interest rates etc have remained equal (which, of course, they havent and may continue to change) sentiment could have shifted leading people to question if now is in fact not a good time to wait and see. I do believe that the only reliable measure of consumer sentiment (Austin Hughes?) is showing a marked decline in recent months.    

Canonball


----------



## Firefly (13 Apr 2007)

I think there may well be a growing number of people who will hold off awile longer and wait and see, but I also think that there could be a backlog of people who want to buy, for whatever reason.

I agree Clubman that it was covered up to the 2007 budget, but I'm hearing it at the reason why prices have stalled in recent months...

I supopse if you're interested in buying in the next few months you could play it cute and go sale agreed during the election and see what if anything happens


----------



## beattie (13 Apr 2007)

Firefly said:


> I supopse if you're interested in buying in the next few months you could play it cute and go sale agreed during the election and see what if anything happens


 
Won't you have to wait until after the budget in Dec before any changes are fully announced? If that is the case you will have to string out the buyer for an incredibly long time


----------



## Duplex (13 Apr 2007)

If you could get a fixed rate mortgage in principle now (before the ECB speaketh again) and can wait until the budget and are a first time buyer looking for a second hand property under €400,000, its good news.


----------



## room305 (13 Apr 2007)

If there is a rush of buyers after the election - no matter how the SD thing plays out, many will find they no longer qualify for the mortgages they once did. A combination of tightening lending standards and increased interest rates.


----------



## whathome (13 Apr 2007)

Firefly said:


> Both of these will untimately lead to higher prices, so based on that is now a good time to buy?


 
How is this not a house price discussion?

Both of your outcomes are highly unlikely. Now is definitely *not* a good time to buy, it's impossible to explain why without starting the whole debate again.


----------



## Firefly (13 Apr 2007)

Whathome, in my opening line I stated I didn't intend this to be a discussion about house prices per se, rather asking what people's perception was re possible SD changes after the election (which won't happen IMO).

Firefly.


----------



## Remix (13 Apr 2007)

I would think the question is not so much "buyers" returning but if investors/speculators will return.

By all accounts these have been major drivers in the market.

The Irish economy is predicted to hit the brakes quite dramatically next year. Capital appreciation is uncomfortably close to the negative (if not there already) and borrowing costs are rising.

I suspect banks and estate agents will have to send David Attenborough on a quest to track down new sources of this once widespread species.


----------



## beattie (13 Apr 2007)

Remix said:


> I suspect banks and estate agents will have to send David Attenborough on a quest to track down new sources of this once widespread species.


----------

