# "Let's demolish the four great myths of housing"- Conor Skehan



## Brendan Burgess (25 May 2021)

A thought-provoking article here 









						Think you can handle the truth? Let’s demolish the four great myths of housing
					

Many myths and unrealistic expectations have arisen around housing and accommodation that need to be examined because these are the real drivers of affordability.




					www.independent.ie
				




_1) The First Time Buyer
The First-Time Buyer’ is a myth that needs to be put into perspective as the ultimate tiny tail that is wagging a very big dog. There are about two million houses and apartments in Ireland. Out of about 24,000 annual house purchases, only around 6,000 are first-time buyers.

This means that national policy is driven by the needs of one third of one percent of all homeowners, and one quarter of annual sales.

2) Generation Rent
‘Generation Rent’ is a myth-making trope that is used to persuade people that they are victims. Through boom and bust, for over 50 years Irish people have been increasingly choosing to rent rather than to buy. Today 30pc of us rent — a sign that Ireland is maturing to align with the European norm in advanced economies.

3) Rent is Dead Money
"
Dead Money’ is another phrase that is used to create a myth of victimhood among renters. It implies that rent money only serves immediate needs, unlike a mortgage repayment that is a form or saving or investment.

This is the equivalent of saying that food money is a waste because you’ll be hungry again tomorrow — so buy a cow, a chicken, an orchard instead.

4) The Housing Crisis
‘The Housing Crisis’ is the greatest myth of all. Readers are invited to google the words ‘Housing Crisis’ followed by a country of their choice. For starters, try Australia, Canada, New Zealand, Israel, Norway, France and the Netherlands.

Your research will tell you that there is hardly a country in the world that does not have headlines about rising rents and house prices, lack of supply, affordability, homelessness, price inflation — to name but a few ills.
...
We have more than 200,000 vacant homes across Ireland. When we encourage or allow the Government to support new-build housing instead of refurbishing then we are choosing to move away from availability and affordability._


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## Brendan Burgess (25 May 2021)

And he must have been reading Purple's posts: 

_As a nation we have to accept that a big driver of housing cost has been the much-needed and absolutely justifiable regulatory issues around safety, energy and sustainability. This happened in the car industry too, but that sector managed to continually produce better cars for increasingly less cost by ‘value engineering’ and by using increasingly sophisticated production techniques.

By contrast, the housing sector still largely uses late 19th century ‘hand-made’ techniques. The sector needs to choose to move onto a next generation of increasingly ‘factory-finished’ large building components, to drive down the costs of elements like kitchens, bathrooms, stairs, as well as electrical and plumbing cores._


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## Brendan Burgess (25 May 2021)

What we need is affordable housing. Whether it is affordable rent or affordable purchases with affordable mortgages. 

If we had affordable rents but unaffordable purchases, it wouldn't be that serious.

But we seem to have both unaffordable rents and unaffordable purchases.

So it is a housing crisis. 

The fact that most cities have them doesn't mean that they are not crises.

Brendan


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## Thirsty (25 May 2021)

> _ Rent is Dead Money
> "
> Dead Money’ is another phrase that is used to create a myth of victimhood among renters. It implies that rent money only serves immediate needs, unlike a mortgage repayment that is a form or saving or investment.
> 
> This is the equivalent of saying that food money is a waste because you’ll be hungry again tomorrow — so buy a cow, a chicken, an orchard instead._


This is a silly analogy; we purchase food because the opportunity cost of subsistence farming is far higher than buying it from a supermarket. 

The issue, to my mind, of renting vs. purchase is much simpler.

a. Rent will most likely remain a fixed percentage of your income.  

If you are paying 30% of your monthly income in rent today, in 10 years time, you will still be paying 30% of your monthly income; whereas a mortgage, as a % of your income will be less in 10 years.

b. With the exception of social housing, you have no real security of tenure when renting; whereas no one can put you out of your home.


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## Brendan Burgess (25 May 2021)

The "rent is dead money" is the one I most agree with Conor  Skehan on.

It is the most stupid phrase in the whole housing debate. 

I am a great believer in home ownership. 

But if someone chooses to rent a property instead of renting money, that is a perfectly valid choice. 

There is nothing to stop someone renting their home and instead of repaying the capital on their mortgage, they invest it in equities. 

It is hard to explain this to people.  Maybe renting a car vs. buying one would be a better analogy? 

A lot of people who bought at the top of market felt that their full mortgage payment , interest and capital, was dead money. 

Brendan


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## Thirsty (25 May 2021)

Brendan Burgess said:


> renting a car vs. buying one


I'd still say the same; Hertz won't look for you to return the rented car because they want to sell it, or give it to their grand-child etc.


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## WolfeTone (25 May 2021)

1) This is silly. Because most people have a home (99.66%) then policy should not be concentrated on the 1/3 of 1% who are trying to get a home??
Who should housing policy be directed at? Me? I have a home.

2) This notion that we are 'maturing' is codology. If rental prices were to drop on average 50%, a lot more people would rent and we could surpass European averages in this area. Irish population's slow adoption of European averages is testament to the extortionate high levels of rent for substandard accommodation. People try to resist renting on a prolonged period because of how high rents are. Higher levels of immigration over the last two decade have also coincided with higher uptake of rents.

3) This is silly again. Paying rent provides a service of necessity in the form of accommodation. But if it is costing more in the long run than the cost of repaying a mortgage then it is dead money. If it is cheaper to obtain a mortgage and repay then that is the obviously more financially beneficial option. If, due to a persons circumstances it is not feasible to take out a mortgage than that is a different matter. Then is it obviously not 'dead' money as it provides a function of necessity not otherwise available.

The analogy to food is simply stupid.

4) The 'Housing Crisis' is the biggest myth of all, followed by advice to google 'housing crisis' and have it confirmed that many developed countries in the world are indeed experiencing a housing crisis!

Sorry, but Skehan is off his rocker.


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## Ceist Beag (25 May 2021)

Brendan Burgess said:


> _1) The First Time Buyer
> The First-Time Buyer’ is a myth that needs to be put into perspective as the ultimate tiny tail that is wagging a very big dog. There are about two million houses and apartments in Ireland. Out of about 24,000 annual house purchases, only around 6,000 are first-time buyers.
> 
> This means that national policy is driven by the needs of one third of one percent of all homeowners, and one quarter of annual sales._


With all due respect that's a pretty ridiculous argument. By his own numbers first time buyers are 25% of the relevant target group here. Not 0.33% - he's just trying to rearrange numbers to suit his own view. As WolfeTone said, the target group of the policy are those in need of housing.



Brendan Burgess said:


> _2) Generation Rent
> ‘Generation Rent’ is a myth-making trope that is used to persuade people that they are victims. Through boom and bust, for over 50 years Irish people have been increasingly choosing to rent rather than to buy. Today 30pc of us rent — a sign that Ireland is maturing to align with the European norm in advanced economies._


I'm not sure what point he is trying to make here. Ultimately, if renters had the same certainty as those with mortgages, in that the rent only increases in line with the ECB rates for example, this would remove some of the uncertainty. The government RPZ were supposed to achieve that but judging by the DAFT annual reports they are a long way from doing so. Who is at fault there - are landlords simply ignoring the guidelines or are they not being enforced? Either way, renters are indeed the victims of this.

I would agree that the whole Rent is Dead Money argument is a false one but his analogy is silly.


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## DazedInPontoon (25 May 2021)

Brendan Burgess said:


> The "rent is dead money" is the one I most agree with Conor Skehan on.
> 
> It is the most stupid phrase in the whole housing debate.
> 
> ...



I would generally agree with you, but we have a medium term situation where monthly rent in many places is greatly exceeding the combined cost of mortgage principal payment + interest (maybe prices have risen to the extent that this is not true for recent purchases? - not sure).



Brendan Burgess said:


> There is nothing to stop someone renting their home and instead of repaying the capital on their mortgage, they invest it in equities.


Right, but instead the position Joe Renter finds himself in is:  "I am paying 2000 a month to rent this house. My neighbour is paying 1300 in mortgage payments for a similar house" and it's the neighbour who has the spare cash at the end of the month to invest in equities, while also building equity in the house.

And you might say to Joe, well if it's so good for your neighbour, why don't you also buy and pay only 1300, and he'll say to you that he'd love to but he doesn't qualify for a mortgage.


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## Brendan Burgess (25 May 2021)

WolfeTone said:


> But if it is costing more in the long run than the cost of repaying a mortgage then it is dead money.



This just shows you how much work Conor Skehan has to do in challenging the myths. 

How can you say that any expenditure is dead money?   If you think that rent is dead money, so is almost all expenditure that is not investment. 

Brendan


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## Thirsty (25 May 2021)

> rent is dead money, so is almost all expenditure that is not investment



it's a matter of making choices

Choose between the following:

living with your parents vs.  sleeping in a tent

house share vs. living with your parents

house share vs renting own apartment/house

renting own apartment/house vs. paying mortgage on own apartment / house

By and large, most choices would be parents->house share->rent home -> buy home.

Paying rent give you a benefit in terms of a roof over your head - but over the long term paying a mortgage is better value.

Burning candles or cooking over a fire will also give you light & heat but purchasing gas/ esb is more cost-effective.

Out of curiosity - I wonder does the author of this article rent or pay a mortgage?  and any other posters here cheerfully advocating the rental option - do you own your own home or do you rent it?


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## seamus m (25 May 2021)

My biggest issue with houses is in country towns not just Dublin  our house sizes and standards particularly front and rear garden space  have fallen ,dog kennels packed together and let rush through planning to help ease so called crises  .


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## WolfeTone (25 May 2021)

Brendan Burgess said:


> How can you say that any expenditure is dead money? If you think that rent is dead money, so is almost all expenditure that is not investment.



The phrase is a metaphor. If you can acquire the same product, service, utility etc for a cheaper price, but instead opt to pay a higher price then the excess paid on the higher price is commonly referred to as 'dead money' ie money that you could have saved but will never see again. 
It is mostly related to rent considering the long-term costs of rent over a lifetime.


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## DazedInPontoon (25 May 2021)

The argument is that the payment of a mortgage principle isn't an expenditure because it's building equity in a property. The interest on the other hand I would consider as much dead money as rent is.


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## Thirsty (25 May 2021)

> The interest on the other hand I would consider as much dead money as rent is


but interest will decrease over time, whereas rent never will.


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## Brendan Burgess (25 May 2021)

DazedInPontoon said:


> The argument is that the payment of a mortgage principle isn't an expenditure because it's building equity in a property.



Correct. 



DazedInPontoon said:


> The interest on the other hand I would consider as much dead money as rent is.



Incorrect. 

Paying for use of something is not dead money.   

It's a meaningless and entirely misleading phrase. 

I will repeat : I am a big advocate of home ownership. 

But renting should not be denigrated. 

If I choose to pay €3,000 a month for an apartment in Dublin City Centre and you choose to pay €1,000 to rent in Leixlip and you commute for two hours a day while I walk to work. Is my extra €2,000 dead money? Of course it's not. 

It's a choice I make.

Brendan


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## DazedInPontoon (25 May 2021)

I'm basically agreeing with you regarding the 'dead money' thing. Both interest and rent are paying for a service, so each is as much dead money as the other - in that you can consider that neither is dead money, but it is money that you have *spent*.


Brendan Burgess said:


> If I choose to pay €3,000 a month for an apartment in Dublin City Centre and you choose to pay €1,000 to rent in Leixlip and you commute for two hours a day while I walk to work. Is my extra €2,000 dead money? Of course it's not.
> 
> It's a choice I make.


Won't argue with that either. But is that example of much relevance to the housing crisis, I don't think people being left with no option but to commute 2 hours a day is very good for society.


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## WolfeTone (25 May 2021)

Brendan Burgess said:


> Paying for use of something is not dead money



True. But if to acquire the same use by other means (ie a mortgage) and the cost of repaying that mortgage is cheaper over the long term then the rent is dead money. 
It depends how you define 'dead money'. I define it simply as the excess paid over what it would cost if availing of the alternative option (mortgage) to acquire the same utility.


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## WolfeTone (25 May 2021)

Brendan Burgess said:


> If I choose to pay €3,000 a month for an apartment in Dublin City Centre and you choose to pay €1,000 to rent in Leixlip and you commute for two hours a day while I walk to work.



The comparison is not valid because your are comparing rent cost with another rental cost. The 'dead money' term is typically a comparison between mortgage costs and rent. 

All things remaining equal, a €3000 rent per month for the term of 25yrs is €900,000. 
What is the value of the property and how much would a 25yr 100% mortgage cost?


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## Brendan Burgess (25 May 2021)

WolfeTone said:


> It depends how you define 'dead money'.



That is such a ridiculous approach.

If you define something as meaning something completely different from what the two words mean, then language and discussion is pointless. 

If someone calls to the door to fix my roof and I pay them a deposit of €3,000 and never see them again, that is dead money. I get nothing for it.  The money is gone.

If I pay someone €3,000 to fix my roof and they do a good job, that is not dead  money. 

If I pay a landlord for the use of a premises, I am getting value.

Brendan


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## DazedInPontoon (25 May 2021)

The general context I've heard people using the phrase dead money is paying rent equivalent or in excess of what mortgage payments would be and considering that after x years they would have had the same outflow of cash, but no equity to show for it. Maybe using 'dead money' for this is a bad term, but I understand the idea they are trying to convey.


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## WolfeTone (25 May 2021)

Brendan Burgess said:


> If I pay someone €3,000 to fix my roof and they do a good job, that is not dead money.



If u pay someone €3,000 to fix your roof while there is an option to pay only €2,500. €500 is dead money. Certainly in my book anyway. But if you and CS want to argue otherwise, knock yourselves out.


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## Gordon Gekko (25 May 2021)

Whilst it’s not “dead money”, I can see the logic behind the term.

It really stems from the obvious fact that a mortgage repayment on a property tends to be similar to the monthly rent for the same property.


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## nest egg (25 May 2021)

DazedInPontoon said:


> The general context I've heard people using the phrase dead money is paying rent equivalent or in excess of what mortgage payments would be and considering that after x years they would have had the same outflow of cash, but no equity to show for it. Maybe using 'dead money' for this is a bad term, but I understand the idea they are trying to convey.


I agree that's the thinking. In the same breath though they tend to forget / be unaware that to come up with a mortgage figure equivalent to the rent they're paying, they'd have to put down a 10-20% deposit on the property, and then cover all the other outlays such as stamp duty, solicitor's fees, furniture / decoration, LPT, home insurance etc etc, and that's assuming there's nothing wrong with the place that needs to be put right.


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## Brendan Burgess (25 May 2021)

WolfeTone said:


> If u pay someone €3,000 to fix your roof while there is an option to pay only €2,500. €500 is dead money.



Now, you are beginning to get there. 

If you rent a property for €3,000 a month when the lease says €2,500 then €500 could be classified as dead money.

But to describe the €3,000 rent as dead money is just ridiculous.    I agree that it's a widely used term, but that does not make it any less ridiculous.

Brendan


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## DazedInPontoon (25 May 2021)

mojoask said:


> I agree that's the thinking. In the same breath though they tend to forget / be unaware that to come up with a mortgage figure equivalent to the rent they're paying, they'd have to put down a 10-20% deposit on the property, and then cover all the other outlays such as stamp duty, solicitor's fees, furniture / decoration, LPT, home insurance etc etc, and that's assuming there's nothing wrong with the place that needs to be put right.



Absolutely, comparing renting to buying is complex both in terms of considering all of the various costs and risks apart from the mortgage/rent that you must consider, and all of the various non-financial aspects that differ between being a tenant and being an owner in terms of freedoms and responsibilities, and this has always been true.

I think in terms of the housing crisis you're seeing new aspects though, have we historically had rents so proportionately high? are we building new supply at a slower rate in comparison to the rate of population increase? are people competing with institutional investors more than historically? I don't have the numbers so I don't know for sure, but anecdotally things seems different now for sure.


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## Brendan Burgess (25 May 2021)

mojoask said:


> that's assuming there's nothing wrong with the place that needs to be put right.



And assuming that house prices don't fall 50% after you buy the place and you find yourself in negative equity for years afterwards.


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## Thirsty (25 May 2021)

Brendan Burgess said:


> And assuming that house prices don't fall 50% after you buy the place and you find yourself in negative equity for years afterwards.



The same thing could happen with equities or pension funds.

But you still have a roof over your head.


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## joe sod (25 May 2021)

Brendan Burgess said:


> As a nation we have to accept that a big driver of housing cost has been the much-needed and absolutely justifiable regulatory issues around safety, energy and sustainability. This happened in the car industry too, but that sector managed to continually produce better cars for increasingly less cost by ‘value engineering’ and by using increasingly sophisticated production techniques.


But if you look at the housing that was built in the 70s and 80s when we were building lots of houses, they were much more basic and were easier to build . They had a stove , a fridge , one basic bathroom and a few sticks of furniture that was it. Also the safety standards for workers were non existent, there were no portaloos, builders used basic tools, a few ladders and a cement mixer, if a builder got injured there was no compo culture. Its no wonder we were able to build cheaply back then. Now with covid and social distancing , safety officers, there are alot more people employed on building sites that are not actually building. All of this adds alot to the cost.


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## Purple (26 May 2021)

WolfeTone said:


> The comparison is not valid because your are comparing rent cost with another rental cost. The 'dead money' term is typically a comparison between mortgage costs and rent.
> 
> All things remaining equal, a €3000 rent per month for the term of 25yrs is €900,000.
> What is the value of the property and how much would a 25yr 100% mortgage cost?


It is true to say that renting is far more uncertain and probably more costly in the medium to long term than home ownership but rent is not dead money. The problem with bad analogies and metaphors is that they lead to us asking the wrong questions, have the wrong discussions and fix the wrong problems. 

There is a housing affordability crisis in this country, and just about every other country in the developed world. That's a result of a shift in wealth from labour to capital. The longer term solution is shifting that wealth back towards labour (a 50:50 split works). We can't do that in Ireland, we can only mitigate the symptoms through taxation policy. Using our existing housing stock better would, to me, be the best solution.  Those 200,000 empty housing units are worth over €60 billion. If we could get 20% of them back into circulation that would be €12 billion worth and more homes than we can build in two good years.

How about grants for business owners to turn their empty upstairs rooms into flats and apartments and a guarantee that their rates will not be increased if they do the conversion?
How about real taxes on empty housing?
How about real taxes on vacant sites and a use it or lose it planning system?
How about the planning process being brought into the 21st century so that it doesn't take 6-8 years to develop a site? Failing that bring it into the 20th century.

How about a semi state company to which all non-building land which has been re-zoned for building  must be sold? It could then sell the land to developers at a much lower cost, with the proviso that the prices of the housing units built will reflect that lower land cost?

How about the department of the environment getting its act together so that new regulations can be put in place quickly for new construction methods?


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## Purple (26 May 2021)

joe sod said:


> But if you look at the housing that was built in the 70s and 80s when we were building lots of houses, they were much more basic and were easier to build . They had a stove , a fridge , one basic bathroom and a few sticks of furniture that was it. Also the safety standards for workers were non existent, there were no portaloos, builders used basic tools, a few ladders and a cement mixer, if a builder got injured there was no compo culture. Its no wonder we were able to build cheaply back then. Now with covid and social distancing , safety officers, there are alot more people employed on building sites that are not actually building. All of this adds alot to the cost.


Are you seriously suggesting that in the last 50 years construction methods haven't improved sufficiently to reduce the labour input way beyond the cost/labour input of monitoring health and safety etc?

If shipping in Ireland was done like construction we'd still be using sailing ships.


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## 50andOut (26 May 2021)

Id agree with his generation rent and rent is dead money points.

No one has mentioned the flexibility of renting - are many renters not short term due to personal choice? I expect that not everyone is looking to commit to 25+ years on the hook for repayments on a property that is a short term lifestyle choice/need.

In my 20's I rented in City Centre to be near the action, as I matured and had less need for the nightlife, I gradually moved further away in large because the price for living in the city centre was no longer worth it. Eventually once I was ready for a long term base I then looked to buy. Then traded up for the forever home once kids came along. Those early years were not dead money but a lifestyle choice, plus an education into budgeting.

Yes I have security owning the house, but its inflexible (unless you abscond from your partner and emigrate, but that's another thread) and it is also a money pit, the capital and interest payments are not the only elements to compare against renting. e.g. I need a new boiler put in, I need to pay, Renters - call the landlord and he needs to pay.

On retirement I will likely rent somewhere abroad instead of buying because A. Leper scared me off buying and B. it gives me the flexibility to stay as little or as long as required and change locations without the fees and upkeep headache.

50+O


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## joe sod (26 May 2021)

Purple said:


> Are you seriously suggesting that in the last 50 years construction methods haven't improved sufficiently to reduce the labour input way beyond the cost/labour input of monitoring health and safety etc?
> 
> If shipping in Ireland was done like construction we'd still be using sailing ships.


Yes the heavy labour element has been taken out of it by machines, but there are still a lot of bodies on construction sites or connected to it that were not there in the 70s and 80s. Think of covid compliance officers etc etc, also those Labour saving machines are expensive, it all adds to a lot more cost, then you have the new curve ball of shortage and rising cost of construction materials. 
You need cheap labour to build houses cheaply , we had that in 70s 80s, we had it to an extent during the boom with the huge bonus of skilled east European Labour , we no longer have that. Now the world is looking for this labour not just Ireland.


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## Purple (26 May 2021)

joe sod said:


> You need cheap labour to build houses cheaply


Germany and the USA are the most productive manufacturing economies in the world with the most productive workers because they don't have lots of cheap labour making things. Their businesses, especially their SME's, are far more capital intensive than ours. The efficient use of capital, more than the efficient use of labour, reduces costs. 

The last thing an efficient construction sector needs is lots of cheap labour. Anyone using a hand saw or hammer on a building site should be sacked. There should be no need for block or brick laying above the groundworks level. There should be no first fix on site. There should be no door hanging on site. There should be no roof tiling on site. The way we build houses is Dickensian. The entire sector is not fit for purpose and, speaking as an Irish Tradesperson, Irish Tradespeople are not at the races when compared to the European competition. Eastern European tradespeople are generally smarter, much better trained and have a vastly superior work ethic. 
Hopefully we'll eventually get to the stage where 80% of the construction of houses is done in factories, here or elsewhere, and 50% of the labour disappears.


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## PGF2016 (26 May 2021)

Purple said:


> Germany and the USA are the most productive manufacturing economies in the world with the most productive workers because they don't have lots of cheap labour making things. Their businesses, especially their SME's, are far more capital intensive than ours. The efficient use of capital, more than the efficient use of labour, reduces costs.
> 
> The last thing an efficient construction sector needs is lots of cheap labour. Anyone using a hand saw or hammer on a building site should be sacked. There should be no need for block or brick laying above the groundworks level. There should be no first fix on site. There should be no door hanging on site. There should be no roof tiling on site. The way we build houses is Dickensian. The entire sector is not fit for purpose and, speaking as an Irish Tradesperson, Irish Tradespeople are not at the races when compared to the European competition. Eastern European tradespeople are generally smarter, much better trained and have a vastly superior work ethic.
> Hopefully we'll eventually get to the stage where 80% of the construction of houses is done in factories, here or elsewhere, and 50% of the labour disappears.


Why are we behind the times on this? And is it the same in the UK?


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## Thirsty (26 May 2021)

50andOut said:


> will likely rent somewhere abroad instead of buying


But you will still own a PPR?


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## DublinHead54 (26 May 2021)

Brendan Burgess said:


> The "rent is dead money" is the one I most agree with Conor  Skehan on.
> 
> It is the most stupid phrase in the whole housing debate.
> 
> ...



The issue is that for many people they don't have a choice and have to rent. I think this rhetoric of 'rent is dead money' always comes up when rents are higher than the equivalent mortgage, which I think is the case for a lot of places in Dublin. The minutiae of the issue also comes down to as housing needs change for an individual the options do not adapt. 

For example, a 20-year-old wanting to rent an apartment close to the city centre has options (apartments, house shares etc), a 30 yr old married couple with a child may want / need a house but the rental options are far more limited.


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## joe sod (26 May 2021)

PGF2016 said:


> Why are we behind the times on this? And is it the same in the UK?


Exactly good question, are we that much different to UK, they are probably a lot better given that they are one of the most densely populated island on the planet ? 
Surely we should be doing a deep analysis of all our costs relative to UK at least, how much does it cost for developers to connect to services, how many tradesmen hours per house at what cost?, are our houses bigger with less units per acre? How many safety officer hours and Labour not involved in actual construction do we have relative to UK? Maybe get the esri to do some deep analysis like that, maybe they might uncover things they not want to find out. God knows some of the stuff the esri do is not very useful information or stuff still child would know anyways


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## WolfeTone (26 May 2021)

Purple said:


> How about grants for business owners to turn their empty upstairs rooms into flats and apartments and a guarantee that their rates will not be increased if they do the conversion?
> How about real taxes on empty housing?
> How about real taxes on vacant sites and a use it or lose it planning system?
> How about the planning process being brought into the 21st century so that it doesn't take 6-8 years to develop a site? Failing that bring it into the 20th century.
> ...



You are coming up with proposals to solve the housing crisis.

This topic is about the apparent 'myths' of housing by Conor Skehan.

I would say you have demolished that article from the Irish Independent in the OP.


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## Purple (26 May 2021)

PGF2016 said:


> Why are we behind the times on this? And is it the same in the UK?


We are in a closed market, not open to international competition. The UK is a larger closed market. On the mainland you can buy a house in one country and have it assembled in another. That means local construction prices have to be more competitive and of a good quality. Of course construction costs are only part of the overall price of delivering housing.


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## PGF2016 (26 May 2021)

joe sod said:


> Surely we should be doing a deep analysis of all our costs relative to UK at least, how much does it cost for developers to connect to services, how many tradesmen hours per house at what cost?


From reading @Purple's comments comparing against the UK is pointless. If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.


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## Banquo (26 May 2021)

Thirsty said:


> This is a silly analogy; we purchase food because the opportunity cost of subsistence farming is far higher than buying it from a supermarket.
> 
> The issue, to my mind, of renting vs. purchase is much simpler.
> 
> ...


Rent has risen 50%+ in 10 years but salaries have not.


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## joe sod (27 May 2021)

PGF2016 said:


> From reading @Purple's comments comparing against the UK is pointless. If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.


Yes @Purple might have some good ideas as regards streamlining and factory construction of components but they are still not widespread anywhere.  The UK has a very large manufacturing and assembly line production system , so surely they would not be slow in coming up with manufacturing system for construction. In Spain and Portugal I noticed that their construction techniques are even more labour intensive than here, narrow streets, tall buildings, so you cant fit in big equipment, anecdotally they are employing cheap migrant labour from North africa to do this. If you are going to preserve historic buildings and street scapes it requires alot of labour.


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## Purple (27 May 2021)

joe sod said:


> Yes @Purple might have some good ideas as regards streamlining and factory construction of components but they are still not widespread anywhere.  The UK has a very large manufacturing and assembly line production system , so surely they would not be slow in coming up with manufacturing system for construction. In Spain and Portugal I noticed that their construction techniques are even more labour intensive than here, narrow streets, tall buildings, so you cant fit in big equipment, anecdotally they are employing cheap migrant labour from North africa to do this. If you are going to preserve historic buildings and street scapes it requires alot of labour.


Absolutely, in-fill housing and refurbishment will always require labour intensive methods.
I passes a new build every day for 18 months on my way to work. Each unit on the terraced rows has a brick built bin enclosure outside the front door. There were close to 100 units. Each bin enclosure was hand built using methods which have been around for around 3000 years. They could have been made from concrete with a brick finish shell. It would have been cheaper and faster. The roofs were constructed on site. It was craft construction instead of mass production. Craft construction is slower, more expensive and lower quality.


----------



## joe sod (27 May 2021)

Purple said:


> They could have been made from concrete with a brick finish shell. It would have been cheaper and faster. The roofs were constructed on site. It was craft construction instead of mass production. Craft construction is slower, more expensive and lower quality.


Good points, but doesn't our popular culture promote craft construction, the whole "room to improve" Dermot bannon phenomenon ? Perfectly good houses are gutted for "bespoke" "contemporary" solutions, I know it's a tv show but it has consequences, a lot of skilled labour tied up in these projects even though the original house was perfectly ok and just needed some upgrades.


----------



## Purple (27 May 2021)

joe sod said:


> Good points, but doesn't our popular culture promote craft construction, the whole "room to improve" Dermot bannon phenomenon ? Perfectly good houses are gutted for "bespoke" "contemporary" solutions, I know it's a tv show but it has consequences, a lot of skilled labour tied up in these projects even though the original house was perfectly ok and just needed some upgrades.


That's fine if we've removed skilled labour from the initial construction phase.
Toyota don't build cars the way specialists do in bespoke one-off builds but we use the same manufacturing process to build high volume estates as one-off houses. Imagine how much a car would cost if was built that way?


----------



## cremeegg (27 May 2021)

Rent is dead money

Buy a house for €200,000 pay €400 a month interest

Rent the same house for €1,200 a month.

The utility is almost exactly the same, i.e you get  to live in the house.

The difference €800 a month is dead money. 

Now if you could rent for less than the interest cost of the loan, then the money paid in rent would not be dead money.


----------



## Brian C (28 May 2021)

Good luck with finding a house for €200,000. Also why would one person rent a house? It is more likely that you would share it with 2 or 3 others. Then suddenly the rent isn't so punitive. From direct experience a significant number of rental units are shared but all we hear about is the headline rent, not the per head amount. Ultimately arguing about rent being "dead money" is pointless, the sort of debate that goes on in a pub all night.

On a separate point I see that the 200,000 vacant units debate is back on. A few years back this figure was apparently 180,000 odd. If memory serves me right it came from census data that if a census caller to a house didn't receive an answer the house was marked as vacant. When looked into no one could verify this "vacant" number as real. In fact I remember that a council official in North Dublin commented that in his (large) area there were very few units vacant. Accordingly if Dublin doesn't have tens of thousands of units vacant then how could 200,000 arise?  I accept that there is probably thousands of properties vacant but nothing remotely close to 200,000. It is a convenient figure for opposition parties to bleat on about. The probability is that a significant number of them are peoples holiday homes, peoples private property, no business of anyone else.


----------



## Purple (28 May 2021)

Brian C said:


> The probability is that a significant number of them are peoples holiday homes, peoples private property, no business of anyone else.


I'd say that they are nearly all private property but that doesn't mean they aren't the business of the public at large. Drive around urban Dublin and take a look at the areas over shops and see how many could be used for accommodation. Of course if the owner goes to the considerable expense of refurbishing them and renting them they'll be hit for a large increase in their Rates and have a massive increase in their insurance.


----------



## Allpartied (28 May 2021)

Thirsty said:


> If you are paying 30% of your monthly income in rent today, in 10 years time, you will still be paying 30% of your monthly income; whereas a mortgage, as a % of your income will be less in 10 years.
> 
> b. With the exception of social housing, you have no real security of tenure when renting; whereas no one can put you out of your home.


This is not true. Many people who bought houses in 2003, 04, 05, 06, 07 are actually paying a higher percentage of net income now, 15 years later, than when they purchased the property.  

Buying  a property since the boom and massive bust comes with a big warning sign. Your property price can plummet  or wages can plummet and your tax bill can go up.


----------



## NoRegretsCoyote (28 May 2021)

Allpartied said:


> Many people who bought houses in 2003, 04, 05, 06, 07 are actually paying a higher percentage of net income now, 15 years later, than when they purchased the property.


Not true on average given the prevalence of trackers at the time.


----------



## Purple (28 May 2021)

Allpartied said:


> This is not true. Many people who bought houses in 2003, 04, 05, 06, 07 are actually paying a higher percentage of net income now, 15 years later, than when they purchased the property.
> 
> Buying  a property since the boom and massive bust comes with a big warning sign. Your property price can plummet  or wages can plummet and your tax bill can go up.


That's the crux of the problem; there's been no real wage inflation in the last 20 years but property price inflation has been massive. That has resulted in a wealth being concentrated in capital rather than labour but it's a global problem caused by the opening up of the labour market in South  East Asia from the late 1980's.


----------



## Purple (28 May 2021)

NoRegretsCoyote said:


> Not true on average given the prevalence of trackers at the time.


Lots of people weren't on trackers. I still am, thankfully.


----------



## NoRegretsCoyote (28 May 2021)

Purple said:


> Lots of people weren't on trackers.


That's why I said "on average".

Look at Figure 1 here.

By 2015 the majority of mortgages originating in 2005-07 were on a tracker, with a substantial minority for 2003 and 2004 too.



Purple said:


> there's been no real wage inflation in the last 20 years


That's just nonsense. The CSO's long series shows an increase in real wages 2001 to 2015 of about 1% a year. It's gone up since again.


----------



## Purple (28 May 2021)

NoRegretsCoyote said:


> That's why I said "on average".
> 
> Look at Figure 1 here.
> 
> By 2015 the majority of mortgages originating in 2005-07 were on a tracker, with a substantial minority for 2003 and 2004 too.


Fair enough. 
House prices now are nearly as high at the peak of the boom and money is significantly more expensive. It is harder now for an average working person without equity to buy a house now than it was 20 years ago.



NoRegretsCoyote said:


> That's just nonsense. The CSO's long series shows an increase in real wages 2001 to 2015 of about 1% a year. It's gone up since again.


It's also true to say that real earnings growth are lower now that at any time since the CSO started keeping records in the 1940's (fig.1.2 in your link).
When I say no real wage inflation I means that there was none worth talking about. It's half what it was a decade ago and a third of what it was in the 1990's. Therefore it's true to say that real wage growth is reducing a  very significant rate.


----------



## The Horseman (28 May 2021)

Purple said:


> That's fine if we've removed skilled labour from the initial construction phase.
> Toyota don't build cars the way specialists do in bespoke one-off builds but we use the same manufacturing process to build high volume estates as one-off houses. Imagine how much a car would cost if was built that way?


But we don't have large scale building of housing estates to benefit from the economies of scale that Toyota do. The building of a car is different to that of a property. 

Certainly if we built all houses exactly the same (the only difference being size ie two bed, three bed or four bed) then yes we could get economies of scale in some parts of the build process. But we don't as no builder is big enough to benefit to any large degree. 

if builders were removed from the process and people purchased directly from the manufacturer then they could decide their own fit out etc.


----------



## NoRegretsCoyote (28 May 2021)

Purple said:


> and money is significantly more expensive.



No it is not. In 2001 3-month euribor averaged about 4%.



Purple said:


> It's also true to say that real earnings *growth *are lower now that at any time since the CSO started keeping records in the 1940's


Well if you move the goalposts from levels to rates of change........

Even 1% wage growth means a doubling of living standards every 70 years. I think a doubling of living standards over a lifetime is very much worth talking about.


----------



## Purple (28 May 2021)

NoRegretsCoyote said:


> No it is not. In 2001 3-month euribor averaged about 4%.


How many people buy houses on the Eurobar rate?
My mortgage is at 0.78% above the ECB base rate. I don't think you'll find any lenders offering mortgages at that rate now.
I didn't know why you are referring to inter bank rates in the context of a discussion about the affordability of homes.  



NoRegretsCoyote said:


> Well if you move the goalposts from levels to rates of change........
> 
> Even 1% wage growth means a doubling of living standards every 70 years. I think a doubling of living standards over a lifetime is very much worth talking about.


The rate of increase since 2010 is around 0.6%. 

You seem to be arguing that living standards are increasing and home ownership is just as achievable for those starting out. If so the ESRI disagrees with you. 
In the past we'd be able to rely on emigration to take the pressure off the housing market in a time like this but that option is effectively closed at the moment.


----------



## NoRegretsCoyote (28 May 2021)

Purple said:


> I didn't know why you are referring to inter bank rates in the context of a discussion about the affordability of homes.


Because you said "money is significantly more expensive" than 20 years ago. It's not. Figure 7 here shows a mortgage interest rate of about 5% in 2001. It's more like 3% now.



Purple said:


> you seem to be arguing that living standards are increasing and home ownership is just as achievable for those starting out.


I am not arguing this.

I am just picking holes in your dubious claims.


----------



## Purple (28 May 2021)

NoRegretsCoyote said:


> Because you said "money is significantly more expensive" than 20 years ago. It's not. Figure 7 here shows a mortgage interest rate of about 5% in 2001. It's more like 3% now.
> 
> I am not arguing this.
> 
> I am just picking holes in your dubious claims.


So houses are relatively more expensive to fund now than they were 20 years ago, given that the average residential property price then was €175k and now it's €275k. Tracker mortgages were introduced in 2001 and by 2004 banks were offering rates of 0.95 above the ECB base rate or 2.95% in total and that reduced further as ECB rates dropped so yes, 20 years ago interest rates were higher than they are now but 17 years ago they weren't, and property is nearly 50% more expensive now than it was then.

Prices are around the same now as the height of the boom but interest rates are higher on most mortgages since the banks are no longer offering tracker rates.

Other than nit-picking I fail to see the point of your posts.


----------



## NoRegretsCoyote (28 May 2021)

Purple said:


> Prices are around the same now as the height of the boom


No, they are just not.

The CSO publishes statistics on this. Last time I checked they are between 35% and 15% of the peak depending on type of dwelling and location.

You are just making stuff up.


----------



## Purple (28 May 2021)

NoRegretsCoyote said:


> No, they are just not.
> 
> The CSO publishes statistics on this. Last time I checked they are between 35% and 15% of the peak depending on type of dwelling and location.
> 
> You are just making stuff up.


Property price in Leitrim might be 35% off the boom but in expensive parts of Dublin, Cork, Galway and Limerick they are within 10-15% and closing fast. 
Again, you are adding nothing to the discussion, rather you have taken it off on a tangent.


----------



## Sarenco (28 May 2021)

Purple said:


> So houses are relatively more expensive to fund now than they were 20 years ago, given that the average residential property price then was €175k and now it's €275k


I wonder is that true.

The median house price to median household income ratio is currently around 4.7.  I don’t know what the comparable ratio was in 2001 but I doubt it was much lower than 4.7.

And mortgage rates were obviously much higher back in 2001.


----------



## Purple (28 May 2021)

Sarenco said:


> I wonder is that true.
> 
> The median house price to median household income ratio is currently around 4.7.  I don’t know what the comparable ratio was in 2001 but I doubt it was much lower than 4.7.
> 
> And mortgage rates were obviously much higher back in 2001.


The average price nationally in 2000 was £125,000. I can’t find the link to the 2001 price but yes, it’s correct.
The median house price to household income ratio 10 years ago was under 3.5. I can’t be bothered looking up the exact figure but I’m sure NoRegrets, or anything better to do with their time, will look it up for me.
I’m of the opinion that returning to the same prices and ratios as the last boom is not a good thing, especially with no real income growth (worth talking about).
in the last decade, since the low point of the property crash, prices have increased by over 80% and real incomes are up by around 6%.
I’m tired of listening to people saying that it was harder years ago, it was harder in the 80’s or 90’s, people have it easy now days etc. I was around in the 80’s and 90’s. I bought my first property in the 90’s. I’m well within the top 1% of earners and if I was buying my first home now in South Dublin I’d be looking at a modest enough 4 bed semi.


----------



## deanpark (29 May 2021)

Brendan Burgess said:


> A thought-provoking article here
> 
> 
> 
> ...


To the Sunday Indo's article point about Ireland converging on Europe with more prevalence of renting - this is fine if you're young and want to or need to keep your options open. I bet the author of the article is not renting if  he's in his 40s/50s. And I doubt if (m)any 40 + somethings on AAM are renters. 

 If you have the means or had the foresight to buy young why would any sane person with a choice rent after mid 30s if they didnt have to? Its miserable dealing with letting agents/ landlords in Ireland.. humiliating actually.  In  Europe it's grand to rent but not in a slapdash & pricey rental environment such as in Ireland.  And you're buggered in old age by renting unless you want to have a very precarious time in your final years.


----------



## Sarenco (29 May 2021)

deanpark said:


> I bet the author of the article is not renting if  he's in his 40s/50s.


Well, I’m afraid you would lose that bet (although I suspect the author is in his 60’s).








						"I would never buy a property again," says Government's top housing adviser. "I rent"
					

Conor Skehan says Irish people must stop thinking of renting as ‘dead money’.




					www.google.ie


----------



## Thirsty (29 May 2021)

Sarenco said:


> suspect the author is in his 60’s


So it would be reasonable  to believe that he most likely doesn't have school age children? Moving every few years isn't an issue then.


----------



## deanpark (29 May 2021)

Sarenco said:


> Well, I’m afraid you would lose that bet (although I suspect the author is in his 60’s).
> 
> 
> 
> ...


I think Conor Skehan is talking through his hat. He's entitled to his opinion but he's wrong.

 Not feasible  to rent e.g. with kids/ schools and not a great scene generally for renters with the prevailing attitude of society looking down on renters.  Not nice to say it but that's my take on it.


----------



## Purple (30 May 2021)

deanpark said:


> I think Conor Skehan is talking through his hat. He's entitled to his opinion but he's wrong.
> 
> Not feasible  to rent e.g. with kids/ schools and not a great scene generally for renters with the prevailing attitude of society looking down on renters.  Not nice to say it but that's my take on it.


That’s nothing wrong with renting as long as suitable stock is available and suitable leases can be agreed. The problem is the issues around the supply of property as that’s the driver of price in both the purchase and rental markets.


----------



## Thirsty (30 May 2021)

Purple said:


> That’s nothing wrong with renting as long as


... and you are prepared to move every few years and don't mind the fact that when you retire on a pension of (say) 50% of your salary you will be paying the same rent as when you had 100% of your salary.

I think everyone posting here who thinks "renting for a lifetime is grand" should nail their colours to the mast and say if they are renting long term.

Thirsty (Homeowner!)


----------



## Purple (30 May 2021)

Thirsty said:


> ... and you are prepared to move every few years and don't mind the fact that when you retire on a pension of (say) 50% of your salary you will be paying the same rent as when you had 100% of your salary.
> 
> I think everyone posting here who thinks "renting for a lifetime is grand" should nail their colours to the mast and say if they are renting long term.
> 
> Thirsty (Homeowner!)


That’s why I said “as long as suitable leases are available”. As things are currently structured renting is totally unsuitable. The solution is not for everyone to buy, it’s a different rental structure. 
it all comes down to the cost and time it takes to deliver housing.


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## Leo (31 May 2021)

deanpark said:


> Not feasible to rent e.g. with kids/ schools and not a great scene generally for renters with the prevailing attitude of society looking down on renters.



Why isn't it feasible to rent with kids? I know many people who do it very successfully. If you believe society looks down on renters it may be your own prejudices clouding that judgement.


----------



## Thirsty (31 May 2021)

> Why isn't it feasible to rent with kids?


Outside of social housing (be that Local Authority or Housing association) there is no guarantee of tenure.

It is generally considered beneficial if a child does not have to change schools frequently; so if you have to leave your rented accomodation, you are limited to where you can find a new property to rent, if you want your child(ren) to stay in the same school.


----------



## deanpark (31 May 2021)

Leo said:


> Why isn't it feasible to rent with kids? I know many people who do it very successfully. If you believe society looks down on renters it may be your own prejudices clouding that judgement.


I have 2 kids at secondary - I know that I'll be in the same house until they finish. How can you      "do it very successfully" if you are bricking it that your landlord will move you on next year or the one after that? And rents fluctuate ?   Maybe their/ your definition of success is different to mine. Stability, peace of mind and being able to plan 3-5-7 years out for my kids is my definition of success in terms of where we live.


----------



## Purple (31 May 2021)

Thirsty said:


> Outside of social housing (be that Local Authority or Housing association) there is no guarantee of tenure.
> 
> It is generally considered beneficial if a child does not have to change schools frequently; so if you have to leave your rented accomodation, you are limited to where you can find a new property to rent, if you want your child(ren) to stay in the same school.


I agree with that. The lack of certainty, or certainly relative to home ownership, when renting is a major issue when children are involved.


----------



## Leo (31 May 2021)

deanpark said:


> I have 2 kids at secondary - I know that I'll be in the same house until they finish. How can you      "do it very successfully" if you are bricking it that your landlord will move you on next year or the one after that? And rents fluctuate ?   Maybe their/ your definition of success is different to mine. Stability, peace of mind and being able to plan 3-5-7 years out for my kids is my definition of success in terms of where we live.


It might be a surprise to you, but the majority of landlords don't want the hassle and expense of turfing out good tenants only to find new ones every couple of years.


----------



## NoRegretsCoyote (31 May 2021)

Leo said:


> It might be a surprise to you, but the majority of landlords don't want the hassle and expense of turfing out good tenants only to find new ones every couple of years.


AFAIK about 5% of landlords leave the market every year. Over a decade that's a very high probability that you will have to move. It'd be a hassle even with the six months' notice that is required after being six years in place.

Find a similar priced property in the same area that suits your needs as a family is not going to be easy.


----------



## Leo (31 May 2021)

NoRegretsCoyote said:


> AFAIK about 5% of landlords leave the market every year. Over a decade that's a very high probability that you will have to move. It'd be a hassle even with the six months' notice that is required after being six years in place.
> 
> Find a similar priced property in the same area that suits your needs as a family is not going to be easy.


Remember, 5% of landlords don't control 5% of rental properties with many of those leaving being the reluctant landlords of single properties. If you're looking for stability in rental accommodation you avoid the bit players.


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## NoRegretsCoyote (31 May 2021)

Leo said:


> Remember, 5% of landlords don't control 5% of rental properties with many of those leaving being the reluctant landlords of single properties. If you're looking for stability in rental accommodation you avoid the bit players.


Bit players control >90% of the rental stock though.

100% outside urban areas!


----------



## Purple (31 May 2021)

Leo said:


> Remember, 5% of landlords don't control 5% of rental properties with many of those leaving being the reluctant landlords of single properties. If you're looking for stability in rental accommodation you avoid the bit players.


Even if there's a 5% chance that in any given year you'll have to move, pay higher rent, move your kids schools etc it's still a major worry for people. We need long term leases.
I'm in the unusual position of being a home owner, a landlord and a tenant all at the same time. I've an excellent Landlord and I'm an excellent tenant. Hopefully I'll soon just be a home owner again.


----------



## Leo (1 Jun 2021)

NoRegretsCoyote said:


> Bit players control >90% of the rental stock though.
> 
> 100% outside urban areas!


In 2018, landlords with single properties represented 69% of landlords alright. At that point, just under 3% of landlords owned 10 or more properties, with a third of them having more than 100 properties on their books. I'd be interested is seeing how that has evolved since then with more commercial investment. 

Rates of home ownership both rural and urban have been trending downwards for the past 30 years. If the numbers living in rented homes continues to increase, and 5% of landlords are exiting the market every year, surely it follows that more and more are being run by landlords who are in it commercially rather than by accident. Sure, there's a way to go yet, but the rental market isn't really the horror show that some vested interests make it out to be.


----------



## Thirsty (1 Jun 2021)

Leo said:


> rental market isn't really the horror show


Do you own your home? Or are you renting long term?


----------



## Leo (1 Jun 2021)

Thirsty said:


> Do you own your home? Or are you renting long term?


How do you think my experience is representative of the entire population?


----------



## NoRegretsCoyote (1 Jun 2021)

Leo said:


> In 2018, landlords with single properties represented 69% of landlords alright. At that point, just under 3% of landlords owned 10 or more properties, with a third of them having more than 100 properties on their books. I'd be interested is seeing how that has evolved since then with more commercial investment.


I was too conservative. RTB says that "Larger landlords associated with 10 or more tenancies, manage roughly 20% of all private tenancy stock registered with the RTB." So it's more like 80% of properties controlled by bit players.



Leo said:


> If the numbers living in rented homes continues to increase, and 5% of landlords are exiting the market every year, surely it follows that more and more are being run by landlords who are in it commercially rather than by accident.


I am all for professionalisation. My best landlord ever was an Irish developer who held on to a whole apartment complex built in the 90s.

I just don't think that professionals are replacing small-time landlords fast enough though. At the moment you have a perfect storm of tax and regulation forcing the small guy out, and a government that doesn't want the funds buying up new developments.

So for the time being your average renter is stuck with an amateur landlord who has a pretty high probability of leaving at any stage.



Leo said:


> How do you think my experience is representative of the entire population?



I literally know one person over 40 who is renting on principle. He could afford to buy property but prefers financial assets. He's moved jobs and countries several times and is not married and has no kids. 

I don't think there are many people like him though at his age.


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## joe sod (1 Jun 2021)

I heard John Fitzgerald formerly of esri but all the time on media discussing retrofitting of houses to make them "green" compliant for energy and everything. It would cost a lot of money and require a lot of skilled labour. When pat Kenny pointed out that this scheme as well as costing a lot of money would suck scarce construction workers away from actually constructing houses. He admitted this would be an issue and didn't really have any solution. At the same time the government has kept the pup in place until end of summer so there is no compulsion for young people to get into construction indeed many construction workers are still on it. 
To paraphrase Ronald Reagan is the state not the problem in most cases with all these contradictory schemes and incentives sucking workers away from doing what they should be doing


----------



## Thirsty (1 Jun 2021)

> @Leo How do you think my experience is representative of the entire population?



Why do you answer a question with a question? 

I find it interesting that those who expound the view that long term renting is perfectly fine;  are not, from what I can see, renting long-term themselves.


----------



## Thirsty (1 Jun 2021)

> So it's more like 80% of properties controlled by bit players


I don't think it's fair to categorise small landlords in this way; without them there  would be even less rental properties on the market.


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## NoRegretsCoyote (1 Jun 2021)

Thirsty said:


> I don't think it's fair to categorise small landlords in this way;


Not my use of the term!

I'd like to see more bigger players in the rental market. I think they are better for tenants.

I think small landlords are leaving faster than bigger landlords can replace them though and I don't think that's a good thing.


----------



## Leo (1 Jun 2021)

Thirsty said:


> Why do you answer a question with a question?
> 
> I find it interesting that those who expound the view that long term renting is perfectly fine;  are not, from what I can see, renting long-term themselves.


Because your question has no relevance. The above just confirms your views are based on assumptions!


----------



## Thirsty (1 Jun 2021)

> views are based on assumptions



I've proposed that everyone posting here says clearly if they are a homeowner or if they are renting long term.   

And it is very relevant, putting your money where your mouth is so to speak.

So far as I can see (but this is a very long thread & I may have missed some); only @Purple and myself have said what our housing status is - would you like to add yours @Leo?

Thirsty (home owner!)


----------



## deanpark (1 Jun 2021)

Thirsty said:


> I've proposed that everyone posting here says clearly if they are a homeowner or if they are renting long term.
> 
> And it is very relevant, putting your money where your mouth is so to speak.
> 
> ...


What a great idea Thirsty! I also nailed my colours to the home owning mast. I encourage transparency as there's smoke and mirrors with the pro-renting argument on the thread.


----------



## Delboy (1 Jun 2021)

NoRegretsCoyote said:


> I'd like to see more bigger players in the rental market. I think they are better for tenants.


The evidence in the market, especially Dublin, would say you are wrong. The big players have set new levels for higher rents and are deliberately keeping properties vacant to underpin those higher rents


----------



## odyssey06 (1 Jun 2021)

Delboy said:


> The evidence in the market, especially Dublin, would say you are wrong. The big players have set new levels for higher rents and are deliberately keeping properties vacant to underpin those higher rents


I wonder is that a distortion caused by government rent limits.
If they reduce the rental price they may not be able to increase it again easily and this affects the asset value of the property.


----------



## Purple (1 Jun 2021)

Delboy said:


> The evidence in the market, especially Dublin, would say you are wrong. The big players have set new levels for higher rents and are deliberately keeping properties vacant to underpin those higher rents


Higher rents are a reflection of supply and demand and vacant units are a reflection of bad regulation of the market. None of that is the fault of large scale landlords.


----------



## Coconut Water (1 Jun 2021)

> _The First-Time Buyer’ is a myth that needs to be put into perspective as the ultimate tiny tail that is wagging a very big dog. There are about two million houses and apartments in Ireland. Out of about 24,000 annual house purchases, only around 6,000 are first-time buyers.
> 
> This means that national policy is driven by the needs of one third of one percent of all homeowners, and one quarter of annual sales._



That's completely backwards. The smaller the share of houses that go to FTB the more of an issue it is. If no FTB could afford to buy a house would he consider the crisis over?


----------



## jpd (1 Jun 2021)

We need to make the pie bigger, not argue over who gets a bigger slice of the same size pie

Moving dwellings from rented dwellings to owner-occupied dwellings, or vice versa, does absolutely nothing to fix the housing crisis - we need to put in place policies that ensure more dwellings are built - full stop.

If this means higher densities in locations where people want to live, then so be it and we should ensure that the planning system makes available the roads, schools, shops, parks, etc that are necessary


----------



## Purple (2 Jun 2021)

jpd said:


> We need to make the pie bigger, not argue over who gets a bigger slice of the same size pie
> 
> Moving dwellings from rented dwellings to owner-occupied dwellings, or vice versa, does absolutely nothing to fix the housing crisis - we need to put in place policies that ensure more dwellings are built - full stop.
> 
> If this means higher densities in locations where people want to live, then so be it and we should ensure that the planning system makes available the roads, schools, shops, parks, etc that are necessary


I agree that we need higher density housing but I think that the flaws and dysfunction within the process, from land purchase to housing completion, are a bigger issue. There is nothing driving efficiency within the system, any part of the system, as it's a sellers market.

Factors which contribute to housing shortages and affordability include;
Land hoarding and the inability of the government to tax and/or regulate it.
The small number of entities which own the bulk of the development land as an understandable result of NAMA taking over vast amounts of debt from vast amounts of developers and selling it off in large chunks.
The time to takes to get planning permission, and the associated cost of finance.
Grossly inefficient construction methods. . For an industry that makes up 13% of global GDP is it remarkable that it is so grossly inefficient and sees such low returns.
Costs imposed by the State.
Provision of infrastructure services by the State.
The high rates of interest within the mortgage market, driven by banking capital requirements, the fact that mortgages in this country are effectively unsecured debt
A general lack of competition within a fragmented construction market which has low levels of capital intensity, high labour costs and low barriers to entry at the lower end.


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## Leo (2 Jun 2021)

NoRegretsCoyote said:


> I was too conservative. RTB says that "Larger landlords associated with 10 or more tenancies, manage roughly 20% of all private tenancy stock registered with the RTB." So it's more like 80% of properties controlled by bit players.


But not all bit-players are bad. What incentive is there for landlords with 10 or fewer properties to keep flipping tenancies on a regular basis, particularly in RPZ areas which account for the majority of tenancies?

I'm not suggesting there isn't an issue here, but the narrative that there is a high level of volatility experienced by the majority isn't borne our by the evidence. 17,000 landlords have left the business in the last three years while the number of households in rental accommodation continues to steadily increase. At that rate we'll have bit players in the game for quite some time yet, but there are already over 1,000 landlords who own more than 100 properties.

The RTB reports don't support the narrative of tenants suffering from insecurity in their tenure. Only 5% of tenants in RPZ zones reported a somewhat or very negative relationship with their landlord, and only 6% reported they felt very insecure, those with a poor understanding of their rights were far more likely to feel insecure.



NoRegretsCoyote said:


> I just don't think that professionals are replacing small-time landlords fast enough though. At the moment you have a perfect storm of tax and regulation forcing the small guy out, and a government that doesn't want the funds buying up new developments.
> 
> So for the time being your average renter is stuck with an amateur landlord who has a pretty high probability of leaving at any stage.


I'd agree with the rate being slower than what might be ideal. but recent legislation is certainly moving the needle. I believe the recent government move to block the mass purchase of developments is purely window dressing to appease the rabble. Otherwise why add restrictions so that it would only apply to developments after they had been advertised for sale while also talking about referring it to to the AG on fears such measures might be unconstitutional?


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## Leo (2 Jun 2021)

Thirsty said:


> So far as I can see (but this is a very long thread & I may have missed some); only @Purple and myself have said what our housing status is - would you like to add yours @Leo?


I've spent many years renting and as an owner. My views are coloured by my experiences in both, but I understand I'm just one person, so my experiences are not representative of a national issue.


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## Thirsty (2 Jun 2021)

Indeed; I have paid rent myself in the past; many (most?) adults would have done so I would think.

But I think from your post that you are now a home owner, and I'm sure you had many good reasons, as did I, for making the change.

And that essentially is my point.


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## deanpark (2 Jun 2021)

Leo said:


> I've spent many years renting and as an owner. My views are coloured by my experiences in both, but I understand I'm just one person, so my experiences are not representative of a national issue.


Leo​Moderator​Messages12,481

Monday at 2:47 PM

#72



> deanpark said:
> Not feasible to rent e.g. with kids/ schools and not a great scene generally for renters with the prevailing attitude of society looking down on renters.


Why isn't it feasible to rent with kids? I know many people who do it very successfully. If you believe society looks down on renters it may be your own prejudices clouding that judgement.

-------------

Leo

Re above - I'm curious as to how your experiences are not representative of a national issue but you are happy to infer that I'm prejudiced due to society's attitude to renters. It's a tad inconsistent.


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## Leo (2 Jun 2021)

deanpark said:


> Re above - I'm curious as to how your experiences are not representative of a national issue but you are happy to infer that I'm prejudiced due to society's attitude to renters. It's a tad inconsistent.


Because I'm just one person, one person can never be fully representative of a population.

You claimed there was a


deanpark said:


> prevailing attitude of society looking down on renters.


I questioned that, as I don't believe that is the prevailing attitude. You haven't provided any evidence that such an attitude exists.

As per the last census, 30% of dwellings were rented and that number has continued to rise. Are you really looking down on them all? Even the ones renting high-end houses in Ballsbridge paying 4-5k a month? Do you think society overall would consider them less fortunate than a home owner in a socially deprived, high-crime area?


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## Peanuts20 (2 Jun 2021)

2 things jump out at me on renting

As an employer, I'm seeing immigrants in their 30's with kids having to make a big decision, they now need a home, not a flat share. They can't afford to buy but also can't necessarily afford to rent a home. Hence, a number of them are making the decision to return home. Couple of my team have made that decision in recent weeks and they are young, reasonably well paid professionals. That's a loss to us as a society

I'm now in my "forever" home, mortgage will be paid a month after my 58th birthday at the latest. From then on, the house is ours. However is due consideration being given to people renting in the private sector who will reach retirement age?. How will they then afford a rent which their pension may not cover. Will they need HAP payments (or an equivalent) to cover their rental. ? If so, this would be a draw on state resources. Is there a potential time-bomb ticking out there?


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## jpd (2 Jun 2021)

Was there not an ancient Greek city that used to elect one member of the town to take decisions on behalf of the whole community?


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## trajan (2 Jun 2021)

> _) The First Time Buyer
> The First-Time Buyer’ is a myth that needs to be put into perspective as the ultimate tiny tail that is wagging a very big dog. There are about two million houses and apartments in Ireland. Out of about 24,000 annual house purchases, only around 6,000 are first-time buyers.
> 
> This means that national policy is driven by the needs of one third of one percent of all homeowners, and one quarter of annual sales.
> ...



1. Of the 18,000 non-first-time buyers, what is the proportion who are downsizing and tipping the saving to their families to give them a start ?
I can see an electoral case for the 18,00 too be given *some* say in the housing crisis debate. But I doubt if many of them would be so lacking in social/national perspective as to consider that greater consideration in policy be given to their category than to the first-time buyers.

2. The current figures for Ireland are skewed in favour of renting due to unaffordability and/or unavailability of homes in the last 20+ years. After the bust there was availability but few people could afford to buy them.

3. I take BB's point about the wider population needing to educate themselves - with help from responsible professionals - on non-property investments. Absolutely. But even if we were all proficient in such investments, I think Irish people - and many other EU citizens too - would want to first pay off the mortgage before going into investments seriously. Why? Because most of us want fixity in our everyday physical lives for conveniece; for avoiding the emotional upheavals accompanying moving house; and not least for relational reasons when children have to change schools and friends, parents lose the support of neighbours and nearby friends/family. Having the mortgage paid doesn't entirely eliminate the risk of losing the house but it's as good as one can do without winning a lotto. So investment learning is a thing people only learn when they have to liquidate propert assets for many Irish people.

4. I'd love to see a breakdown in the 200,000 vacant homes figure.
How many are holiday homes in provincial Ireland ?
How many are derelict or in bad repair or disfunctional in a variety of ways ?
How many are within a drive to employment centres ?
How many are within a drive from people in rent pressure zones ?


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## NoRegretsCoyote (2 Jun 2021)

Leo said:


> As per the last census, 30% of dwellings were rented



We are clearly talking about the private rented sector (not social housing) and that number is only 20%.



Leo said:


> 17,000 landlords have left the business in the last three years while the number of households in rental accommodation continues to steadily increase.



Again, wrong. There were 312k private rented tenancies in Q1 2019 but only 298k private rented tenancies in Q4 2020. So it's falling about 8k a year.



Leo said:


> Only 5% of tenants in RPZ zones reported a somewhat or very negative relationship with their landlord, and only 6% reported they felt very insecure, those with a poor understanding of their rights were far more likely to feel insecure.



Yes but the rental demographic is different and so will the baseline for anxiety. When I was a private renter aged 25 my landlord sold up and gave me three weeks to move out. It was a pain but I managed it. At my age with kids in a nearby school it would be a complete disaster.

The best years of my life were spent renting but as soon as I had kids and a stable career in one place I sought to buy. I suspect you did too


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## Leo (2 Jun 2021)

NoRegretsCoyote said:


> We are clearly talking about the private rented sector (not social housing) and that number is only 20%.



The 30% was quoted in response to Deanpark's comment, it's valid in that context.



NoRegretsCoyote said:


> Again, wrong. There were 312k private rented tenancies in Q1 2019 but only 298k private rented tenancies in Q4 2020. So it's falling about 8k a year.


Are you confusing number of landlords with number of registered tenancies there? The RTB reported a drop of under 4k registered landlords over the course of 2020.



NoRegretsCoyote said:


> Yes but the rental demographic is different and so will the baseline for anxiety. When I was a private renter aged 25 my landlord sold up and gave me three weeks to move out. It was a pain but I managed it. At my age with kids in a nearby school it would be a complete disaster.


The RTB's report on the affects of the RPZ measures did assess demographics, but didn't call out any correlation between age and security. Youger people do tend to be more carefree and less considerate of the future though. 



NoRegretsCoyote said:


> The best years of my life were spent renting but as soon as I had kids and a stable career in one place I sought to buy. I suspect you did too


The majority still do, but that isn't one of the myths being addressed. I wasn't trying to claim otherwise, I was countering the suggestions that renting is unfeasible for families or that everyone in rented accommodation is in constant fear of being kicked out or consider themselves a second class citizens.


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## NoRegretsCoyote (2 Jun 2021)

Leo said:


> Are you confusing number of landlords with number of registered tenancies there?


No. The RTB says "Number of Private Rented tenancies" in both releases. Number of landlords is cited elsewhere. Click through and have a look..

Your claim that "the number of households in rental accommodation continues to steadily increase" is just wrong.


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## Leo (2 Jun 2021)

NoRegretsCoyote said:


> No. The RTB says "Number of Private Rented tenancies" in both releases. Number of landlords is cited elsewhere. Click through and have a look..
> 
> Your claim that "the number of households in rental accommodation continues to steadily increase" is just wrong.



~4k drop in number of landlords over 2020

I was using CSO data for number of households, but that only covers to the last census. There was indeed a drop in the number of registered tenancies last year.


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## deanpark (2 Jun 2021)

Leo said:


> The 30% was quoted in response to Deanpark's comment, it's valid in that context.
> 
> 
> Are you confusing number of landlords with number of registered tenancies there? The RTB reported a drop of under 4k registered landlords over the course of 2020.
> ...


I think you deleted my comment(s) Leo so it's difficult to cross reference my input.


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## PMU (2 Jun 2021)

trajan said:


> 4. I'd love to see a breakdown in the 200,000 vacant homes figure.


Here's what the CSO has:  https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/vac/


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## Purple (3 Jun 2021)

odyssey06 said:


> I wonder is that a distortion caused by government rent limits.
> If they reduce the rental price they may not be able to increase it again easily and this affects the asset value of the property.


I think the State puts a floor in the rental market in the form of HAPS. When


Leo said:


> There was indeed a drop in the number of registered tenancies last year.


It would be interesting to see how many of those were people moving "back home" due to remote working. I've certainly heard of a number of young people moving back to family homes in rural locations to work remotely in Dublin based jobs.

I doubt there were many families leaving rental accommodation who weren't moving to a purchased home.


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## joe sod (3 Jun 2021)

A lot of the shortage in housing construction is got to do with Labour shortages, I know there has been a good debate on more industrialization of construction methods with factory built components which is valid. The reality is that could take a long time to establish and is "blue sky" stuff rather immediately deliverable . If we need more construction workers we should prioritize that for migration visas. Currently cOvid aside it is too easy to get a work permit to work in Ireland. Therefore we need to corall the work permit system into areas of critical shortages like construction, health and hospitality. If it is too easy to get some work permit well then migrants will naturally choose more desirable jobs and the critical shortage areas will remain short of workers.


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## Leo (3 Jun 2021)

Purple said:


> It would be interesting to see how many of those were people moving "back home" due to remote working. I've certainly heard of a number of young people moving back to family homes in rural locations to work remotely in Dublin based jobs.
> 
> I doubt there were many families leaving rental accommodation who weren't moving to a purchased home.


Good point, it will be interesting to see how the numbers move over the next couple of years.


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## Purple (3 Jun 2021)

joe sod said:


> A lot of the shortage in housing construction is got to do with Labour shortages, I know there has been a good debate on more industrialization of construction methods with factory built components which is valid. The reality is that could take a long time to establish and is "blue sky" stuff rather immediately deliverable . If we need more construction workers we should prioritize that for migration visas. Currently cOvid aside it is too easy to get a work permit to work in Ireland. Therefore we need to corall the work permit system into areas of critical shortages like construction, health and hospitality. If it is too easy to get some work permit well then migrants will naturally choose more desirable jobs and the critical shortage areas will remain short of workers.


Migrants fill the skills shortages in the ITC sector. If we didn't have the immigrants the jobs wouldn't be here. 
They also fill roles in the health service, especially in areas like care assistants and nursing. Again, they are roles which Irish people don't want to do or don't have the skills to do.


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## Leo (3 Jun 2021)

Purple said:


> They also fill roles in the health service, especially in areas like care assistants and nursing. Again, they are roles which Irish people don't want to do or don't have the skills to do.


What? Are you saying qualified nurses wouldn't want to apply for bricklayer visas if that's all they could get?


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## trajan (3 Jun 2021)

What do you do for a living, Leo ?


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## Purple (3 Jun 2021)

Leo said:


> What? Are you saying qualified nurses wouldn't want to apply for bricklayer visas if that's all they could get?


Our nurses bugger off because to countries where they pay less income tax (you know, that tax that's raised to pay them).
Brick laying is more skilful, harder and more dangerous so I doubt they'd try it.


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## Leo (3 Jun 2021)

trajan said:


> What do you do for a living, Leo ?


A mix of IT management and grumpy comment posting, why?


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## trajan (3 Jun 2021)

> trajan said:
> 
> 
> What do you do for a living, Leo ?


A mix of IT management and grumpy comment posting, why?

Take a walk on the wild side - it's nice to see what it's all for in "this place" . . .


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## Purple (3 Jun 2021)

Leo said:


> A mix of IT management and grumpy comment posting, why?


I thought you did a bit of this and a bit of that.


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## Leo (3 Jun 2021)

Purple said:


> I thought you did a bit of this and a bit of that.


Ah, the rest of those I do for the love of it, not a living


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## Purple (10 Jun 2021)

David McWilliams article in the Irish Times suggesting that a site value tax is the main thing needed to get property prices down is hardly a revelation but it seems to me to be a bit of a no brainer.


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## lff12 (5 Aug 2021)

Ceist Beag said:


> With all due respect that's a pretty ridiculous argument. By his own numbers first time buyers are 25% of the relevant target group here. Not 0.33% - he's just trying to rearrange numbers to suit his own view. As WolfeTone said, the target group of the policy are those in need of housing.
> 
> 
> I'm not sure what point he is trying to make here. Ultimately, if renters had the same certainty as those with mortgages, in that the rent only increases in line with the ECB rates for example, this would remove some of the uncertainty. The government RPZ were supposed to achieve that but judging by the DAFT annual reports they are a long way from doing so. Who is at fault there - are landlords simply ignoring the guidelines or are they not being enforced? Either way, renters are indeed the victims of this.
> ...





WolfeTone said:


> True. But if to acquire the same use by other means (ie a mortgage) and the cost of repaying that mortgage is cheaper over the long term then the rent is dead money.
> It depends how you define 'dead money'. I define it simply as the excess paid over what it would cost if availing of the alternative option (mortgage) to acquire the same utility.


It depends. If your rent was below the cost of purchasing the same property, it would be good value.
The problem is, that for most people it simply is not.

The RPZ model has failed, mostly due to lack of enforcement and difficulty in getting people to actually report breaches. Its literally the norm round here to significantly raise rents after a tenant leaves, after all, the only personal who can give evidence against the landlord in this regard is the previous tenant. And usually they have moved on and don't wish to get involved.


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## NoRegretsCoyote (5 Aug 2021)

lff12 said:


> The RPZ model has failed, mostly due to lack of enforcement and difficulty in getting people to actually report breaches. Its literally the norm round here to significantly raise rents after a tenant leaves, after all, the only personal who can give evidence against the landlord in this regard is the previous tenant. And usually they have moved on and don't wish to get involved.


The objective of the RPZ regime was to *protect sitting tenants against large rent increases.*  In that regard it has been very successful.


The prohibition of big rent hikes between tenancies was a secondary objective, mainly to prevent landlords from strategically ending tenancies with below-market rents with the hope of re-letting them at market rents.


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## lff12 (10 Aug 2021)

NoRegretsCoyote said:


> The objective of the RPZ regime was to *protect sitting tenants against large rent increases.*  In that regard it has been very successful.
> 
> 
> The prohibition of big rent hikes between tenancies was a secondary objective, mainly to prevent landlords from strategically ending tenancies with below-market rents with the hope of re-letting them at market rents.


But the primary objective ONLY lasted as long as the tenancy did. I'm sure there is a dwindling body of tenants from pre-2013 with very low rates. Many of those would have moved by necessity or used the savings to fund a purchase. And in practice landlords CAN hike the rent up between tenants - most of them don't get caught as not all tenancies are registered (of the 13 tenancies left here, only 5 are currently registered) and unless a previous tenant or someone else knows, PRTB are not aware by default of the actual rents paid if they are not. The extension of Part 4 from 4 to 6 years and restrictions on evictions are what has made the biggest difference to a lot of tenants - the gap being the event of a sale, where at a time like there where there is a financial incentive to sell for many, is making a difference.


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## lff12 (10 Aug 2021)

Purple said:


> David McWilliams article in the Irish Times suggesting that a site value tax is the main thing needed to get property prices down is hardly a revelation but it seems to me to be a bit of a no brainer.


He's right - but it WILL ruffle feathers by pushing landowners to either do something or sell up. There's a bit of pushing needed to bring all parties on board with this position as it might devalue a lot of derelict land nobody has any intention of doing anything with, but gets a value on account of where it is located.


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## NoRegretsCoyote (10 Aug 2021)

lff12 said:


> I'm sure there is a dwindling body of tenants from pre-2013 with very low rates.


I've lost track of the changes to the RPZ regime, but I know you don't have to have a pre-2014 tenancy to benefit from protections.


I am sure there are landlord who increase rents illegally between tenancies. But there are also lots of people (including landlords) who will refuse to break the law despite a negligible chance of being caught.


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