Are property prices on the way up or down ?

Increasing CGT will do what abolition of int. relief mighn't

removing int. relief and making it clear that it will not be reinstated will not bring prices down as investors will still have an investment that gives a good return in comparission to others. It will stop investors purchasing more property and leave houses available for first time buyers.

If Labour get in and talk about increasing CGT most investors will look to liquidate their investment in the 5 months between now and budget day. They'd be foolish not to look at this since the difference in tax bill could represent as much as a couple of Corollas on a medium sized house.

If Fianna Fail stay in government then house prices\rents will continue to track affordability and things like mortgage interest rates and the average industrial wage will determine affordability until oversupply is reached and then the prices will fall through the floor.

Re: Increasing CGT will do what abolition of int. relief mig

Hi Geoffrey,

You're arguing, on one hand, for a tax increase for investors (via interest relief) and, on the other hand, against a tax increase for investors (via CGT).

Sorry, but it doesn't make sense to me.

BTW, you're not by any chance an FF supporter or member?

Tommy

What I'm saying is.....

that abolition of mortgage interest relief will stop extra investors coming into the market but won't free up many houses and introduction of CGT will prompt investors to leave the market, free up houses for first time buyers and take their profit.

Each first time buyer that purchases a house will remove demand from the rental sector as they no longer participate in that market so the rental sector won't come under pressure.

No conflict in reasoning there, no non sequiter, no FF vote in this household.

political interests

Tommy what's your preferred party? Geoffrey has stated his at your request.

Re: political interests

Danny, in fairness I have identified myself publicly on this forum and on AAM generally. I note that neither Geoffrey nor yourself have done so. On that basis I do not feel it necessary to divulge my own party political preferences (if any) on AAM. Those who know me fairly well will know the answer anyway.

I don't see how my politics (or lack thereof) is relevant anyway, esp. to anything we have discussed in this thread . I asked Geoffrey to clarify his own affiliations 'cos I had seen him make several postings which seemed to heavily favour the case for a return of FF to govt. That's his right, but in fairness to him, I felt it was important to ask him whether he had any particular agenda in mind when he made these comments. Obviously, Geoffrey had no problem in answering my query and more power to him for that.

Tommy

who said I was pro FF

I wouldn't trust them to babysit much less run a country.

I was just pointing out that under FF no changes to policy can be expected and as the price of houses is governed by this governments interference in the market prices will continue to rise until oversupply is reached potentially leading to massive negative equity for some.

I would prefer to see 10-15% gradually knocked off the price of houses within the year rather than seeing 40% knocked off them in 18 months time all of a sudden.
While I don't agree with Labours policy of increasing CGT one of the few benefits it would bring is the return of sanity to the property market.

Asking Tommy about his political persuasions may not be relevant but asking him if has invested in housing would be as those with a number of houses bringing in rental income and appreciating in value year on year have a vested interest in talking up the market.

Re: who said I was pro FF

Hi Geoffrey,

The only housing I have invested in is my own home, which I had built 2 years ago in my home parish down the country. I can assure you I certainly have no intention of selling it.

By the way, I agree that there are too many people with vested interests unjustifiably talking up the property market at the moment. However, I do think that it is wrong to blame the rental property sector for recent price increases. It is political inaction, at local and national level, and poor planning that is to blame, in my opinion.

Tommy

here's my theory.....tell me what you all think.
most people now have SSIA's
myself and my partner both save the maximum.
in 5 years we will have about €40,000 to do with as we please.
this is an abnormal situation.
multiply this by the number of couples like us.
and in five years time you will have a masive flood of property deposits becoming available almost at once.
prices will skyrocket like in 1999-2000.
thats the next peak....mark my words.
but when is the trough coming.
my guess is mid to late 2003.

Tenants and Landlords

Being an investor myself, I have mixed views on the rental sector. I luckily purchased an investment property in Dec 97, 4 months prior to Bacon 1. The abolition of mortgage relief was designed to drive investors out of the market, but it only partially did that. Bacon 1 only managed to take out of the market people like myself, which Tommy correctly describes as "Novice investors", but those who didn’t need to borrow to buy were still in there buying anyway. Bacon 1 achieved nothing other than to again favour the rich.

I can see both sides of the problem, and the government should bring in legislation to protect both Tenants and Landlords. Tenants from the perspective of excessive rent hikes and security of Tenure and Landlords from Tenants who proceed to wreck properties and for no apparent reason refuse to pay rent. Thankfully I have had no problems with tenants, but I have heard of them. There was a woman on the radio one morning that had ventured to buy a property and rent it out, only to have difficulty with the tenants. She had to go to court to get them out and in the process they wrecked the house to the tune of £30,000.

In relation to CGT, I think there should be different rates, depending on the gain being made. After all, if a person works there This post will be deleted if not edited to remove bad language off for a year to earn lets say €150,000, there taxed at 42%, whereas an investor who sits on a area of land, and then makes a gain of €150,000 pays only at 20%, and he had nothing to do! I would make bigger gains chargeable at higher rates, similar to the way stamp duty is on purchase.

Last but not least, The government should also give 100% interest relief to first time buyers similar to investors!