"Building more expensive housing helps everyone"

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AlbacoreA said:
My criticism here is of the Govt. Not the market or those active within it. But what is the purpose of the article. What's the message? If there is one.
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The Government is the biggest player in the market.

They are the biggest landlord in the country, the biggest driver of increased rental costs as instead of building social housing they take homes out of the private market for social housing (they use private renters taxes to price them out of the market).
That reduces stock for rent and for sale and decreases liquidity in the market. People can't trade up or down because there are so few properties for sale. That means there are more homes under occupied and over occupied.
Anything that increases supply is a good thing.
 

We'll have agree to disagree that adding new stock where's these least demand has any social benefit at the height of historic housing crisis.

 
AlbacoreA said:
We'll have agree to disagree that adding new stock where's these least demand has any social benefit at the height of historic housing crisis.
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You're ignoring basic economics.

How do you ever ameliorate a shortage except by suppressing demand (impossible as long as the population is either stable or rising) or increasing supply?

And what's your point in relation to Clancy Quay?
 
T McGibney said:
You're ignoring basic economics.

How do you ever ameliorate a shortage except by suppressing demand (impossible as long as the population is either stable or rising) or increasing supply?

And what's your point in relation to Clancy Quay?
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Higher interest rates and higher property taxes would suppress prices though.
 
Just curious.
I wonder has any serious thought been made at a government level regarding encouraging the supply of smaller houses in urban areas to facilitate trading down?

In our estate and there is a steadily ageing coterie of owners.
Most are 4 bedrooms and a couple have 1 or 2 occupants'
There is nothing that I can see in town to encourage them to sell up and downsize.
 

Lot to be said as you age, staying where you know everyone on the street and in the area. Support network etc.
 
T McGibney said:
....while probably making the shortage considerably worse.
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Will it? The building costs will be the same but they are less than half the total cost of the house. Land values should drop and certainly a site value tax levied on all zoned land would encourage less hoarding.

We've a problem with under and over occupancy and I do think that the lack of supply is making the market far less liquid and so there is less trading down/right-sizing.
 
I think that's a big problem and very hard to address. Higher property taxes would offer a stick but with nowhere to go it's like beating someone who is cornered.
 
Interest rate hikes always make it harder for borrowers to acquire property and riskier for developers and builders to deliver it.

Higher property taxes just scare off developers and undermine the confidence of those who fund them.
 
T McGibney said:
Interest rate hikes always make it harder for borrowers to acquire property and riskier for developers and builders to deliver it.
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The market cost of a house is linked to the cost of money. If there are 5 people in the queue for a house the person with the most money will get it. The interest rate decides how much they borrow, that's all.

T McGibney said:
Higher property taxes just scare off developers and undermine the confidence of those who fund them.
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What makes you think that?
 
T McGibney said:
Higher property taxes just scare off developers and undermine the confidence of those who fund them.
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Purple said:
What makes you think that?
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I'm amazed you need to ask. Higher taxes add to risk, and property development is already a highly risky activity without adding to it. It's no coincidence that a tax cutting programme kickstarted our building boom from 1997/98 and higher taxes have helped stymie hopes of a resurgence since 2009.
 
Purple said:
The market cost of a house is linked to the cost of money. If there are 5 people in the queue for a house the person with the most money will get it. The interest rate decides how much they borrow, that's all.
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And if a higher interest rate means that they can borrow less, and thus pay less, doesn't that mean that fewer vendors will sell, and fewer developers will develop, as long as prices are depressed as a consequence?
 
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Property taxes are levied on the owner of the property, not the developer. Why would increasing them deter builders? VAT is a deterrent but I don't see how a tax on the end user or, in the case of the owner of a zoned site the land owner, is a deterrent to the developer.
Tax incentives from 1997/98 caused a massive misallocation of capital into construction where there was little market demand. I benefitted from them but as a country they did us little overall good. Transaction taxes deter activity but do capital taxes?
 
T McGibney said:
And if a higher interest rate means that they can borrow less, and thus pay less, doesn't that mean that fewer vendors will sell, and fewer developers will develop, as long as prices are depressed as a consequence?
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Other than Landlords people sell houses because they need to or because Granny died etc, not really because their value has increased.
 
Purple said:
Property taxes are levied on the owner of the property, not the developer. Why would increasing them deter builders?
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Basic economics. A tax on any good will decrease the attractiveness of owning that good and increase risk for those who produce that good in the hope of selling it.

Purple said:
VAT is a deterrent but I don't see how a tax on the end user or, in the case of the owner of a zoned site the land owner, is a deterrent to the developer.
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Again this is very basic and I'm amazed that you have to ask. Property development inherently involves acquisition and ownership of zoned land.
 
Purple said:
Other than Landlords people sell houses because they need to or because Granny died etc,
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Well obviously, but not in sufficient quantities to satisfy market demand at a time when the population is at or near a historic high.
Purple said:
not really because their value has increased.
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I honestly don't know where to start with this. It's not 1 April, is it?
 
T McGibney said:
Basic economics. A tax on any good will decrease the attractiveness of owning that good and increase risk for those who produce that good in the hope of selling it.
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A property tax will make the hoarding of zoned land as a form of capital price speculation less attractive. That's a good thing. In the context of the overall risk of developing a site a site value tax is a minimal consideration. I'm amazed you think otherwise.

T McGibney said:
Again this is very basic and I'm amazed that you have to ask. Property development inherently involves acquisition and ownership of zoned land.
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See above. I'm amazed you think that a site value tax will have any significant impact on the decision of a developer to develop a site. If anything it would free up the availability of zoned land thus making it cheaper to buy and decrease the cost of the land.
We have what is effectively an oligopoly in Dublin where a small number of partied control the majority of the zoned land. They can control the price by controlling the supply. This is far more complex than "basic economics".
 
Either you're trolling or you haven't the first clue about economics. It's a truism that taxes on an activity disincentivise that activity. And a tax on land hoarding will clearly disincentivise property development as it's impossible to be a property developer without some level of land hoarding.

If you're prepared to claim that people don't sell houses because their prices have gone up, I'm only wasting my time here, sorry.
 
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