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tententwenty
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Should that be 1918 or are we mullet-bashing here? Not that theres ever a bad time for that...Good point - it's all gone a bit GPO on a Saturday in 1980 around here
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Stupid question probably but why should the government try to prevent investors outbidding FTBs?
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tententwenty
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One wants a place to live, one wants to drive housing prices higher so they can make a profit, making it even harder for the other one to find a place to live. Social responsibility, among other things.
So that would never have gotten ourselves into this situation in the first place. It's all too late now though. The recommendations of the Bacon report were discarded. That was our "get out of jail" card and we still couldn't resist the lure of a quick buck.
Grrr, once again. There is absolutely no problem finding somewhere to live in this country. And with rents being lower than mortgages and an oversupply of rental accomadation there really is no problem for someone who doesn't own property (ftb) to find somewhere to live. In fact it's EASIER for them to find accomodation than someone who owns and who, if they wish to move, will find themselves in a long expensive chain before they can actually change address. Investors have actually facilitated this scenario.
This "must own" mentality is absolutely pervasive. Maybe someone should send in Amnesty International to continental Europe to free the landless masses from their Oirish BTL overlords.
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tententwenty
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And once again, why should they have to rent out their whole lives? There is no justification for that. None. Not in this country. Anyway, as I said, the market is in the process of sorting it out with gusto, as we speak, so no need to supply the hotline number for amnesty international, thanks.
Nope but that's a completely different thing entirely. I just want to know why one person cannot outbid another person on a property because they intend to let rather than live in that property.
We need a rental market too.
It's funny that on one side we have people who want socialist style housing for all (since home ownership is clearly a "right"). On the other side we have people who want the government to intervene to prevent the market collapsing.
Have all the capitalists fled already?
I remember when the 1st few Bacon measures were introduced - higher SD rates etc. Rents went through the roof as supply plummeted, queues around the corner for rat-infested holes.
It was a pain for people who left school around 1990 or so - the biggest Leaving Cert classes => biggest no of renters who grew up to become the biggest no of FTBs who are now older again and causing the 'trading up' price increases.
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tententwenty
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Once you start dealing in things like home ownership as a vehicle for profit, you get into all sorts of nasty situations (like the one we have now, for example). Its the exact same as the American medical system; once you treat healthcare as a for-profit business, you have problems like a large percentage of all bankruptcies in the US being caused by medical fees. And thats just the people who have insurance, which costs an arm and a leg too. Your basic profiteering.
Buy a home to live in it, or trade up your old home to sell so you can move to a better home. The rental market is already oversaturated.
Edit: And adequate healthcare isn't a basic human right either.
Ok, well you're drifting into a very Socialist argument there regarding the role of government and housing in society. While I wouldn't necessarily disagree with your sentiments it completely ignores the real world as it stands today.
I don't agree with the role investors have sometimes played in the Irish housing market but there's no point in just ignoring the scenario as it exists and pining for a utopian society.
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tententwenty
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The real world as regards healthcare here and in the US are very different. The real world as far as housing goes, we are very similar. The real world is what we make.
I'm not advocating government sponsored socialised housing across the board, just the severe cracking down on speculators and irresponsible lending practices, possibly marketing practices, and most certainly on the corruption that appears to be endemic to the zoning process and planning permission. That should get housing down to its historic norms, which as I recall were more like 3-4 times average wage than 5-6 times, although I would agree that inflation has reduced a good deal since then, so maybe 5 times average wage is closer to sustainable. Hardly utopian aspirations, there.
This all sounds very socialist. The rental market may be oversaturated now but that still doesn't explain why an investor should not be allowed outbid a FTB. If I buy a house and rent it out to someone who has neither the means nor the inclination to buy, I'm providing a service. In return for this service I don't see why I shouldn't be allowed make a profit.
The bubble we have now has been caused (like all bubbles) by greed and fear, not by having landlords. Everybody who bought is complicit in some way.
Restricting the market by not allowing investors to outbid FTBs would be counterproductive in my opinion.
I agree with all of the above measures which sound more like proper regulation (like government's are supposed to do) rather than any outright market interference. Although I'm not sure if speculators are necessarily such a bad thing. They are very easy to blame for sure but they too have their role. Certainly they could be discouraged from simply buying houses and sitting on them for capital gain.
However, this is a million miles away from a situation where investors are banned from outbidding FTBs on a house (I could see so many things going wrong with that one).
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tententwenty
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You mean using government funds, taken from taxpayers, to support the public? Yes, they would be better off burning all that cash on a useless civil service.
Because 9 times out of 10, an investor will be able to easily outbid a FTB, which is a bad thing, as it leads us to the situation we have today. And you haven't a notion of turning a profit on rent in today's market, even without over a quarter of a million empty houses. Yes, there is a place for landlords and rent, of course, but that playing field should be tightly controlled in case it gets out of hand.
What role would that be?
No one is talking about banning them, just increasing taxes for second and subsequent houses, or measures to that effect.
Fair enough.
Err, surely now you're placing a price on what housing should or shouldn't be? This is effectively treating housing as a commodity, something you buy and sell and so place a price upon.
Look I don't care one way or the other who, or what's, to blame for the current high price of housing. I just feel it's overpriced, yes as a commodity, and so chose not to purchase at current prices. I don't actually blame anyone. Looking at the price it's too much for me right now so I'll pass.
Blaming the house price rises on speculators is again missing the main point. The speculators wouldn't have the money if the banks hadn't loosened lending criteria and were willing to give them so much money with so little up front.
Human nature being what it is, people cannot help but take advantage of the cheap money. These 'speculators' are your friends, relatives and neighbours - and everyone else that has bought into this pyramid scheme.
There's nothing wrong with investors being able to outbid FTBs. In a sane market you need a mix of both so that people like me who move a lot and want to rent can have someplace nice to live too.
Human nature being what it is, people cannot help but take advantage of the cheap money. These 'speculators' are your friends, relatives and neighbours - and everyone else that has bought into this pyramid scheme.
There's nothing wrong with investors being able to outbid FTBs. In a sane market you need a mix of both so that people like me who move a lot and want to rent can have someplace nice to live too.
Ok, just being pedantic (again), but just because an investor can outbid a FTB in an auction scenario isn't in itself a bad thing. In any auction where the absolute price of the commodity is unknown it is the person who overestimates the true value of the item that actually wins the auction. As such the investor has guaranteed himself that he has overpaid for his 'commodity'. As such he has saved the FTB from overbidding. Ok in reality the losing FTB then bids like a mad man on the next place but at some point people just have to have personal discipline and walk away from auctions when their price limit is exceeded.
This is know within Game Theory as the Winners Curse.
http://en.wikipedia.org/wiki/Winner's_curse
I'd prefer to have it put back in my own pocket in the form of reduced taxes.
The situation we have today hasn't been caused by investors outbidding FTBs. It has been caused by FTBs outbidding investors. If FTBs weren't willing to pay ludicrous sums of money for a house there would be no market for the speculators who buy houses at inflated prices and sell them on to FTBs at even more inflated prices. The more a government tries to interfere with the free market the more distorted it becomes (just look at the housing market today for example).
It costs a lot of money to build housing estates and apartment blocks. Even very rich developers find it tough to raise the finance to do it in one go. So they build in phases and raise the finance by selling the phases off plan in advance of the build. People who intend to live in a home mightn't be happy to buy off-plan so this is where speculators come in. They add liquidity to the market.
Blindjustice said that the government never tried to prevent investors outbidding FTBs, implying this was a bad thing. Unless you hold Venezuala and Cuba as role models for a utopian society, I fail to see why this would be a good thing.
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tententwenty
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Absoloutely.
Two words for you here... "diversified portfolios". There are a great many other investments than property.
Theres plenty wrong with it. For a start it leads to spiralling house prices and a looming collapse, with consequent knock on effects for the entire economy, which is what we have today. An investor wants to buy many houses, a FTB only wants one. Once its bought, they are out of the market, but the speculator will keep buying and driving up prices.
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