Why (the state) bailing out housing market is a bad idea..mcwilliams indo article

Re: Why bailing out housing market is a very bad idea

ccbkd said:
I think a separate forum for Housing Marketing should be set up in AAM, just like Tax , Legal etc, how about housing that way we could dump all the EA's and property classes and let them argue over and back in a separate forum
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My guess is that everyone on here has some interested in what property is doing either in the rental or buying sector
 
Re: Why bailing out housing market is a very bad idea

television said:
3 Things

1. Long term population increase is not as determined by short term immigration.
2. We still have low unemployment in ireland at 6%
3. Around 25000 people at a guess will come this year looking for work
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There is only one direction for birth rate in Ireland and that is down. That's because of inflation, wage stagnation and general competitiveness of society will force people to spend more on their kids all round education. When people are stressed and unsure about economic future they will have less kids, simple as that. Doesn't matter if the people were Irish or immigrants, the birth rates all go down.

Immigration will slow because of less work for people and emigration will increase.

Will Dublin's population grow? Yes I think so, how much, hard to tell. People and especially immigrants like to live in cities with good public transport infrastructure and wide range of professional jobs. Only Dublin has even a semblance of this at the moment if you include the plans for the metro.

You also have mentioned a few strange ideas Irish people hold. For instance the idea of affordability equals how much you shoud pay for something. Or the idea that property will always have such high regard as an investment vehicle among Irish people, why would you put so much money in a non-performing or stagnating asset when you could invest in some other market/country. You say Ireland's growth will be linked with India's/China's. How? Perhaps if you said we will open all our 3rd level unis to their students that might be something. However Ireland's growth is still overwhelmingly based on American/EU economy. Asia and Ireland have few real business links.
If India's/China's economy is going to grow so fast why put your money in Irish property rather than there. Plus I personally believe China is due for a correction and from what I've heard about factory closures in Guangdong..it's stock market and property has come down a lot and it's factories are getting more expensive, it's FDI is going to slow down a lot now, what goes up must come down at least temporarily (check America's economic development late 19th early 20th century for an idea..fortunes were lost in the downturns although ultimately it was going to be the world's biggest economy after many decades of ups and downs). China has disadvantages also in that it is resource poor in the vast interior and western region and it's eastern seaboard has already been overdeveloped.
This whole idea of China going up and up without a major blip or two along the way, it's never been done in any other country or sector.

Finally I don't understand the concept of 'bailing out the housing market'. Surely cheaper house prices are better for Irish people in general and make us more competitive, why does the government need to spend tax money on subsidising people with overpriced assets which people willingly bought? Essentially taking money out of everybodies pockets to prop up an artificial price.
 
Re: Why bailing out housing market is a very bad idea


Yes, if only common sense prevailed in Ireland. But when you have a nervous government desperate for support and a still too powerful building lobby bad decisions get made.

When you think about it - the banks are willing to lend x amount of money to a borrower based on their valuation of the house and on the borrowers ability to repay (now based on a properly prudent assessment with 80/90% LTV and borrowers actually showing they have the ability to save a deposit). The building lobby want to set this aside and get the government to provide taxpayers funds to encourage FTB's to over-borrow and pay an inflated price for a home which will then place an excessive stain on the FTB's budget in trying to repay it.....madness!
 
Re: Why bailing out housing market is a very bad idea


So mucch doom and gloom. I dont see that in the long term. Economic cycles go in peeks and troughs. Yes we are on the way down but at some point things will get better.



POtential for new markets for irish services.

mainasia said:
If India's/China's economy is going to grow so fast why put your money in Irish property rather than there. ..
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Stick with what you know is a motto I have.

Property to fall in the next 3 years then invest in Dublin close to the city. Your on to a winner over the next 10 years.
 
Re: Why bailing out housing market is a very bad idea


[broken link removed]

There is a blip at the moment due to the relatively better performance of the Eastern European economies, although the Economist says they're heading for the mire also.

Overall though the worlds population will grow more in the next 30 years than ever before in the history of Earth

http://en.wikipedia.org/wiki/World_population

This assumes we avoid mass famine through affordable energy costs.
Alot of these people would come to Ireland (a relatively well administered place with good living standards when compared to some of the wretched places these people come from) if they are allowed. Currently they're largely curtailed.

This unprecedented wave of population growth will affect Irelands population dramatically and will undermine our lowered fertility rates not withstanding the 2 caveats mentioned above
 
Re: Why bailing out housing market is a very bad idea

@Television

You seem to be working yourself up in anyway possible to justify in investing Dublin City Centre. While I don't agree with most of what you said investing in Dublin wouldn't be a bad idea in my opinion (city living will become more popular for a variety of reasons and there's nowhere even close to Dublin in Ireland). You should put your 'investment' view to 15-20 years though. Plus you will tie up your capital for most of your life...pretty boring.

@bababing

You use statistics from 2004-2006, peak of Polish immigration to Ireland for building industry....not relevant.
 
Re: Why bailing out housing market is a very bad idea

Relevant article by Michael O'Sullivan in today's Irish Times (Sounds a little bit McWilliamish in outlook, relevant all the same)
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Re: Why bailing out housing market is a very bad idea

Judging by the latest DAFT Rental and House Price reports the market appears to be correcting itself. No need for the govt to do anything.

http://www.daft.ie/report/Daft-Rental-Report-Q2-2008.pdf

http://www.daft.ie/report/Daft-House-Price-Report-Q2-2008.pdf

House prices and rents falling. This will lead directly to lower in inflation which should facilitate the national pay negotiations. I fully expect to hear Govt and Union representatives hailing this and possibly taking credit. This is great news for Irelands competitiveness and cost structures, why would they do anything to reverse this trend?

If housing is a necessity, like food and energy, then falling prices which benefit the consumer should be welcomed by official bodies as they would be for any other necessity.
 
Re: Why bailing out housing market is a very bad idea

television said:
POtential for new markets for irish services.
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Yes but what can we export that they want? Bear in mind that exports (which were the great economic hope post the property slowdown) are actually falling!

It is not enough to say that we need to target these markets. European, Japanese and American exporters are already successfully targeting these markets. Ireland does not really have an indigenuous export sector - over 90% of our exports are generated by foreign owned firms. If we wanted to become a genuinely export oriented economy it will take years to achieve. Our costs are too high, or infrastructure not good enough, our workforce lacks the correct skills and we do not invest nearly enough in our industries. The foolish consumption boom masked these problems for too long. We are now looking to the sector that we ignored to rescue the economy - fat chance.
 
Re: Why bailing out housing market is a very bad idea

Howitzer said:
If housing is a necessity, like food and energy, then falling prices which benefit the consumer should be welcomed by official bodies as they would be for any other necessity.
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house prices are falling..but lenders are also thightning up big time...so first time buyers are still going to find very hard to get on the property ladder, falling prices or not!
 
Re: Why bailing out housing market is a very bad idea

starlite68 said:
house prices are falling..but lenders are also thightning up big time...so first time buyers are still going to find very hard to get on the property ladder, falling prices or not!
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Yeah, you're not wrong there. Still, with rents falling and huge over-supply (according to Daft.ie), there's never been a better time to rent.
 
Re: Why bailing out housing market is a very bad idea

I tend to agree with the views that a propery crash can only be good. One of the negatives of the housing boom meant that the land underneath any constructed property outstripped the value of all other business that could be placed there.
That meant that residential property - and the fast buck for the builder - gave a bigger profit that restaurants, hotels, leisure and most retail.

It stopped most small businesses getting off the ground in the area that I come from as the sheer cost of the premises left it impossible to make a profit. That in turn kills jobs, except for those who stood to profit from construction.
Not an indication of good economy.
 
Re: Why bailing out housing market is a very bad idea

Seen we're on page 11 of a thread on bailing out the housing market, i think its worth asking; Does anyone think its a good idea for the goverment to bail out the market?

Would it be better if prices stayed at the 2006 levels?
Should FTB's who bought between 2004 and now be given financial support?
 
Re: Why bailing out housing market is a very bad idea

aircobra19 said:
What do you think.
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Hell NO, there should be no bail-out. A bail-out will only shift the problem further down the line.
Just wondering do anyone think a bail-out will be good for the country?
 
Re: Why bailing out housing market is a very bad idea

Senna said:
Should FTB's who bought between 2004 and now be given financial support?
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My investment in the Grand National didn't work out last year either. Can I have some financial support too please?
 
Re: Why bailing out housing market is a very bad idea

absolutely not

I don't get this country's stance on property.

I lose money on shares => I have to pucker up and take my losses, its my own fault and I have to learn from my mistakes.

I lose money on property => dear god property's only meant to go up, quick bail me out and those other poor developer lads too. Sure its not their fault its the credit crunch/banks/doom and gloom merchants fault. Get Tom Parlon on the phone, that man talks a lot of sense
 
Re: Why bailing out housing market is a very bad idea

I don't think anyone here thinks there should be a bail out so where's the argument for?
 
Re: Why bailing out housing market is a very bad idea

Where's that Charlie Mc... guy. He's always good for a line about helping out the good old chaps who took a risk and made this country what it is
 
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