Matt Cooper spoke to John McCartney of Savills and Karl Deeter about the good and bad of any government intervention into the mortgage market.
Ged Nash recently said that ‘wages should rise‘ as a way to give some relief to hard pressed middle income earners. This is an unusual stance given that Mr. Nash is a financially unaffected third party to this and has no idea of the situation many companies are in which more about a state of tight cashflow management and deleveraging.
Why should wages rise? With unemployment still elevated at well over 11% there is still enough excess capacity in the labour market to ensure wages don’t rise except for in industries with a constrained supply of workers or a skills gap, such as IT is experiencing at present.
Other than that, wages are unlikely to naturally rise because you can replace a worker for today’s market clearing prices (current wage), although that doesn’t always happen as people are not widgets, but the general thesis holds. If placed between two propositions of workers with similar skills you can opt to take on an extra person on a ten person …
The Moncrieff Show on Newstalk had us on to talk about interest rates, economics and taxation. In the unmistakable style that Sean Moncrieff is known for, suffice to say, he kept Karl on his toes!
We looked at the cost of going to college and also considered the financial sense it may or may not make. Sometimes people forget that there are many routes to success and it isn’t limited to going to University, we think going to college is a great idea, but want to stress that there are alternatives and that there are costs and trade off’s to consider.
We were asked to discuss whether or not we have a property bubble at present in Dublin. We don’t have a ‘bubble’ but we do have a boom and booms often lead to bubbles so the time for action is now, not later.
Pat Kenny spoke to us about the report from the ESRI which indicated that many people were now getting out of negative equity due to rising prices.
This needs to be tempered by a realisation that on every commodity that there are winners and losers, the losers are just not as clearly framed as the winners and this was a point we tried to make.
This week on Drivetime’s ‘Talking Money’ we discussed the idea of long term leases and how to negotiate them. There is an issue in Ireland that many people don’t consider long leases because deep down they are a latent buyer who hasn’t gotten out yet. Equally landlords may feel they miss out on price moves that may benefit them, or that there is some kind of legal commitment that outstrips the Part IV tenancy which exists after 6 months (it doesn’t).
Longer leases equate to more sustainable cashflows and better predictability of the income streams from the asset, they are an example of a ‘win-win’ situation for all parties.
The Pat Kenny Show broadcast from the Shelbourne Hotel last week and Pat had Karl Deeter on to talk about rising property price and what they mean for different people as well as who the winners and losers of it are.
For some, the crash presents new opportunities such as the couple in Longford that were mentioned, for others it means being trapped in a property they can’t pay for and which rising prices represent an opportunity of freedom, but the main point is that there is no ‘common good’ to higher costs that can’t be avoided.
On this week’s installment of ‘Talking Money’ on RTE’s ‘Drivetime’ show we looked at ‘Peer to Peer’ lending (also abbreviated as P2P).
There are downsides and upsides to it so we thought it would be worth fleshing that out, Audrey Carville who was the presenter on the day even started off with an interesting factoid that neither Jill nor Karl knew about!