Rent Control in Europe: Cyprus

Population: 1,165,000 GDP: $23,263,000,000 Avg. Weekly Earnings: €393.50 Avg. Apartment Price (Per. Sq. M.): €1,790.00 For 120-sq. m. apartment in city centre Avg. Monthly Rent: €441.82

In this post we will be analysing the current housing market in the Mediterranean island nation of Cyprus. According to the RICS Cyprus Property Price Index, published on July 4th, prices of both residential apartments and homes increased during the first quarter of 2016, 1.2% and 1.5% respectively.[1]

This comes on the heels of a dramatic price collapse for the Cypriot housing market; while the entire world felt the effects of the economic downturn of 2008, there was a disproportional decline in housing prices in Cyprus. There were two readily identifiable causes for the increased susceptibility of the Cypriot market: the reliance on injections of foreign investment capital, primarily from the U.K. and Russia, which all but evaporated when conditions took a turn for the worse back at home, and the title deed logjam that plagued Cypriot housing.

The title deed debacle characterised Cyprus’s real estate development up until its collapse in 2008. The …

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Rent control in Europe: Belgium

Population: 11,250,585 GDP: $473,524,000,000 Avg. Weekly Earnings: €522.75 Avg. Apartment Price (Per. Sq. M.): €3,023.00 For 120-sq. m. apartment in city centre Avg. Monthly Rent: €970.62

In our ongoing examination of tenancy laws and rent control practices in the European Union now looks at Belgian rentals. In 1991, an uncharacteristic rise in rents, particularly in Brussels and the surrounding area, prompted a statute devoted to private tenancy to be introduced into the Civil Code.

This statute, which was reformed in 1997, aims to increase the equitable relationship between landlords and tenants, and ensure protection of tenants and their family housing. Additionally, the Belgian Parliament inserted into their Constitution, in 1993, the right to enjoy suitable housing as a fundamental right and freedom of Belgian citizens.

Belgian tenancy law is subdivided into two parts: federal law and regional restrictions. At the federal level, it is stipulated that tenancy contracts do not impart any real property rights to tenants, with little to no ambiguity, and there is little in the way of consumer protection legislation, other than prohibitions and provisions for recovery …

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Rent control in Europe: Sweden

Population: 9,884,285 GDP: $570,591,000,000 Avg. Weekly Earnings: €842.29 Avg. Apartment Price (Per. Sq. M.): €687.51 Avg. Monthly Rent: €1,252.83

To begin our series profiling the rent control situation in EU countries, we will take a look at the impact of rent control on the private rental market of Sweden, with a focus on the capital city of Stockholm where the city limits are home to 900,000 of Sweden’s 9.9 million citizens. The rental market there is a relevant reflection of the country’s conditions as a whole given the importance of the city to the economy in general.

Sweden has perhaps the most pro-tenant laws in the world, and has been held up as an example for other EU nations investigating rent control legislation. The reasons for the attractiveness of the example are largely because people look at the terms tenants in an existing tenancy face. The issue that arises, however, is that in creating such a tenant-friendly environment, the Swedes have subsequently alienated landlords and generated a dramatic shortage of rental properties, that aspect of their market is rarely raised …

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Higher rent supplement, sometimes you just can’t win.

Raising rent supplement is a tricky solution to a housing shortage for a few reasons. Firstly, if you increase purchasing power where there is scarcity it will likely serve to drive up prices generally.

Think about the following scenario, Joe RentSupplement is trying to rent a home that Jim PrivateRenter also wants, what it boils down to is private renters versus publicly funded renters, and in that mix one now has higher purchasing power.

What is the one simple thing the privately funded renter can now do? Raise their price, this is how they outbid the publicly funded renter, Joe  RentSupplement is still out of a place to call home.

What are the solutions? More public housing – but perhaps not with a ‘for the rest of your life‘ tenancy agreement forming the basis of it. The other thing would be to allow increases for tenancies in situ. This last point cannot be overlooked.

Many of the new homeless come from the private rented sector. This occurs when the prices they are asked to pay are beyond their affordability, far …

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Is equality about money or rights?

In this piece which appeared originally in the Sunday Business Post on the 8th of May 2016, Karl Deeter questions the conventional wisdom of calls for a right to housing (or housing equality) being about ‘rights’ and that it is perhaps more about money and governance.

The script after this text in italics is the text of the article that was published.

When we hear people talk about inequality or social issues like housing, is it about money and process or is it about rights? This may seem obvious at first, but when you start to look into it, often it’s not so simple.

It’s obvious that a person with no place to call home isn’t equal to those who have such a place (be it rented or owned) and civil society generally accepts that this implies a certain level of duty on the rest of us.

Usually the state helps to equalise this situation by making the provision of a place to call home possible, be it social housing or emergency accommodation. This would lead to the assumption that …

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Irish Times article by John McCartney, Lorcan Sirr & Karl Deeter

The Irish Times carried an article by John McCartney (Savills), Lorcan Sirr (DIT Bolton St) and Karl Deeter (Irish Mortgage Brokers) about the issues surrounding a shift away from a home ownership model.

Our point isn’t that there is a definitive ‘right or wrong’ way to provide housing, obviously our market has massive issues at present, but the larger question is the long run effects and how a lack of household savings can turn a property crisis into a pension crisis of sorts.

That is why we need to find new solutions for more than just housing.

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Irish Examiner quotes Irish Mortgage Brokers on planning

The Irish Planning Institute held their national convention in Athlone and we were pleased to see one of our own as one of the opening speakers at it. The points raised about planning, housing, and the importance of household wealth were received well by the audience which was about 300 strong and made up of the key players in planning throughout Ireland.

Claire O’Sullivan of The Irish Examiner followed up with a good piece on the conference and quoted Karl Deeter extensively, the excerpts from the article are below.

The Government should consider removing the rights of people to object to proposed developments as it is hugely costly, causes delays, and is not necessary, the Irish Planning Institute’s annual conference heard.

A compliance manager with the Irish Mortgage Brokers Association, Karl Deeter, said instead there should be greater trust in the ability of planners and the local authority.

He said a “third party right to object” did not exist in many countries as the planning departments and local authority are expected to make the correct decision.

“The role …

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The Edmund Honohan plan, in a nutshell, it’s bad policy

Last night on Claire Byrne Live the Master of the High Court, Edmund Honohan said that the constitution didn’t stand in the way of the state being able to pursue certain social agendas when it came to property and property rights.

This hinged on the back of an article in which the Minister with responsibility for housing Alan Kelly apparently said that the constitution blocked his ability to resolve our housing crisis, Honohan rebutted this with an open letter in the Sunday Independent.

What follows is an extract of the letter: Consequently, if the Oireachtas is of the view that the State should itself (or its local authorities) provide public housing “in the Common Good”, the State can (and probably, legally, should) decide not to wait the two/three years needed to build social housing but instead to immediately acquire houses now in private hands.

If the owners of these refuse to sell, acquisition can be by compulsory purchase with full compensation assessed by the arbitrator.

It so happens that there is a stock of such housing which has …

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Newstalk: Talking Point on housing, Saturday 9th April 2016

This week on Talking Point the host Sarah Carey did a great job of examining housing issues with the panel of guests which in studio included Lorcan Sirr of DIT, Dermot Lacey a Labour Party Councillor and Karl Deeter of Irish Mortgage Brokers.

Many relevant points were made about tenure, about supply constraints and solutions as well as discussions about things that don’t often make the press – such as permanent tenures and the like. It is well worth listening back on given the breadth and expert insight of the show.

 

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PRTB deposit scheme? Whatever… Here’s the way around it

It is only due to fairly unsatisfactory outcomes with the PRTB (such as massive delays in hearings, awarding damages that will never be recovered and the fact that they jacked up their prices while also only charging one party to the contract) that the idea of them running any further ‘scheme’ is of concern.

On that basis, and in speaking to landlords, many of them won’t take part, and there’s a simple reason for it, they don’t want to be part of a scheme that creates more administration and reduces the relationship to being further beholden to a third party.

So here’s the way around it: stop taking deposits.

That’s all there is to it, landlords should merely stop taking deposits and when they do there will be nothing to give to the PRTB because the deposit was never received so it cannot be passed on.

What you can do is demand first and last months rent up front. This means you don’t hold a deposit for any damage, but if the damage is significant a deposit won’t cover it …

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