This clip is a good insight into the many facets of the housing debate when looking at the ‘crisis’ end of the spectrum. It raised some interesting issues and commentary. One thing we want to state is that there was an implication that if a fund bought your mortgage that you might be able to get thrown out rapidly, we should state clearly that this simply isn’t the case and is likely a misinterpretation of fact than a stance which is there to deliberately mislead.
The lesser discussed problem of rising rents will be the rising prices of the next few years, we see it as a foregone conclusion that price pressure will be upwards as long as rents are rising.
This occurs for several reasons, first is that higher rents compel renters into the purchasing space, those that can move must have sufficient savings and earnings to do so, but equally, those that can afford high rents – and to escape them via a purchase, are exactly the ones who will make that choice.
There is a tricky relationship between rents and prices, but as can be seen from the chart showing the last 25yrs there is some correlation.
What we can see is that often when rents are rising that prices then catch up, at times rents can even be falling and prices still go up – this is perhaps due to the delayed nature of the commitment to a property contract which can be long drawn out.
What you don’t see for long in that chart is rents rising …
Background: The Irish residential property market has gone from a period of spectacular growth, to a dramatic crash and lately to recovery in the past ten and half years (2005 – 2015) the period I will concentrate on in this article.
The economic factors which influenced these major upheavals are many and varied such as Interest Rates, Unemployment, Population Growth, Demographics, Wage Inflation, Exchange Rates vs Sterling & the US Dollar, Budget Measures, Central Bank borrowing limits, Credit Availability, Rents, Sentiment & Stock Market performance.
This is not an exhaustive list but it does show the range of factors that can influence property price movements with some having a much more dramatic effect than others. Here I will confine my analysis to the influence four key factors played on residential property prices in Ireland during the period discussed.
These are Unemployment, Migration, Exchange Rates & Sentiment. Firstly I will look at the property prices themselves and how they have behaved during the period.
In the early part of the period under review (2005 to 2007) property prices increased …
The Pat Kenny show on Newstalk 106FM had Karl Deeter of Irish Mortgage Brokers and Carol Tallon of BuyersBrokers on to discuss the property market in 2016 and to consider some of the things that were happening as well as why certain problems seem to persist.
It was an interesting segment and one that highlighted things such as problems of dereliction.
This is a copy of a good debate that took place on the Sean O’Rourke show today on RTE Radio. It was a good example of how two contrary points can both have supporting arguments which seek different ends but where both sides have validity. We think that a return to bubble credit would be a disaster, but equally hold dear the idea that it isn’t up to Central Banks to orchestrate the winners and losers in society.
We were asked by Morning Ireland to discuss homelessness and to iterate our view that the removal of bedsits which were a source of housing for people with low to no incomes was a mistake. Focus Ireland shared the view and made important points about their work being more than just putting roofs over peoples heads.
We spoke with Mary Wilson on Drivetime about the Budget 2015 announcements and agree that it wasn’t a ‘budget for builders’ because it was more like a budget for land bankers.
It really upsets me to read that a person who needs and qualifies for rent allowance is told they can’t have it. The person in question fell ill after donating a kidney to a nephew. This is another example of how the machine breaks down from time to time and does so at a human cost when the merit of disallowing a person the allowance is political rather than being based on any desire for better outcomes.
But then the debate is followed up with a list of suggestions by a group who are the housing equivalent to Peter Pan, thinking that there is a magic way to stay young forever (or in this case functional at a high level without massive societal cost). Most of which is reliant upon an inductive fallacy that you can determine a certain housing outcome is desirable then just policy your way into making it a reality. Something which falls into …