Bubble trouble: Dublin’s 300-year-old problem
Karl points to evidence of a similar boom-and-bust cycle in the 1700s to make the case that property bubbles are endemic to Ireland.
Now, just a few years after a catastrophic bust, Ireland is once again experiencing a full on boom:
We find ourselves victims of a massive housing shortage just after one of the world’s largest property crashes in which oversupply played such a key role…
Despite the lack of credit – the few first time buyers there are entering the market, combined with foreign and domestic cash buyers – there is a massive mismatch in supply and demand.
Karl ponders why our system is a mess compared to the rest of Europe – why our government and banks are allowing debtors to avoid repossession, planning restrictions prevent the much needed supply and whether we will continue the same boom-and-bust for another 100 years.
Hard-pressed families set for five-year freeze on their property tax
After popular pressure, Finance Minister Michael Noonan has discussed relief measures for hard-pressed families (the Independent reports).
That relief looks likely to be a delay in the revaluation period, so they current massive price rises aren’t hitting homeowners in the teeth with what they initially thought was good news for the value of their homes.
The paper has been told that senior ministers are considering freezing property tax bills at the same level from 2017 to 2019. Property tax is currently set on the value of a home in May 2013. This is due to be revalued in May 2016 – which could be a good deal higher if Dublin’s price rises continue unabated.
More than a family a day lose home
But despite those stories that there will be some relief on homeowners and our system protects them from repossessions, the Independent can report that 39 families lost their homes in Dublin in July alone.
This is largely due to the failure of the rent supplement system. Mike Allen from Focus Ireland says it’s within the government’s power to fix the problem:
“We cannot escape from the fact that there are not enough homes to rent in the lowest third of the market for everyone who is seeking a home to secure a roof over their heads.”