NewsHousing boom or bust?
Housing boom or bust?

Housing boom or bust?

Even though we are still struggling through a pandemic that has reduced GDP, house prices in Ireland have increased by 13% over the last year. And not just in Dublin; prices are up by 18% in Munster, 16% in Leinster and 15% in Connacht and Ulster. What’s more, this is not just an Irish phenomenon.  House prices have increased by 13% in the US, while Germany, Netherlands and the UK have all seen increases over 10%.

For homeowners, house price increases are good news, existing homeowners are all getting wealthier as the market rises. But while homeowners are experiencing a boom, aspiring homeowners who are not on the property ladder are experiencing a destructive and dangerous bust.

The main cause of this simultaneous boom and bust is a shortage of housing and home building. The pandemic slowed down new home construction. Planning delays and objections are slowing development. New building regulations make it more difficult and more expensive to build. The legacy of the financial crises means mortgages are difficult to secure. Then add to the mix the competition for houses brought by a range of funding players from homelessness charities to cuckoo funds.

Faced with this environment, first time buyers, especially the younger generation, are finding it impossible to buy homes. They are being forced to rent or to stay at home with their parents, parents who at the same age owned their homes. The property bust this generation is experiencing is one they may never recover from. Many young people now believe that they will never own homes.

What might be a boom for those of us who are homeowners is building up a serious problem for society. Every generation since the foundation of the State has improved its lot on the previous generation- this may be about to change. With the housing solutions very hard to fathom, there is bound to be a day of reckoning.
Have you benefited from the boom or suffered from the bust? What is your solution to help first time buyers?

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Someone from LK commented:

Too many people with 2 or 3 properties as holiday homes, investments etc pricing out 'home seekers'. This is leading to the destruction of local communities, with potential for businesses, local schools etc closing. Wales had this problem and introduced a Land Transaction Tax (their version of Stamp Duty) with higher levies for second home buyers. This was well after certain individuals took to burning second homes in anger at being priced out of their local area. Let's hope we do not come to this! An annual community levy should be considered for second home owners 

christopher from D commented:

If you are already a property owner and you are not trading up you should be allowed to remortage your property for ie improvements extensions etc, but not for the purpose of financing the purchase of a second property as an investment while this present housing crisis lasts. And first time buyers only should be the critera, and they would have to agree that this will be their main residence for a minumum period of two years. Public land and the services should also given to co/ops for self builds and finished builds would have to be the main residence of the benificaries for a minumum of two years. Speculators and investors have to be taken out of the present market if we are to have any chance of solving this criss.Joe Co Dublin. 

MARK from D commented:

If we could please stop using the term "property ladder". The majority of people just want a secure home, not a commodity to be "flipped". Also the idea of "increasing wealth" is a bit of a farce. The notional value of a house in an artificially inflated market is superficial and irrelevant. Can we start reinforcing the idea of a roof over your head being a constitutional right with the obligation on the state to prevent us jumping from one bubble/crash crisis to another. 

Someone from LK commented:

For those of us who own our homes, the market price is of little relevance. If we move we have to pay a similar price for a similar house, whether it’s zero or 10M. It’s those trying to get on the ladder, paying unheard of rents, are the ones that are seriously affected. The Government needs to get back and solve this problem. New ideas are needed. Call in some ideas-people like David McWilliams and Eddie Hobbs. 

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