03.17.06
House prices in Ireland
Just caught the last 2 minutes of a debate on the Late Late show about house prices. Just in time to see Eamon Dunphy blaming auctioneers for high house prices. Obviously I must rise to the defence of this maligned profession but OBJECTIVELY speaking it is fair to say that no auctioneer makes anyone pay anything for a house…people spend the maximum that they can afford, and what they can afford has risen in the last 10 years because
a) more double income households
b) banks willing to lend the money (and breaking every lending guideline in the process)
c) people willing to borrow more because of stable low interest rates
d) massive demand and limited supply
e) parents releasing equity from their own houses to help children
etc. Blaming auctioneers is stupid.
ben said,
March 17, 2006 at 10:34 pm
Blaming them for *what*, anyway? The percentage of people’s income that goes to housing has fallen and fallen and fallen.
Cyrille Regis said,
March 18, 2006 at 12:02 am
Give it a rest with the fucking auctioneers.
JTC said,
March 18, 2006 at 11:37 am
I agree with you 100%. Anything that makes it easier to buy a house tends to put up the price of a house.Subsidies do not reduce house prices-they eventually go into the pockets of builders. The one sure way to reduce house prices is to have a recession as in the 1980s
Pete said,
March 18, 2006 at 6:08 pm
Of course it’s stupid to blame auctioneers for high house prices. They are salespeople, employed by the sellers to sell for the highest price they can get, and paid a percentage of that price. Everyone knows this, it’s not a secret, they’re quite openly just doing their job. But they don’t set the prices. House prices are set by what people pay, and what people pay is mostly set by how much they can borrow, and how much they can borrow is mostly set by current interest rates, and current interest rates are set by the ECB becuase the government took Ireland into the eurozone. So high house prices are the government’s fault.
Ben,
>The percentage of people’s income that goes to housing has fallen and fallen and fallen.
I’d like to see numbers to back that up, for people who’ve bought in the last 5 years.
Many houses in Ireland are owned outright by people who bought them for peanuts years ago and now spend 0% of their income on housing. As far as I can see, most reports seem to include all these 0%’s when calculating the average % of household income being spent on housing, which makes the resulting number low and meaningless.
Sarah said,
March 18, 2006 at 6:15 pm
spot on there Pete.
Daniel K. said,
March 19, 2006 at 3:04 pm
I think that part of the anger at auctioneers is that they are part of the non-productive element of the economy that is not wealth generating but makes its living in a parasitic (I mean that non-judgementally) manner. It’s a bit like the quotes that St. Patrick Day’s generates €58million for Dublin. No, it doesn’t generate that money at all, it just prompts people who have that money already to spend that money on that day. The only money that could be viewed as generated would be from foreigners who have come and are spending money brought in from outside the economy, that would be reasonably viewed as having been ‘generated’.
Much like the figure of 500,000 or 400,000 people who viewed the parade in person the media has lost the run of itself where numbers are concerned.
Back to auctioneers there does appear to be problem in Dublin especially of misrepresenting sale prices.
I, for one, enjoyed the fact the Late Late did one of those where are we now, and where are we going discussion that Gaybo used to host so well. Though I thought Brendan Gleeson was very caught up in what he was saying and seemed to find it hard to wrap up his point.
The political argument is that the PDs especially advocated reducing taxation and correspondingly public spending while never telling people that would mean that they as individuals would have to pay for those services directly (which should have meant more choice of where to source your service). Leave aside of the yeas of nays of that political argument is that the PDs have left people thinking that they can have reduced taxes but somehow the state will still spend increasing amounts on service provision.
Paul said,
March 20, 2006 at 9:59 am
Ironic that one of the biggest and overpaid fat cats of them all ( Dunphy) comes on air and represents the people of ireland, having a go at every other fat cat in the land.
Gerry said,
March 20, 2006 at 3:57 pm
Daniel,
Are you suggesting it is impossible to reduce the tax rate without increasing the overall tax take? I think the recent economic history of Ireland would prove otherwise.
Besides which, as you well know, increasing taxes really just means the private sector paying more of the pensions and guaranteeing the higher wages of the public sector with very little increase in any service provision.
gerry
Daniel K. said,
March 21, 2006 at 9:13 am
Gerry,
I’m not suggesting that. In fact the government has increased the tax take over its lifetime, the main question is what extra service are we getting? The PDs for ideological reason wanted to move some services to direct payment. This is something I personally don’t have a problem with, I believe your payment for a service should be related to your usage as well as your ability to pay. I believe that people place no value on things given for free, the plastic bag tax is the prime example. Suddenly, people thought those things had some value and cost associated with them and changed their behaviour (though it is slipping back)
Back to my point, the PDs didn’t give people choice about where to source the service and also never said anything about reducing spending per head on those services. Which they have done.
Fact is the government is a bad customer for services as it isn’t paying from its own wallet and doesn’t in Harney’s own word ‘shop around’.