Let the free market determine who buys what and where?

Let the free market determine who buys what and where?

Let the free market determine who buys what and where?The recent survey of first time buyers conducted by MyHome.ie showed that 48% had received a loan approval, a further 31% were actively seeking a loan approval and 58% of those surveyed intended buying within the next twelve months indicating an underlying demand for housing yet to be satisfied.

But one third of first time buyers … expressed a preference to buy a 3 bedroom semi detached home as their starter home whilst only 14% were seeking to buy either a one or two bedroom apartment. In addition only 18% expressed a preference for a newly built property as their first home.

Given sustainable living in urban areas involves high density accommodation (apartments) and the majority of the overhang of unsold new-build properties in urban areas are apartments, is there a case for some form of “incentive” to encourage first time buyers to choose new apartments to help (a) clear the excess supply and (b) promote sustainable development?

If so what could be done? Cash payments? Tax credits? Increased mortgage interest relief? A guarantee of a lower rate of property tax once it comes in?

Have your say:

  • Should there be an “incentive” to encourage buyers to choose one type of property over another?
  • Or should nothing be done and let the free market determine who buys what and where?
There are 11 comments for this article
  1. Gerry Downes at 12:41 am

    In general the housing market in ireland wheather good or bad is to controled by Govt.They get the real profit of any transaction on a huge scale(taxes) there are to many restrictions for buying and saleing, there should be a cap on the appeciation of values to stop fabricated values,and comps should be pulled from sales within that area on square footage. At no time should any one who works a full time job along with there spouse be not able to aford to purchase a house(There Home) or rent a home in there own country there is something wrong with that, were does it stop. In other words if some one needs financial help to pay there mortgage or rent or down payment through what ever form of subside (First time buyers) they can’t afford it,that is the hounest reality it’s just a quick fix to get you into the home. I know that sounds cold but it’s true we are suckerd in because of our emotion’s of wanting to own our home and the
    security for our famillies,it’s become a well driled and marshaled bussiness by the powers to be, the old days our well and truly over lenders and investors want to see a return on there investments and that’s it period you will see people been thrown out of there homes and the money they put into GONE the good will gift of money to help them out from relations and friends Gone.So watch out for the to good to be true deals in the long run they could bit you in the ass after all theses investors and bankers with all there propertys siting idle depend on you to make them wealthy by buying there bad portfolios.
    Good luck.

  2. Mickey at 12:30 am

    Yes I think first time buyers should be given any amount of money they want to buy large houses in the 1.1m euro range so as to boost the market and get property prices on the up again. It does not matter how much the house costs the important thing here is that the Banks and Developers are helped out of this mess. If 1st time buyers are given lots of money this will help. Also it does not matter if they dont have jobs to finance this because the pent up buyers who have lots of money waiting to hand it all over to the Developers are lucky to have jobs. Unemployment is not on the rise and even if it was money should be given to 1st time buyers to buy. Their parents should also take out 2nd mortgages to help them get a foot n the property ladder so that the economy will be boosted. It does not matter what debt parents get into so long as the Developers are paid. This makes perfect economic sense. Also All public sector jobs should be scarpped and wages cut in order to help private business get back on track again so that they will have the money to create jobs low paid jobs in the private sector so the unemployed are told how lucky they are. You see we need to loose jobs before we can create them and the best thing to do in between all that is to buy a house for 1.1 million euro. Any eejit would tell you that. This survey is great because it has all the solutions and answers and I am surprised that the Government dont know about it yet and start to immediate apply these solutions. Dont wait BUY NOw or you will NEVER own property and you will be left behind. Arnt the Estate Agents sick telling ye all that?. No but you wont listen to good advice from the estate agents instead you will listen to all that nonsense of not going near 100% mortgages. Give first time buyers a chance and allow them 1000% mortgages to pay the money to the Developers who are waiting to be paid by ye all. Dont leave them waiting any longer. Buy or else you will loose out.

  3. Mary at 5:29 pm

    While I agree with your comments about planning policies, I do feel there should be an incentive to encourage people to buy specific properties. The builders did make a fortune, and we are all mad at the government. But, in the meantime, houses and apartments are left idle, so why not give a break to people who are willing to purchase these properties. Make it worthwhile for the buyer – mortgage rates, free furnishing, etc – whatever it takes to get these properties occupied. It is a disgrace to see half empty estates and nobody taking responsibility for finishing what was started.

  4. Sarah at 2:11 pm

    I don’t feel even in the recession that things have improved for a single first time buyer. I still can’t afford to buy even a one bedroomed apartment as the prices haven’t come down enough in the urban areas. They are for sale in the rural areas but are lying empty because they are too far out. What frustrates me is that the developers buy the land for small money and then sell them at high prices to make a profit, that doesn’t help the single first time buyer to get their foot on the property ladder.

  5. Steve at 1:13 pm

    This survey is great news.It shows that the majority of first time buyers want to buy within the next year and that there is pent up demand to buy property,especially semi detached houses.
    Therefore the banks should be offering a temporary buy one,get one free policy for the next year only.So if someone buys a semi detached or an apartment,the bank should throw in a free apartment to clear the overhang of supply of apartments.Any first time buyers who don’t buy within the next year cannot avail of the banks buy one,get one free policy later on.This will cause a flurry of activity amongst first time buyers wishing to buy as soon as possible,thus boosting the housing market and propping up housing values-which will also help the value of properties on the Nama portfolio.Any apartments left over after a year should be rented over to local authorities via Nama for a nominal fee.If there is still some surplus of apartments left they should be demolished under Nama.
    The government should also consider employing a heavy hitter from one of the big estate agents to advise them on what financial incentives to offer potential buyers.This person should be offered a junior ministerial position within the Cabinet.

  6. sj at 1:10 pm

    Freemarket – everyone – including developers, builders, banks and governments, were happy to live with free market when everything was rising. Now we are in freefall, then same rules should apply. The asking prices for these apartments will, and should, reduce such that even those who would prefer to buy a house, will be tempted to purchase a flat as a first step. This will of course be a realistic price, reflective of sensible multiple lending by banks and therefore substantially below most recent and even current asking prices.

    No more meddling and incintives by government please – thats what led to this mess – no stamp duty for new builds, tax incentives for creches and hotels. Need I say more!

  7. donny at 12:23 pm

    Incentives on these types of apartments will only be useful when the market has finally finished falling.
    While the idea of providing incentives on these ‘shoebox’ properties seems like a good idea in a recession, its highly unlikely to have the desired effect.
    Given the scenario outlined by the author above, its tragically obvious that property prices are nowhere near the bottom and there is far too much uncertainty at the moment with regard to property taxes, interest rate rises etc..

    For this reason, I believe incentives should be offered to first time buyers on 4 bed properties and upward.
    3 bed properties should only have benefits in the form of a government lump sum paid 1 year after the date of purchase.

    Unless these shoebox properties can somehow be reconfigured in the future, it is likely they will only be useful to let to students. Or demolished.

  8. Sean at 11:55 am

    In general, the apartment’s built in Ireland over the last ten years are too small for human habitation. They should be left unoccupied until they are reconfigured by the developers, i.e. knock two into one or some such solution. When they are fit for human habitation, they will sell and the last thing we need is more artificial tampering with the market in the meantime. If we introduce incentives on the purchase of these small apartment’s, someone (other than the developer / NAMA) will be left with an unsaleable property going forward so it’ll just introduce a new problem.

    That said, the state is focused on bailing out the developers and banks at the expense of the all of us so it is probably a route they will consider!

  9. PB at 11:48 am

    It should be left to the free market, as it is self righting to the needs of the market.
    The above statistic shows that most people would prefer to live in a semi-d over an apartment. If planners are to encourage people towards high density living, they need to think more about quality of life and the minimum amount of space required for wellbeing.
    The issue with new houses, well self builds in particular, is that the reality of getting planning permission is in need of serious overall – to stop it being for “local people” only (surely this breaches some equility regulations?) or those with large wads in brown envelopes!

  10. Zap at 11:33 am

    Forcing people to buy a specific house or apartment type is a from of dictatorship and should be discouraged entirely. Furthermore; why should hard working people have to purchase builders mistakes? they lost their shirts, and over built; not a first time buyers problem really.

    What should be done is that the planning department should put a stop in place for all new development by the builders who have unsold buildings. This should be in place until their portfolio of buildings are sold. At the same time the planning department should also put some form of regulation in place to stop building in certain areas that are already built up, and where counties have a high amount of houses for sale.

  11. Greg at 11:19 am

    Yes, there should be an incentive for people to buy apartments, an incentive of price. A one or two bedroom apartment should be hugely cheaper than a 3 bedroomed house… and no doubt, the free market will ensure that is exactly what happens, unless someone jumps in and starts artificially inflating the prices of apartment, by offering tax incentives, etc (again!)

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