Transformation of housing policy: Ireland’s housing bubble will never happen again

Transformation of housing policyYesterday, at the 2011 Housing Practitioner’s Conference in Mullingar, Housing Minister Willie Penrose unveiled the Government’s radical plans to transform policy in the sector. Speaking at the conference he said; Ireland’s housing bubble will never happen again.

One of the main reasons of the new framework for the housing policy was in response to current and emerging conditions in the sector, taking account of the dramatic cycle of rapid growth and sudden collapse in the residential property market. The policy aims to set out the Government’s approach to regulation of the wider housing market and is all about “providing people with more choices.”

Taking a complete U-turn on policies of the last decade that contributed to the housing bubble and one that played a major role in our economic downturn, Minister Penrose said that “the Government would aim to promote a more balanced view of the housing market and of housing generally. We recognise and welcome the fact that home ownership will continue to be the aspiration of the majority of households. But there are other households who either do not want or may not ever be in a position to own their home. We need to provide choice for such households. This choice will be on the basis of household circumstances and need. The development of a vibrant, viable private rented sector – as a real alternative – is essential”.

Have your say:

  • Will the new framework for the housing policy help return stabilisation to the market and prevent future property bubbles?
  • Is renting / long term renting a more viable and financially better option than buying? – a method used by many European countries.

18 Comments

  1. Aiden Lambert
    Posted 17 Jun at 12:59 pm | Permalink

    In the light of a catasrophic failure on the part of the free market to provide reasonably priced, economically viable housing for this country’s population I find it astonishing that a Labour Minister should announce that the solution to the problem will be the revival of the private landlord system. Unbelievable.

  2. Flex
    Posted 17 Jun at 1:05 pm | Permalink

    This is all very well for those planning to buy or rent now for the first time, but for those of us in massive negative equity, moving is a non runner. I bought small, very small at the height of the bubble. The mortgage is small and affordable, no problem there. I bought in under the Shared Ownership Scheme and the real downside to that scheme unforseen at the time was that the Council’s share stays at the purchase price whereas my 75% drops 60% in value. The government constantly tell people and the banks to talk to each other. I have been trying to arrange a meeting with my council for weeks to no avail. I simply want to sell the house, buy another and convert the equity to a seperate loan paid in tandem with my new mortgage. I am not looking for a cent relief. My decision, my debt. That the state itself, ie the Council will not even sit down with me (or answer the phones most days) is shocking. This SO scheme gets little attention but was popular during the bubble as with rocketing prices, people like myself were keen to get ‘on the ladder’. Slippery snake more like in hindsight!

  3. Posted 17 Jun at 1:26 pm | Permalink

    It should be possible to renegotiate a current mortgage without having to apply for a new one. I am managing to pay the current one but would like to put it over a longer time frame but would have to reapply and I would not be accepted for a mortgage now.

  4. Maria
    Posted 17 Jun at 1:30 pm | Permalink

    A dramatic revision of the property market is needed. People who have massive mortgages need to be offered a restructure to turn the loans into longer term loans so they can have a decent life and limit stress. The rental market too needs to be rent controlled so those who rent are able to survive and have some benefit to never owning a property. Its a large task but an achieveable one for the right person or team of people.

  5. Seán Ó Domhnaill
    Posted 17 Jun at 2:13 pm | Permalink

    In view of disproportionate power of landlords, developers and builders in Irish society since the foundation of the State, it is difficult to see any government making changes to the system that would curb the profiteering of these people.

    Many people—myself included—would be happy to rent long-term but most landlords favour short-term agreements. You can be thrown out on a whim.

    Also, many rental properties here are of a much lower standard and smaller size than in most European countries.

    Maybe the Minister should also look at reforming land ownership and implement the Bacon report.

  6. j.doherty
    Posted 17 Jun at 2:38 pm | Permalink

    Just wondered how we could be helped to move from england & rent a property in ireland? both are pensioners & would have to have rent allowance, also is there any financial help with a move

  7. George
    Posted 17 Jun at 4:20 pm | Permalink

    Property owners are in a position of privilege afforded to them by antiquated land ownership laws originally drafted by landowners themselves. These laws dont work. We need not just rent control but land price control. How does one justify buying a piece of land only to profit privately while leaving a trail of economic damage for us citizens to pay.

  8. Cameron
    Posted 17 Jun at 4:32 pm | Permalink

    Ireland made the mistake in housing of followng in the footsteps of the United States, where unscrupulous lenders sold the man on the street housing he could
    not afford. The truth is a house is a wasting asset that constantly requires maintenance. Many owners are “slaves” to their houses, cut don’t know it. Only
    a fool wants 5 bathrooms.

  9. Peadar
    Posted 17 Jun at 4:50 pm | Permalink

    With all the empty houses and warehouses – why not give some unemployed people a short course in hydrophonics and horticulture, then a small grant and start putting these units to use growing mushrooms etc., It is clear that our food industry is growing so why not tap into it – just an idea.
    Peadar.

  10. john geraghty
    Posted 17 Jun at 4:55 pm | Permalink

    yes, it will return stablisation but very slowly.

    it’s nice when the mortgage is finished to have a few years of a few euro extra in your account.renting you’ll be paying forever and nothing for the children.so the answer is no

  11. Gerard
    Posted 17 Jun at 10:56 pm | Permalink

    In some european countries houses are rented from Housing companies,these companies are strictly controlled by government bodies the rents are kept to an affordable level.If you were to find yourself out of work you would get rent subsidity so it is a good system.I think there is nothing wrong with renting for a full life time in such a system.

  12. louperlman
    Posted 18 Jun at 12:41 am | Permalink

    Renting would help some people find affordable houses, without the major responsibilities of ownership. Roof repairs, frozen pipes, the usual nuisances.
    The downside for the property owner is the fact they may wish to sell, rather than rent, but can’t find a buyer because banks don’t want to lend. I have a pleasant house I no longer need – too large for my diminished family – but if I find a buyer I may have to accept what I paid for the house in the first place, and thus lose any value from the numerous improvements I made to the house in the first place. I accept this, because the banks shafted us all and recreated the world in their own primal image, even as I doubled the worth of the house with improvements. So I take a loss on what was never supposed to be a gamble in the first place. (And was never a gamble for the bank either, because we bailed the ba*tards out and fed their bonus ethics.) Anyone looking for a five bedroomed house with a granny flat and a paddock and stabling, priced cheaply – funny, I know of one.

  13. wally
    Posted 18 Jun at 4:04 am | Permalink

    Is it not amazing that although rent in some country areas has dropped nearly 50% in line with the drop in property prices,the management agents are still charging the same maintenence fees as at the height of the boom!When are management agents going to be regulated?

  14. Ally McCoi
    Posted 18 Jun at 11:08 am | Permalink

    This wretched lil mickey mouse ofa country cost me my livelihood. Impeach every single last one of the robbin FF. And anyone called Healy-Rae, Lowry or Flynn anaw.

  15. Posted 18 Jun at 11:21 pm | Permalink

    check out the web site http://www.catherinecoleman.com and go to the Photographic archive in Temple Bar and see the book for ghost estates with a slide show. This is only a small snap shot of what is killing our land, our people with mortorages. long travel to work and no time for each other. There must be more to life I blame you bertie, you could and should have stopped. I have one house I live in and that is all I need and why is that so wrong

  16. Richard
    Posted 20 Jun at 12:30 pm | Permalink

    A private rental market is indeed an essential element. However it cannot be controlled by private landlords. The model used in many European markets is not one of private landlords but rather one of insurance companies (obliged legally) investing in private developments priced ‘affordably’ and regulated. While this may mitigate against people owning their own home, it does avoid gross property speculation and is a good cash flow solution for those not in a position to risk capital.

  17. Robert
    Posted 22 Jun at 3:22 pm | Permalink

    While I agree with ‘affordable’ renting, I have always been of the opinion that renting is dead money. Also if the landlord wants the rentee out or wants to increase the rents the rentee has very little rights. I am a 50 year old single male living with my family as since I was 25 each and every year to date I had hoped of owning my own home. However since I never had a high powered job which earned me loads of money, every time I had enough for a deposit, the goal posts had been moved further away. Then came the ‘boom years’.
    I asked to be placed on the social housing register, but I was told to my face by a housing official that since I wasn’t an unmarried mother I would never be considered for housing. Then a number of years ago I found a site for sale, not very expensive but just out of my financial reach. I approached a local TD, explained my circumstances and asked could he help me. He did nothing about it and the site was sold to someone else. Perhaps had I offered a brown envelope, things may have been different.
    The point I am making is; in this rip off country with taxes coming out of our ears and new taxes being dreamed up all the time, how on earth is someone like me ever going to own a place of our own? Its about time, the government woke up to reality, stopped stuffing their pockets with our money and looked after the people who really matter – those of us that pay their wages.

  18. Kevin O'Connor
    Posted 23 Jun at 9:22 am | Permalink

    Given the dysfunction of the Irish political establishment and Property it’s unlikely they will get it right this time. The neurosis that drove the fantasy boom will be as extreme in pendelum swing, already evident in ‘punishing’ landlords with a rake of recent taxes. The likely outcome will be severe contraction of property for rent ( look at the amount available on ‘distress sales’) so that in a few years ghost estates are likely to be ravaged slums occupied by unemployed wanderers, who will not be given shelter elsewhere.

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