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Heiko Gross draws attention to the fact that a leading campaigner for debt forgiveness is simultaneously campaigning for looser credit rules. A quick check shows that this contradictory position is shared across many political parties.

Are we suffering from collective memory loss?

I ask myself if this is a conspiracy on behalf of those who want higher property prices or if advocates for looser credit simply do not understand simple economics?

We are subject to convenient anecdotes of individuals and couples outbid on their dream property because of limits on credit. It is patently obvious that increasing available debt will merely increase competition for the same properties and hence the selling prices.

We are told that young people are forced to spend money on rent because the “average property” is out of reach and hence they cannot save. Whatever happened to the starter home? Are there no “below average properties” available?

The inability to learn from our mistakes is nothing short of tragic.

Matthew Glover,
Co Dublin.

Housing crisis and mortgage rules (Irish Times letters page)

Thanks PK

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28 thoughts on “Debt Knell

  1. forfeckssake

    The “average” home should more accurately read the “typical” home. And there are no below typical homes.

    1. Mayor Quimby

      The point is that the vested Interests (and clowns like David Hall and Una Mullally) tell us that you need a deposit of X to buy the average house in Dublin, and renting means you’ll never save the money.

      Buy a studio/apartment instead of renting, pay down your mortgag/build equity then you can buy an average priced home

  2. Anomanomanom

    Prices have to rise, its that simple. I’m lucky I can afford my property and comfortably at that, but some young couples bought and although they can afford the mortgage they can’t get it down enough just to sale it with a enough left, after clearing the mortgage, to have a deposit on what will be their actually home.

    1. Optimus Grime

      I think he’s talking about starter homes or something. And anyway what is a starter home? Is there an ending home?

    2. ahjayzis

      So we just work to raise the price of the home forever? Keep going on and on until it’s what, 100’s of times the average income? So that we can all get mortgages but never actually pay them off?

  3. moould

    Heike might be German but there is nothing more Irish than pointing the finger at someone but refusing to actually name them – who is the ‘leading campaigner for debt forgiveness is simultaneously campaigning for looser credit rules’?

  4. Rainy Day

    The letter writer is spot on. While being tragic it is also quite deliberate. The Government need prices to rise as that decreases the provision required by our banks, they are therefore more ‘profitable’ and easier to sell.
    It is of course, in a normal society, lunacy to wish for higher prices, but in our distorted property market so many people have entered the market and different points in time and have a vastly different 25 years ahead of them despite living in similar properties.
    Also prices do not ‘have to rise’, a small rise is normal and healthy but not the rise some people are hoping for.
    We are now at the start of another property bubble, in around 10/15 years time we could easily have another huge drop in price, but by then most of those currently in Ministerial positions will have retired on nice pensions so it won’t be their problem.

    1. forfeckssake

      People want prices to rise because there was never any write down of mortgage debt for people in negative equity and we had the unsustainable farce of interest only repayments for years which ultimately only increases the cost of the mortgage.

        1. forfeckssake

          Didn’t say it did. I said one thing AND then a second thing.

          Negative equity affects a persons ability to sell and in some cases left people trapped in a situation where the best option was to make interest only repayments and hope for the market value of their home (and their income) to go up.

  5. Robert

    Whatever happened to the starter home? Are there no “below average properties” available?

    Exactly the problem, right there. No Heiko there are not.

    1. Increasing Displacement

      “Whatever happened to the starter home?”

      The starter home was and is an idiotic idea. Buy a house, buy when you have the money buy once ,unless you have to move for whatever reasons.

      1. Caroline™

        It’s an idea that’s fallen out of favour, because lots of people got trapped in what were supposed to be temporary homes. But it’s not necessarily a bad concept in a functioning market; it may be useful or even essential.

  6. Junkface

    The inability to learn from our mistakes is nothing short of Irish more like.

    The Govt like the broken system, they don’t want cheaper rents coming through or a steady supply of affordable houses. They (Gov’t Ministers) are landlords, they own multiple homes and they are doing very well in this housing crisis. The game is nicely rigged in their favor.

  7. Bort

    Ah the starter home, went like this: Grandsh lads, sure just buy an ould 2 bed apartment in City West for 250k (off the plans of course), you’ll sell that on for 50k profit in a year, then you can buy a house in Ballycullen , then in a couple for years make a 100k on that, then you can buy that 3 bed semi in Knocklyon for 500k and live there for the rest of your life, and sure maybe buy a second apartment to rent out. How much do you earn a year? 40K a sure go on, we’ll start you off an a 100% mortgage for your starter home!

    Some craic that was! Panned out for………….who?

  8. Louis Lefronde

    Oh when will the Irish learn their ‘beloved property market’ is a fraud based on anti- competitive practices? It’s not hard to figure out!

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