The Second Flight of the Property Earls & Land Barons

[mairteenpak]

So now the Property Developers walked under the high canopy in the midst of the procession, through the streets of the capital; and all the people standing by, and those at the windows, cried out, “Oh! How Valuable are our Developers new Developments! What a magnificent Investments there is to the mantle; and how gracefully the yields hang!” in short, no one would allow that he could not see the much-admired Value; because, in doing so, he would have declared himself either a simpleton, or unfit for his office. Certainly, none of the Developers various Projects, had ever made so great an impression, as these invisible ones.

“But the Developers have nothing of value!” said a little child.

“Listen to the voice of innocence!” exclaimed his father; and what the child had said was whispered from one to another.

“But they have nothing of Value!” at last cried out all the people. The Developers were vexed, for they knew that the people were right; but they thought the procession must go on now! And the Lords of the Banks and Auctioneering Houses took greater pains than ever, to appear holding up a train, although, in reality, there was no train to hold.

An so it was that the Property Crash took hold in earnest, like a Domino effect rippling throughout the land. What looked at first to the Courtiers as a soft landing had in fact become a hard landing, and by the end of the Summer, had taken on the character of a Crash.

The Banks and the Developers are trying desperately to prop them selves up, but it is far too late for their salvation, as the buyers will not yield, and are determined to face down the vendors who are waiting it out with the meter running.

The more aggressive developers who were building with other peoples money kept borrowing and building, while the old dogs who had memories of losing money on houses in the past took their foot off the Gas in 2005.

Now many of the developers will go broke and will have no option other than to find a new front to start again and buy up some of the property that will be foreclosed by the banks or to emigrate.

Up to 90% has been wiped off the face of some of the Land Banks. 25% of our economy is construction related, and all of that will practically disappear.

The State finances will be in some mess at the end of 2009

[clontarfblue]

Property (Residential) prices are still over-priced. Thankfully, developers are still making a profit, albeit with a smaller margin. It is inevitable that with House prices coming down to a healthy level, they will reach market equilibrium. Price of land will accordingly drop and hey presto developers margin will again start to steadily increase. Valuers development appraisals are still turning healthy profits (15-20%) for the majority of developments within the M50, with final sale prices in prime locations still steady.

My fears would be for those who bought in 'Commuter' regions who will find their homes value drop drastically regardless of the property market as a whole, but due to oil prices, and thus prices in prime residential areas close to the city (Ballsbridge, Donnybrook, Clontarf, Rathmines, Sandymount etc) will be very very safe.

[mairteenpak]

You can only still make a profit building inside the M50 if you bought the site a long long time ago.

If you don't get shut of the profit will evaporate

[lowtaxireland]

that's right lads...it's called boom and bust....but well spotted nonetheless....

[mairteenpak]

In the fullness of time we will regard the last decade as a time that provided, effectively, what were, massive subsidies to the owners of building land, by allowing them every advantage, and privilege our State could grant them, to indenture our people from 1997 onwards, to allow them extort, the maximum last drop of wealth from our people, by indenturing them for life to massive debt.

Under this system young people and not so young were held to ransom, despite not having any money, but were indentured by banks, for the wealth they could produce for up to forty years less any minimum sum required to keep body and soul together.

Many who could find a mate could not raise the necessary ransom, and yet more who could not raise a sufficient ransom , could not find a mate. Many who choose lower paid occupations, useful to society did so to their detriment to raise or pay a ransom.

For the Children of some small wealthy families it did not matter so much as their parents were in a position to assist with the ransoms.

Slavery has not gone away you know it has just changed its form.


Under our planning system it is the State that confers value on land by:

1) Zoning the land in the public interest from agricultural land to Building land.

2) Increasing the site coverage index and plot ratio (permitted density) on the land.

3) Creating scarcity of building land by prohibiting development on the vast bulk of land. perhaps the most valuable subsidy of all.

Under our Laws and policies it is the Landowner who takes all the benefit of this increased value, in some instances allowing them to hoard the zoned land, since it is untaxed, despite its immense value, and engineer a situation where the value of the individual build plot, or building footprint is several multiples of the cost of constructing the building.

Under this system our people must ensure that both members of a family must work, and that they make all kinds of sacrifices during their lives to pay the Developers ransom, which the banks are quite happy to provide finance for, secure in the knowledge that the system will not change, and that the security for the ransom is secure.

The older cohort of property owners are delighted with the system, while the new cohort of mortgagees and renters, must make all kind of sacrifices from their future labours such as:

1) giving up the luxury their parents enjoyed of inflating their debts away, in order to protect the savings of those who had bought earlier.

2) Forsaking the opportunity to have children

2) paying so much in servicing their ransom debt that they will not be able to afford to save for their own pensions.

3) making do with shoe boxed sized apartments because so much of their ransom debt was paid to reward the landowners, such that home sizes were shrunk to allow more of the ransom to be taken by the Landowners and builders.

To add insult to injury the government had devised a special tax on consumption, called stamp duty, which was supposed to keep prices down, and was to be paid on top of the ransom (ransom tax to reduce the size of the ransom) even though ransoms had risen to 12 times the average wage, from a historical low a ratio of ransom to earnings of 3 :1.

The notion of taxing the practice of ransoming in the forst place was not deemed appropriate for the economy, even though a billion euros had been spent investigating the planning system generally, and despite another few bob spent on Bacon Reports. Bacon aparently was a wise old sage who knew everything about what was good for the economy and a lot less about what was good for society and our people, just like our government.

It is very clear as to the benefits the landowners get, a massive increase in wealth while the consumers get a massive increase in debt.

The Government still did not see fit to impose any tax on those who were selling their properties for huge profits, bought with low ransom multiples.

Businesses who wish to set up in the state must factor into their costs a large sum to cover the ransom repayments, as cost they do not have ho bear in other countries or at east not to the same extent.

Now it seemed it was beyond the power of the people of the old Kingdom of of Ireland, (an ancient land that glorified and revered fallen heroes, who had thought to try and improve the lot of its people, though it had been ruled very badly in the past) to influence the FF rulers to make laws that would eliminate the Land Ransom system, even though FF told the people they were there to help them at every election.

However the hero was the little boy who had the courage to cry out, and allowed the people the courage to use a very simple solution, to leave the Ransoming Barons to be prey to their money lenders, and force them into exile.

We did not need the Ransom Barron's after all, as it was the Builders, Architects and Masons who actually do the work, and they would be happy to carry on building better homes now that the a ransom did not have to be paid for the land.

The other group who hoped to rule some day the FG clan slept through the whole thing and never even noticed the land ransom system.

[Nagy]

that's right lads...it's called boom and bust....but well spotted nonetheless....

You mean boom for the developers and bust for all those tied down on 30-40 year mortgages?

[digoutday]

You mean boom for the developers and bust for all those tied down on 30-40 year mortgages?

Dont worry, plenty of developers are in very big trouble.

[JCSkinner]

You mean boom for the developers and bust for all those tied down on 30-40 year mortgages?

Dont worry, plenty of developers are in very big trouble.

Why aren't they going bust a year into the downturn, then?

[lowtaxireland]

that's right lads...it's called boom and bust....but well spotted nonetheless....

You mean boom for the developers and bust for all those tied down on 30-40 year mortgages?

Right now, I'd prefer to be a guy in a steady job with a mortgage than to be some developer who is leveraged up the nuts and is only surviving because the bank is rolling over interest payments.

[mairteenpak]

Our Current Banks are wedded to a Dear Property Policy.

Any Government initiative that would reserve the benefits of zoning for the people of Ireland by minimising zoning profits would rip the banks security to shreds. Tough.

The Banks are expendable and will in time be readily replaced. The notion of the Nations savings being invested in providing loans to allow The Barons to Ransom Building Land will not allow our people to prosper in the long run. Those with the big loans will have to stay wedded to them or flee the Country in Default.

Their loans will be bought up by other banks. Deposits can be reimbursed after imprudent banks have expended their capital.

A new competitive economy will rise from the ashes. At all costs the new competitive economy cannot be sacrificed, to keep the Banks on life support, and to maintain the Development Land Ransom System, such that the Earls and Barons be kept in the style to which they believe is the just reward of their humble skills.

If the banks lending was related to primarily to the cost of the building as opposed to primarily the cost of the land, the value of land being a fleeting thing, due much to the black art of land valuation, which is really dependent on Government policy, and the scope of the imagination of Honest Bob, your local Auctioneer.