Secret strategy of high house prices forced high savings

[patslatt]

I have a conspiracy theory that Dublin city's planners were secretly encouraged by the government's economic strategists to limit high rise and high density housing developments.

This was done to emulate a key element of Japan's postwar industrial strategy. The Japanese government made it very difficult to acquire farmland for development,deliberately driving housing prices sky high. The goal was to create a huge pool of capital available for business investment by forcing Japanese consumers to save a very high percentage of their incomes for downpayments on houses.

Is there a better explanation for needlessly crazy Dublin housing prices?

[meriwether]

I have a conspiracy theory that Dublin city's planners were secretly encouraged by the government's economic strategists to limit high rise and high density housing developments.

This was done to emulate a key element of Japan's postwar industrial strategy. The Japanese government made it very difficult to acquire farmland for development,deliberately driving housing prices sky high. The goal was to create a huge pool of capital available for business investment by forcing Japanese consumers to save a very high percentage of their incomes for downpayments on houses.

Is their a better explanation for needlessly crazy Dublin housing prices?

That would imply a strategy.

[rockofcashel]

That might have worked in Japan, where there was a better regime of financial and fiscal responsibility.. but it was totally undermined here by irresponsible banking practices.

I doubt if any more than 5% of mortgage buyers in the last decade had to save 10% of the mortgage price as a downpayment

We've inflated property prices on the back off..

dodgy form filling
dodgy pay/income slips
the 100% mortgage
and other shady banking practices

[Compound Fracture]

I have a conspiracy theory that Dublin city's planners were secretly encouraged by the government's economic strategists to limit high rise and high density housing developments.

The Stasi are camped down at Heuston Station, apparently.

Could they have something to do with it??

[Sidewinder]

Firstly, Japan has very very little arable land and needs every inch of it to feed its teeming millions, hence high land prices. Secondly, ummm, savings? What feckin savings? The Japanese save. The Irish just load up on humungous amounts of credit.

Irish house prices reached stupid height because of Greenspan's Liquidity Splurge, deregulated Bandit Capitalism abandoning all prudent lending criteria, a cultural obsession with property, and FF in power looking after their developer mates.

The bubble could have been moderated (if not stopped in its tracks before real damage was done) if sensible measures had been taken around 2000. Remember Bacon?

[bobbysands81]

the 100% mortgage

Cheap and available credit was one of the main driving forces for the property boom.

[ibis]

In any case, vast amounts of new houses sprang up around the country. If it was a cunning plan, it was one of Baldric's.

[Dreaded_Estate]

Or its a bubble!!!!!!

[Sidewinder]

Or its a bubble!!!!!!

It's wearyingly predictable, all of this. The muppets that got us into this mess (i.e. the population) are now running around like headless chickens looking for scapegoats. Eventually the mob will pick something - the US, the banks, some conspiracy or other, anything - and pin the blame on it, rather than taking a good hard look at themselves and the society we have built here over the last 15 years.

Nobody forced half the country to get into stupid debt in the stupid hope of getting stupidly rich in a stupid amount of time.

Cheap available credit won't do any damage at all if the populace are responsible enough to be trusted with it. Instead the Irish cut loose like a bunch of spoiled brats locked in a sweetshop.

Irish society, I blame you.

It's particularly nauseating when a champion of Privateer Bandit Capitalism like patslatt starts putting on the beal bocht and looking for scapegoats to deflect attention from the fact that a properly-regulated banking sector would never have been allowed to fire out 100% 40-year IO mortgages in the first place. Privateer scumbags and their "deregulation" fanaticism is one of the root enablers of this entire mess.

[Tizona]

Well said.