FF to Stiff the Poor with borrowings to save Developers

[mairteenpak]

Fianna Fail plan major expansion of local authority mortgage lending, to low and middle-income first-time buyers is expected to form the first step in a government programme of economic initiatives.

The government will tell the Irish people that this measure is an economic initiative designed to stimulate the economy.

The Government is either very stupid or very incompetent.

Raising income limits to allow more people to qualify for local authority loans, is folly. What is required is to allow the market to provide housing to suit the budget of our people.

This can be best done by allowing prices to fall to a level at which people can afford to buy them, with their current incomes, which are set to decline in real terms over the next few years. The construction industry will be come active again when this is allowed to occur, and when measures are implemented to deter hoarding of building land.

A non intervention policy is the best way to achieve this. The affordability of housing was of little concern to this Government over the last decade, while property inflation fueled a tempory tax bonanza, that kept bums in mercs, and at the same time undermined the compeditiveness of the economy.

To use tax euros or borrowings to intervene in the market at the moment would benefit the developers in disposing of excess housing stock. It would burden purchasers with higher levels of debt than they would face if property were allowed to find its natural equilibrium. It would be a waste of exchequer funds as price support cannot prop up the market in the longer run.

The nonsense of shared equity in housing with the government taking a share of the property is a complicated device by which the government borrow from the poor in the longer term as the poor end up paying more for their home, than they would otherwise need to do, all to the aid of the Builders.

To add insult to injury this hair brained scheme will not stimulate construction employment, as the artificial demand would merely assist Developers to off load existing excess houses at a huge premium.

The scheme is merely an addendum to the Privatisation of the National Debt Policy through dear housing, financing once off exchequer buoyancy through long term private borrowings


http://www.sbpost.ie/post/pages/p/story ... qqqx=1.asp

[HanleyS]

We have John Gormley telling us that this won't interfere with the ongoing corrections in the market.

I don't believe you John, you've just lost my third preference vote*.

[size=7]*If I'm home for the next GE, and I won't be paying taxes in Ireland again if the builders get their dig-out.[/size]

[Harpo]

They are not stupid or incompetent. This is very deliberate. Falling house prices is bad for property developers ie FF. Therefore they wish to keep housing overpriced through an extension of credit so as to load more debt on to people and line FF's pockets... errr I mean the developer's pockets. Of course this is extremly short-sighted and only aims to create a new smaller bubble that will burst even sooner than the previous one. But hey who cares? They've ************************ed us over so much already, they might as well continue

[Lennon]

Property prices MUST be allowed to find their own bottom level without any Government interference. I as a taxpayer do not want the property bubble reinflated to benefit the few at the expense of the many. At present levels property prices will need to fall by a further 50% to be at the levels where they should be. Then and only then should the Government start offering any kind of assistance of the sort spoken about in this article.

[cyberianpan]

Yes but as you point out they'll likely print money to do this(Privatisation of the National Debt Policy )

So they'll spin it as "saving the poor"

The poor tend to have a poor understanding of economics

cYp

[mairteenpak]

The CIF will have laid it on heavily to government that billions of taxes will flow to the coffers as the property overhang is disposed of.

Any increase in assistance to buyers that increases their property debt, or makes it easier to get into property debt is a price support measure. The mere signal from the government that they intend to pursue this policy, interferes with the market.

Better to say nothing and allow prices to fall to bring to bring about the correction quickly. A quick transition would bring certainty to the market and facilitate trading in property to recommence.

I did not infer that the government would print money. The debts that people would be encouraged to undertake in a FF/CIF supported market would be very real as would the profits derived.

The Buyers/Mugs would get the increases Debts
The CIF members would get the increased Profits
The Government would get Tax revenue at the expense of competitiveness and more long term negative equity.

[Norfolk Enchants]

They are not stupid or incompetent. This is very deliberate. Falling house prices is bad for property developers ie FF. Therefore they wish to keep housing overpriced through an extension of credit so as to load more debt on to people and line FF's pockets... errr I mean the developer's pockets. Of course this is extremly short-sighted and only aims to create a new smaller bubble that will burst even sooner than the previous one. But hey who cares? They've ************************ed us over so much already, they might as well continue

I'm agreeing with Harpo and Marteenpak

A question to Fianna Fail

IS THAT ALL YOU'VE GOT????

They've been accused of an over dependence on the construction boom, being in the pocket of developers, throwing fuel on the blazing property market and of having no other valid economic policy. NOW THEY ARE ABOUT TO PROVE IT!!

[Lennon]

They are not stupid or incompetent. This is very deliberate. Falling house prices is bad for property developers ie FF. Therefore they wish to keep housing overpriced through an extension of credit so as to load more debt on to people and line FF's pockets... errr I mean the developer's pockets. Of course this is extremly short-sighted and only aims to create a new smaller bubble that will burst even sooner than the previous one. But hey who cares? They've ************************ed us over so much already, they might as well continue

I'm agreeing with Harpo and Marteenpak

A question to Fianna Fail

IS THAT ALL YOU'VE GOT????

They've been accused of an over dependence on the construction boom, being in the pocket of developers, throwing fuel on the blazing property market and of having no other valid economic policy. NOW THEY ARE ABOUT TO PROVE IT!!

Now that the fire has gone out even FF will not squander more resources in a futile exercise of throwing fuel on it. Their developer mates are in TROUBLE and there is nothing they can do about it.

[carlovian]

Lennon,

propping up the market is exactly what FF will do.

Disguised as a way of helping first-time buyers on to the ladder (or snake) watch them raid the coffers
for one last push at the good times.

Dont ever underestimate the influence the construction industry has on FF.

[returning officer]

yes, its far better to over-estimate the construction industy's influence on ff as happens on every second post on this site. But i agree, this scheme should not be made mandatory for first time buyers, who should be allowed their now space and time to make the most important decision of their lives without being patronised.