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Property pages…  October 6, 2016

Posted by WorldbyStorm in Uncategorized.


Karl Deeter is back in the SBP property section. And he’s still concerned. It’s interesting because one could ascribe to Deeter a rather reactionary view of matters. Certainly reading his piece he draws a comparison between populations on the island in the 1800s and now – suggesting that despite our housing shortages we are still nowhere near where we were in the 1840s, with a population of about 8million on the island. True enough, we’re at a little over 6 million North and South. Whether such a comparison has any explanatory power at all is another matter entirely.

Anyhow he notes that economist Fred Harrison has demonstrated that in the UK housing cycles have happened time and again and he argues that ‘despite this, policies to prevent it don’t arise – mainly because they are not politically palatable. Now, I hear you say that one cannot really compare such cycles across such lengths of time due to changing political and socio-economic conditions – mass suffrage, consumerism, etc, etc. And I think you’re right.

But at root Deeter’s analysis is that these crises or cycles, or crises on foot of the cycles, are inevitable. And curiously despite the evidence of these cycles in the UK he takes us here in Ireland to task, for apparently…

We don’t do stick in Ireland, we only like carrots. The reason is that the biggest block of voters are the incumbent owners, a point I made in this column last week. 

If we increased property tax, but with a caveat that it soul go towards building social housing and local infrastructure we would have a very different society today. if we taxed every square inch o land, it would help to inhibit high land prices by creating a a painful carry cost. 

He suggests that ‘…farmers would cry murder… local authorities would be upset, religious orders, would naturally be bleating…’

And… ‘even if we made the decision to end this debacle tomorrow, it would still take years for the policy to kick in. And in a world of instant gratification and single electoral term thinking, along with opposition promise to ‘end it’ if you vote  for them, and the solution would be a dead duck.’

Now I’m a practical kind of a person and I loath political thinking (particularly on the left) where if we only ‘believe’ a little more, are more ‘optimistic’, all will be well. But… I also intensely dislike  the idea that something is impossible from the word go and not worth attempting, and in that respect his conservative, cautious, sceptical approach, seems to me to be a proscription for doing nothing. So, fundamentally his is a laissez-faire approach for all that he bemoans the fact that eventually ‘developers … will go ahead only on project with a high likelihood of success, and then, without known it they’ll all come to the conclusion that everything makes sense again. This will trigger the boom phase, when all of the lemmings go into hyper-supply mode. Cue a few glory years before it all keels over again. What comes after that? read the label on the green jersey. “Ireland: rinse and repeat”.

Of course, as an alternative we could just have significant state investment in building social housing and rent controls like many other European states – no? Or is that just crazy talk?


1. EWI - October 6, 2016

So, the takeaway is that this was just lengthy concern-trolling on Deeter’s part? Do I have it right?


WorldbyStorm - October 6, 2016



2. RosencrantzisDead - October 6, 2016

I have not read the SBP piece, but does Karl mention the role of mortgage brokers like him play in this endless cycle of boom and bust?

As a matter of probability, I doubt it.

I see elsewhere he is complaining about the Central Bank rules (the ones that require a significant deposit before one can avail of a mortgage). Said rules were designed to prevent an escalation in bidding between, by restricting how much money one could obtain from a financial institution. He engages in the same sort of concern-trolling: we definitely need regulation, but we are unable to do good regulation in Ireland. The rules need to be ‘looked at’. The implication being rather clear.

He also complains about planning laws, believing that it is inequitable that a person can pay a mere €250 to prevent a €250 million development and would like to see people pay more to present their views to the Planning Authority. To put is succinctly, this is gross misunderstanding of how planning law operates and how planning decisions are made. But nevermind that, it’s busy-bodies and nasty residents who are causing the housing crisis.


3. gendjinn - October 6, 2016

The sole acceptable conversation about property taxes is figuring out their abolition on personal residences.


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