Coleman: Have we learned from the mistakes?

Political edior Shane Coleman takes a look at the Red C poll in relation to mortgages and rent

There's been a lot of focus on the various election promises of the political parties, with the question being quite rightly asked as to whether the mistakes of the Celtic Tiger have been learned.

But what about us the voters? Have we learned from the mistakes? A glance at the Red C/Newstalk poll suggests not. Almost four out of five people want to see a review of the Central Bank’s mortgage rules, requiring buyers to save 20% of the price of their house, to “make it easier for buyers to get on the property market or to trade up”.

On one level that is understandable. People see the rules as tough and a barrier to first time buyers in particular buying homes.

However, the reality is that if those rules had been there during the boom years, it would have saved a huge amount of heart ache for many people who bought houses that they ultimately couldn’t afford.

It might also have kept a lid on soaring house prices. The new rules are certainly demanding, but they will likely end up saving home buyers tens of thousands of euro on what they pay for houses – indeed there is evidence that their introduction were a factor preventing another bubble in house prices emerging last year.

“Reviewing” the rules will certainly make it easier for people to get on the property ladder. But what price will they be paying and how stretched will they be when it comes to meeting their repayments?

The argument about making it easier to get on the property ladder was always used in favour of the old €3000 buyers’ grant, yet every piece of research done showed that the grant was simply factored into the house price by builders. It was effectively a subsidy for developers.

It’s hard to know what to make of the finding that 86% of people want measures to promote long term rental agreements in Ireland such as tax incentives for landlords and better protection for tenants etc. Of course, it’s desirable to see greater protection for tenants, as exists in other countries. However, the very mention of ‘tax incentives’, for any investment in property, should make us all shiver. Such ‘incentives’ were a key factor in the bubble of the noughties, along with the aforementioned lack of lending rules.  

What do they say about those who ignore history being condemned to repeat its’ mistakes?

For more on the findings of the Red C poll, click here.

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