Want to start the process?

Let us guide you through the mortgage process

Schedule a free consulation at info@dowlingfinancial.ie, or fill our the form and we will follow up with you shortly.

Tell us about yourself

By filling in the form, you agree to our Privacy Policy, including our cookie use.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Home truths: Big time housing promises without taxes are hollow

What can you get for €16bn these days?

Well €16bn is the total amount estimated that Irish people will spend online this year. The Consumer Market Monitor (CMM) says this will mostly go on tangible goods, but also paying for flights and services like topping up our mobiles.

If you want to fly high with the dosh then Emirates recently demonstrated that you can grab 50 new Airbus A350s on those big shekels.

And as it so happens, the HSE committed to spend €16bn on health services in total for last year (it didn’t stick to it). And €16bn is four years worth of the entire national Universal Social Charge (USC) tax take. Also €16bn is 10… sorry nine… (correction again), eight (watch this space) national children’s hospitals. Plus €16bn makes up one fifth of the entire estimated cost of the bailout for all our errant banks. You get my point. It’s a mouth-wateringly gargantuan amount of cash.

Because €16bn is what I’d estimate that it would cost to build enough dwellings to house every one of the 70,000 families languishing on our social housing waiting lists. And only if we can keep the spend down to €230,000 per unit provided.

Lots of people (including yours truly) are convinced that the State needs to return to the traditional method of building and holding social housing as managed by councils from the 1920s until the 1990s. The fact that big investment funds are falling all over themselves to get into Irish housing right now (traditionally they never touched it) shows that the State could not only fulfil its social responsibilities, but it could also turn a profit for the taxpayer. We don’t have to rent social homes at peppercorn rates as councils have done in the past. Even with rent charged reasonably and in accordance with earning capacity, social housing has the capacity to become a decent long- term saving and indeed an investment for the State.

Problem one is that when it comes to building anything at all, we’re dealing with a Dermot Bannon civil service that can’t seem to stick to budgets in any national construction venture with roads, Luas, infrastructure and lately the infamous children’s hospital many times exceeding estimates (and don’t ask them for a printout!).

The second problem is that great big fat €16bn. Because when it comes to funding the State-build solution, this is not so much the elephant, but more like the brontosaurus in the room. For the Irish Exchequer it represents about €3,000, per every person living in the State today, or about €10,000 for every household.

I’m raising the subject of the €16bn because there’s an election coming next month in which housing and health will be key voter concerns. We’ll be doorstepped by prospective candidates for other potential Governments pitching their solutions. Some will pitch the State build-and-hold solution.

At this point we know the game form of the current incumbents. Fine Gael is a tax less party that has arguably moved slightly more to the right under Leo Varadkar. FG has pursued a largely private sector driven approach to solving the crisis, one which has generally eschewed the traditional State build-and-hold solution favoured by Governments here until the Margaret Thatcher inspired bargain bucket sell-off of State housing assets from the 1980s on.

Fine Gael favours getting funds, private landlords, NGOs, nuns and priests to do the running when it comes to solving the housing crisis. But by now we know where it’s coming from and what it stands for.

What we should beware of in the weeks ahead are the claims of other political parties. Some will promise a return to the State build-and-hold solution. And the first thing we need to ask them is where is the €16bn cash brontosaurus coming from?

The recent election in Britain and previous bouts here have proven that you can promise the sun, the moon and the stars; but that stating the obvious: that the sun, moon and stars cost money and maybe higher taxes, amounts to electoral hara-kiri. Perhaps even if it involves solving a social emergency. But next month exactly what we want to do about that crisis will land right back on our own front doorsteps.

When it comes to our healthcare system (the other great bugbear likely to feature on the doorsteps) things are a little bit different. There’s evidence that we squander resources, spending as much per capita on health as any other European country, but for less. An argument can be made that sorting it out doesn’t necessarily require more cash.

But in contrast, if we really do want an end to homelessness, children living in hotels, to low earners being rack rented; and if we want to support a State build-and-hold housing solution that some parties will pitch; then we all need to face a simple reality: that it must be paid for largely by us. That €16bn only covers those currently on the lists.

It doesn’t touch the 84,000 tenancies which Rebuilding Ireland estimates will be claiming Housing Assistance Payment (HAP) in the private rental sector by 2021. These are excluded from the housing lists as “solved”.

If you’re being asked to vote for a build-and-hold solution for social housing, understand that this involves a requirement for more tax to fund it, or else the cash must taken from somewhere else, like health or education. If someone doorsteps you and says otherwise, then tell them out flat that they’re a liar. Pants blazing and boxers a-flaming fairy tales.

But if it’s you that expects a new government to promise to build those social houses, but without you coughing up any more tax to get it done; then you’re the one with the delusions.

And you deserve all the promise-everything /fix-nothing governments that you get.

Latest news

Things worth noting

  • Mortgage holders here still paying double Euro average

    MORTGAGE rates in this country have fallen below 3pc for the first time in years. But there is scope for much deeper cuts, mortgage experts […]

    Read more

  • Revolution in fintech keeps the bankers awake at night

    Shake-up: Revolut and other fintech firms are forcing banks to increase their tech focus I was more than a little surprised at the response I […]

    Read more

  • AIB was always going to lose battle – it’s just a pity it waited so long to concede

    AIB was always on to a loser trying to defend its actions in denying 6,000 customers tracker mortgages. The bank tripped itself up and was […]

    Read more

  • Pensions reform should be high on everyone’s political agenda

    Graying vote has set political parties a-jitter hence the ill-judged promises. Pensions have became the unexpected issue of the election. And just for once, it is […]

    Read more

  • The changes still needed to tackle the banks’ bad management cultures

    Regulation: Unlike the UK authority, the Central Bank of Ireland does not have competitional law enforcement powers, an issue which deserves to be reconsidered Banking […]

    Read more

  • Paul Joyce: Mortgage arrears have been ignored but not solved

    Housing, homelessness, and healthcare have justifiably dominated the election so far. But one aspect of the housing crisis, however, that has received little attention is […]

    Read more

  • Home truths: The story of Eoghan and the home hoovers

    The big view on Ireland’s property market Whenever Eoghan Murphy is asked about his unforgettable term as Minister for Housing, one of the first things […]

    Read more

  • Typical household wealth has risen to €184,900 – but renters are losing out

    The wealth of households has shot up due to rising property values. But renters have very little wealth, according to figures from the Central Statistics […]

    Read more

  • Most people unaware about credit card interest rate they are charged

    The majority of Irish credit card users are unaware of the interest rate they pay, or how it is applied. And even those who say […]

    Read more

  • Divorce: what happens to the family home?

    For parting couples with property to divide, it’s complicated. When love leaves the building, what happens to the home? For most, the family home is […]

    Read more

  • Frank McDonald: Housing policy a litany of failure

    Current housing policies benefit wide array of monied interests Whoever forms the next government will have to deal with Ireland’s utterly dysfunctional housing sector and […]

    Read more

  • First-time buyers drive growth in mortgage values and volumes

    Banking & Payments Federation Ireland publishes figures for fourth quarter of 2019 First-time buyers drove increases in the volume and value of mortgage drawdowns during […]

    Read more

  • Housing crisis: What the rest of the world can teach Ireland

    High-densities, smart rental systems and container living – just some of the ideas we could adopt LOW-COST RENT Vienna, Austria Among the most discussed ways […]

    Read more

  • Mother (93) has right of residence upheld despite judgment against son

    Any failure to properly provide for Eithne Ryan ‘lies squarely’ with her son, says judge A 93-year-old woman is “perfectly entitled” to continue residing at […]

    Read more

  • Housing crisis: Seven solutions to Ireland’s biggest problem

    Cut building costs, incentivise buy-to-rent and overhaul property tax, experts advise ‘The Housing Fix’ is an Irish Times series exploring solutions to Ireland’s housing crisis […]

    Read more

  • Fianna Fáil may have just pressed the pause button on the property market

    The party’s new SSIA may cause a significant number of housebuyers to put their plans on hold for an unspecified period The man who is […]

    Read more

  • Court approves debt for equity swap insolvency arrangement

    Decision is first to be approved by High Court involving a debt for equity swap The High Court has approved a personal insolvency arrangement (PIA) for a […]

    Read more

  • Record €60m debt write-off for former quarry operator gets High Court approval

    A former quarry operator has had a €60m debt write-off approved by the High Court – the largest ever under personal insolvency legislation. Enda Patrick […]

    Read more

  • State-backed mortgage scheme hikes interest rates steeply despite bank cuts

    The interest rate on the Government’s Rebuilding Ireland Home Loan product has been increased massively. Rates have shot up by up to 0.75pc at a […]

    Read more

  • One in 10 mortgage arrears cases involve separated borrowers – BPFI

    Banking lobby group calls for State to introduce measures to help separated borrowers. About one in 10 mortgage arrears cases involve borrowers who are separated, […]

    Read more

  • In your pocket: Switching mortgage can bring major savings

    Rates are falling and lenders are keen to offer better deals – it’s easier than you think. Up to 160,000 Irish families are out of […]

    Read more

  • Mortgage interest rates dip but remain more than double euro-zone average

    Central Bank statistics show weighted average interest rates on new mortgages was 2.9% in November. Interest rates on mortgages taken by Irish consumers were lower […]

    Read more

  • New buyers pay €2,000 a year more than rest of eurozone

    RIP-OFF mortgage rates in this country are costing new home buyers €2,000 a year more than our European neighbours. New figures from the Central Bank […]

    Read more

  • Pensions deliver decade-best growth of 20.6% in 2019

    Zurich Life tops peers as funds recover from calamitous end to 2018. Irish pension funds delivered bumper returns in 2019, making it the best year for investment returns in […]

    Read more

  • Another year of dysfunction ahead for Ireland’s property market

    Looming general election and UK-EU trade talks add to uncertainty for developers. With the new year now a week old and a raft of predictions […]

    Read more

  • Responsible Homeowners Betrayed

      Thousands of responsible homeowners have been betrayed by the sale of their mortgages by PTSB into a bond fund which will be serviced by […]

    Read more

  • Revealed: Ireland’s most expensive streets and their €2m plus homes

    Daily growth of €15m in value of housing stock fuelled by new supply rather than increasing prices, writes Wayne O’Connor A leafy Dublin street sandwiched […]

    Read more

  • Harsh austerity ‘imposed on Ireland’ by Berlin, says ex-official

    Republic caught in crossfire between Germany and other bailout states   Ireland was hit with unnecessarily harsh austerity measures a decade ago at Berlin’s behest, […]

    Read more

  • Value of residential property in Ireland up by 5.3bn euro in last 12 months

    SEVEN HUNDRED AND fifteen properties worth €1 million or more have been sold in Ireland so far this year, according to the latest Wealth Report from […]

    Read more

Want to start the process?

Let us guide you through the mortgage process