March 10, 2016

No wonder the nation is going through the roof over housing shortage

Posted in Irish Independent · 93 comments ·

The other day a well-known publican in Dublin 2 who runs a number of thriving places told me the housing crisis is now so acute in the city that staff simply can’t work for the wages he is offering. The same story pertains across all service sectors in town. A lack of housing is stifling growth and opportunity.

The average Dublin renter paid €1,275 a month for a house, or €1,152 for an apartment, in the summer of 2014; they are now paying €1,387 for a house and €1,260 for an apartment. And prices are continuing to rise. Outside Dublin, things are more affordable but only because there are far too many houses built in the wrong places, where no one wants to live.

House rentals outside Dublin increased from €656 to €695 a month in the past year, and for apartments from €623 to €660.

So we have a massive housing problem.

What is wrong with this country? Why can’t we get the housing market right?

The Irish housing market swings violently. Either we are building too many houses in the wrong places or building too few houses in the right places.

It lurches between having too much money thrown at it to having too little. It is characterised by 30pc swings in rents on the up and the downside and mass hysteria, leading to a generation of one-off landlords who were promised riches but were left with negative equity, many still technically bankrupt.

We also have a banking sector salivating over the prospects of renewed hysteria that will drive its profits, but which is so terrified of having “skin in the game” that it lobbies to make sure there is no such thing as ‘non-recourse mortgages’ which might make them think again.

Now we are in a situation where there is an acute accommodation shortage. Here are the facts.

Since 2011, Dublin rents have risen by 35pc, including a 10pc hike in the last 12 months. One in five Irish people now live in rental accommodation, more in urban areas – a doubling of the total between 2006 and 2011. Meanwhile, house completions have collapsed from 93,419 in 2006 to around 8,000.

Put bluntly, more people are paying more to fit into less space. By any standards, Ireland has a housing crisis.

The reality is that the cost of this crisis is being borne not by banks, landlords or developers but by renters and first-time buyers. That’s the truth. Say it loud and say it clear – the cost of the massive housing market failure is being shouldered by renters. That’s it, plain and simple.

Numbers renting are rising rapidly in urban areas, with 25pc of homes in the capital being rented. Interestingly, old habits die hard because the Irish reluctance for long-term renting remains, with three-quarters of people planning to exit the rental market within a year or two and a mere 17pc declaring themselves life-long renters.

Even these people are doing so purely because they are unable to afford a house; even though new housing starts jumped to 8,000 in 2015, which represents a rise of 19pc from 2014 – but we are starting from an extremely low base and indeed the trend slowed into year-end.

While this shortage exists, not surprisingly, evidence of the property price recovery is spreading nationwide.

House price inflation outside Dublin has finally outpaced the capital, but houses are way beyond the pockets of most first-time buyers and, while renting is not secure in the same way as it would be in, say, Germany, it is the only option.

The State has tried to make renting more secure for people by introducing a number of measures. For example, landlords’ ability to raise rents has been restricted to once every two years, instead of annually. There is now a longer notice period before a lease can be terminated and a longer notice period before rent hikes.

And, finally, there is now a deposit protection scheme whereby deposits are held by a third party, the Private Residential Tenancies Board, instead of being at the mercy of landlords. But all this does nothing to stimulate supply.

Ireland needs to build more houses, in the right places and at the right prices.

The next thing we need is a massive change to planning laws where developers or owners of land who are sitting on zoned land need to be given a “use it or lose it” option.

If they don’t start building on the land by a certain date, they lose the planning and the land reverts to agricultural land and they lose a fortune.

In addition, Dublin needs to “build up”, let’s say in the Docklands. We need a zone for 40-storey, top-of-the-range apartments which would be made available. Finally, the State needs to build council houses again, lots of them.

With the process of trying to put together a coalition ongoing, an undertaking to build 15,000 council houses a year in Dublin should be a condition of government. One thing that Irish governments over the years have done well is build houses. Let’s start to do so again.

There are now calls for incentivising the elderly to downgrade to smaller homes to ease pressure in the under-supplied market – with the ESRI estimating that 26,000 empty nesters are living in large homes.

However, the ESRI also noted that this plan will have limited effect, because there are still buyers struggling to get a foot on the ladder due to new rules surrounding minimum deposits.

We have now come to a place where buyers in Dublin are having to find a deposit of €50,000, on average, to secure a mortgage.

  1. Antaine

    This country needs a decent transport system so people can live further afield. Not sure about 40 Storey buildings but we definitely should be building higher. Would love to hear more on the ‘use it or lose it’ proposal and how it would work in reality.
    How many TDs are landlords again? There has to be a conflict of interest when they’re voting on Housing Issues which increase their rents received!

  2. JK

    There are solid ideas here. The solution to this problem needs to be a longterm plan, something over decades. Unfortunately, Ireland doesn’t do long-term planning very well. I asked a politician who visited my doorstep what her 50 year plan was for the country.
    She almost gasped in horror at the thought of it. She had clearly never even considered the idea before.

    • Antaine

      The long term plan of most is to get re-elected in 5 years or so (or maybe less this time around) #Jokers

    • Deco

      Did that politician even have a 5 month plan for the country ?

      Some of the are over-able local authority councillors.

      Just look at the Minister for Justice, with a poster of local accomplishments using state funding, when she is a TD. And the crims able to walk into a hotel in Dublin, and do as they please in broad daylight with Sky TV recording it all.

  3. SK

    Why not remind the Government to place more emphasis on the National Spatial Strategy (Do we have one?). Try getting development in other parts of the Country and not force all of our population into the greater Dublin area? I accept there are houses in places people don’t want to live, but they don’t want to live there because there has been no investment, and no jobs promoted in the regions.
    I would like to hear David’s opinion on how the other regions can be developed. The Government obviously totally under estimated the “Keep the recovery going” mantra because it has not reached the regions yet, David might have some suggestions on where / how to promote growth in the regions (where accommodation is available at a reasonable cost and the quality of life can be better and more affordable).

    • ToffeeFan1

      The fact that quality of life is better in many rural areas actually highlights that it’s the cities especially Dublin that is struggling, the kind of jobs available in Dublin are mostly low paying and the cost of living is astronomical!

  4. JK

    So here is a question worth considering…….

    How/what can we change to make it in the interest of the politician to focus on, and be accountable for real long-term planning for the country? They have to ‘need’ to do it.

    Everyone here knows, this is possibly the biggest failing in Irish politics. But nobody wants to really talk about it because it is too hard. When I have asked this question of people previously I have been accused of being too aspirational. “It’s not realistic to make those types of changes”people tell me.

    The same people make the same complaining arguments about Irish politics over and over again, circling the issue, never confronting it.

    Its one thing, not knowing what the problem is. Is another thing entirely if we know what the problem is but our response is “Its too hard”.

    The only logical outcome of that approach is as follows.


    I don’t claim to have any grand answer to this problem. But we should talk about solutions if we are serious about wanting to fix it.

    So, to repeat the problem:
    How/what can we change to make it in the interest of the politician to focus on, and be accountable for real long-term planning for the country? They have to ‘need’ to do it.

    Will anyone give me their opinion on how to fix it?

    • ToffeeFan1

      Change the voting system to a first past the post – 1 vote only.
      Have a truly independent boundary review for elections so each area is represented properly and change the boundaries so that you don’t have somewhere like Castleknock and Blanchardstown in the same boundary – totally different socio-economic areas !
      Reduce the Dail Term to 4 years.
      Bring in people initiated referendums and the ability of an area to recall politicians who fail to live up to their pre election commitments – 1Yi / Direct Democracy models.

  5. douglaskastle

    I went sale agreed on a property on the outskirts of Dublin last year, it was a house owned by an elderly couple who wanted to downsize. It was only after they/we went sale agreed that they went looking for a replacement property, after they looked around, they couldn’t find anything of value to warrant downsizing to, so after 9 months of keeping us on the hook they pulled out of the sale.

    So two things, incentivising elderly home owners to downsize is not the simple fix it sounds like, they are actually more likely to be competing for the exact same type of property that first time buyers are looking for, but for different reasons and a bigger war chest and two in Ireland until you sign the contract you are guaranteed nothing!

    • Sideshow Bob

      Incentivising movement in the property market has many other difficulties in addition to your correct observation derived from your own first hand experience.

      Movement in the market is easier to generate where there is a large renting population which is used to moving about and where ‘real property’ is not commonly mistaken for ‘private property’, or if you wish, mainly seen as a personal asset as opposed to a place that you live in, as it is in Ireland.

      There are also the issues of memory/sentimentality, of self-identification and self-image and the very considerable issue of people not wanting to (and quite rightly) move away where they have built up a life and more basically, their social support network. Costs can be quite high too, on all sides for other reasons such as; stamp duty, professional fees, moving costs and adaption or even renovation costs. Old properties may require a lot of work and younger buyers almost always underestimate the cost of that element when they bid, frequently by 50% or even much more.None of this helps particularly if the main motivation in this type of deal is profit.

      One observation I would have is that the Government measures in relation to this are too uncordinated and generally inadequate (not thought through in any way) to really incentivise movement in the market. I think policies like this are thrown out there in order to make it look like something is being done, if you like to placate the general public because they sure as hell aren’t working.

      • douglaskastle

        @Sideshow Bob

        I have to agree that the ability to downsize and relatively close to there original property is a huge component. Irish people are not Americans, we don’t like to up sticks and lose friends and the community we have lived and built up for years.

        We eventually bought a house near Dublin from another elderly downsizing couple, but they decamped all the way to Galway, they were unusual.

        • Sideshow Bob

          There are some older blocks of apartments (privately developed and pre-1994) around Dublin in affluent suburbs Rathmines, Clontarf, Ballsbridge, Donnybrook, etc which were built for a market like this (empty nesters) allied with wealthy profession singletons. Families didn’t go for them.They are quite large in the main, usually attractively designed, double suspected and with nice mature grounds and surface parking. So, the idea did exist in the past but only in wealthy areas where it could be paid for.

          The not moving people away from their support network concept popped up many years ago with social housing where it was believed

        • Sideshow Bob

          …(sorry) to be a key reason for the failure of high rise estates. It is a central tenant of most thinking on modern housing provision so I am surprised ( or perhaps not ) that this movement concept even being suggested without reference to the normal need to relocate closeby.

  6. Truthist

    The Boss of Masters are laughing.
    And the Local Masters are laughing.

    It is all about control.

    In being an “urban” Tenant ==> u are more controlled by the Landlord & the Bureaucrats.

    For most of Irish State’s history — i.e. since 1921 — the most numerous private professional landlords of urban dwellings have been cute hoor country folk.
    And no problem for them ;
    Because, in the official narrative of Irish history, the urban poor have not been written worthy of similar pity etc. as was the tenant-farmer.
    David, himself, has noted that it is the rural — we understand farmers & small “townies” — who were the part of the variety of underclasses [ although David did not deliniate thus ] that got their hands on part of the crucial steering wheel of power in Ireland.
    Very important to recognise that there is NO stigma in Irish society in being a landlord of the urban dweller.
    For many decades this type of landlord could exist very discreetly.
    And, in recent decades,- it can be a badge of honour in certain social circles to be such a landlord.

    Overall,- not good is Landlordism [ being a landlord ] & Tenancing [ being a tenant ] for most Landlords or Tenants, or the Bureaucrats too.
    It corrupts their lives.


    Does said publican pay the living wage of € 12 per hour ? Seeing as a bowl of soup and a dessert costs € 10 in most hostelries, this seems reasonable. Only those that pay the least have problems finding staff.
    Many parts of Dublin – Clontarf, Donnybrook, Foxrock etc etc have house prices and rents that are more expensive than the London mean purchase price of € 400 k ( for the average sized house). The average wage in London for a full time male employee is £ 900 per week, that’ works out @ € 30 per hour ! Pay up or shut up. No such thing as a poor publican in Dublin. I know of one who owns 100 houses in the city. He has 1 pub.

  8. Mike Lucey

    Changing planning laws is not quite as simple as its made it out to be.

    Firstly, a planning approval only lasts for 5 years. In order to keep permission active the owner must apply for renewal advisedly within 4 years to cover any unforeseens.

    As regards zoning. In the county development plans various areas are outlined for the different uses, commercial, industrial, housing ect. Logic is the deciding factor or should be when the plans are being drawn up. In most cases they can work well if the total plan is carried out.

    Introducing a “use it or lose it” element, say for a housing scheme planning grant and having the area revert to agricultural use should development not take place within the planning period time could not work if all around this unused housing land other housing development took place.

    Penalties have also been suggested but I think they would also be legally challenged and possibly rightly so. The trouble with housing in Ireland is that its looked on as firstly an investment and secondly a necessity.

    What might work are Housing Co-Ops possibly financed via Ireland’s Credit Unions. Both of these bodies are essentially non-profit making so to speak and should compliment each other well in my opinion. Also because of their make up, Planning Authorities could give them special consideration (Co-Op zoned lands) as could Revenue (VAT relief) and other Gov bodies (smoothing the way and shutting down the developer lobbyists). After all they would be doing what these Gov and Local Gov bodies say they would like to do but haven’t for some time and are now only very slowly ‘taking’ about doing.

    On the question of enticing ‘empty nesters’ to downsize goes. To make this work again a joint operation between housing co-ops and credit unions could go a long way to provide a solution.

    In the co-op mixed housing developments there could be a designated number of retirement homes of varying sizes and of course there could be other designated unit uses. This would take the temptation for property speculation out of the matter.

    As mentioned above by douglaskastle the problem with the empty nesters is to find a suitable down sizer. These are rare enough and ideal units are for the most part purpose built which could be the case in what I suggest.

    So, what is needed to get such projects underway? One answer could be, likeminded groups of singles, newlyweds, families and retirees wishing to ‘self help’ and provide suitable accommodation for themselves and their families under Co-Ops and aided by credit unions that they are also shareholders in and honest building construction companies (of which there are many) willing to work for a reasonable profit.

    At least Commercial Banks could be left out of the equation and that can only be a good thing looking at past experiences.

    • Mike Lucey

      There is a lot of info on Co Ops on the Net. Here is a WiKi link,
      Housing cooperative

    • bremlin

      I live in a housing coop apartment in Germany and if we want to move, members of the coop have first call on vacant apartments. A neighbour moved out recently to allow her pregnant daughter move into her old place. We now have 8 kids under 10 in the 5 apartments in our house – it gets loud. The grandmother moved 100m around the corner. The housing coop also builds apartments especially for older people. It is celebrating 140 years’ anniversary this year. The rent is 550€ per month including heating and water in a very attractive and comfortable University town. Schools and crèches are just around the corner. We are very happy here.

  9. Original-Ed

    We’re fast approaching a crossroads in housing policy and the present route is leading straight into a cul de sac.
    What amazed me while out canvassing before the election was the lack of joined up thinking between the availability of affordable accommodation/housing and productivity. Experienced employees paying high rents with little or no security of tenure are likely to move to places where rents are more affordable
    The landlord is the curse of the Irish system – that no linkage to the cost of living gives them a free hand. Leeching on the backs of the real drivers in the economy, creating upward pressure on wages and killing productivity.

    In London some employers are now purchasing apartments for their employees and this trend is likely to continue for the foreseeable future – it’s a return to medieval times.

    The only solution, here, to my mind is a public private partnership approach. There has to be state intervention but not total involvement.
    The state is a very poor at managing anything on its own but combined with the private sector it can work very well.

    The big advantage is that it can acquire land and call in tenders from all over Europe to bypass the stranglehold that our developers are using at present.

  10. Deco

    1) Residential housing density limits need to be increased.
    2) State investment and bureacracy in the East region is making everythin worse.
    3) Public Transport in the East region is not efficient at moving large volumes of people over 15 km distances.
    4) Embrace micro-apartments. They are very useful in the US and Germany. Particularly for people who reside in distant regions, and who need a bas for three days a week in the main business city.
    5) Build the DART-U. It will make it possible for people to be residents of the next four largest cities, whilst using Dublin as a workplace, with micro-apartments. There are some employers who will not move from Dublin. There are some people who do not want their families to grwo up away from elderly relatives in the regions.
    6) Divert the tourism market out of Dublin city.
    7) Transport between Dublin’s suburbs is not very efficient. In fact it is chronically inefficient, and consists of going through Dublin. Why are there no DublinBus buses on the M50 ?
    8) Whatever about a residential property tax, there is a definite need to a non-residential property tax for residences not being replaced.
    9) More well designed 6-10 storey residential accomodation with nice gardens, and public amenity space.
    10) The drugs problem in central Dublin is becomming serious.

    • Deco

      11) No more internet taxes, broadband taxes, or VAT on broadband. This is reducing the penetration of broadband, and thereby reducing the investment by providers.

      Internet usage/Broadband actually reduces the national carbon footprint.

    • Truthist

      Problem with Irish nation for quite a while ;

      Most do not behave themselves per neighboring tenants, & the infrastructure, when living in built-up accommodation :
      It seems they have been conditioned to be obstreperous ;
      And, with no real need to be so.

      Multi-storey apartment blocks will work for Ireland ;
      But, it requires the world’s greatest housing minds [ architects, engineers, inter alia ] possible that can be recruited to do so with passion & flair & humanity & foresight inter alia because the challenge is to ensure that the occupants are decently housed & cannot realistically interfere with their neighbors & that they behave civilised & are also treated with respect.
      People need to mind their own business, & not causing undue nuisance to others.

      Multiple occupancy dwellings in former single occupancy dwellings have been a disaster for Ireland.
      And,- they also have served as starting points for drug addicts.

      Still,- any type of apartment living is not choicest for rearing families with children older than 3 years of age.

    • Sideshow Bob

      Replies in numerical order.

      1) & 9) Couldn’t agree more. Your 6-10 floor suggestion is better than David’s 40. 40 is big. The city could take up to 10 reasonably though with some provisios.
      2) I would say that only Limerick and Louth are better than Dublin as things go for urban development with regard to what are your bugbear here. Most of the country is actually more limited. I don’t know a lot about Cork though or where that stands relative to the rest.
      3) & 5) & 7) Public transport is an overly expensive and grossly inefficient joke in Ireland. This is very obvious in most most urban areas and particularly in Dublin. We simply do not have a clue.

      However, towards the end of the boom there was some progress made with connected thinking on this issue with some new higher density suburbs in Dublin deliberately being located along transport lines. They were planned with higher densities and with facilities from the get go and importantly connected via rail and bus to central Dublin. Two that come to mind are Clongriffin and Adamstown.There is one more at least.
      4) Yes, decent quality bedsits/studio apartments have a role to play in housing provision.Could tie nicely into the 6-10 storey increased density apartment blocks idea.
      6) Not sure about this. One thing that is putting the housing market under severe pressure at the bottom end is the non EU students learning English industry. They have the right to work and are happy to live at 4 people per one bed apartment paying 300euro each (or more) so 1200euro per apartment (or more) while landlords look the other way at any overcrowding issue.Many are really seeking work here as the exchange rate compared to wherever they are from means that money saved in euros goes a long way back home.
      8) Don’t understand this one could you explain some more?
      10) I will take your word for it.
      11) Ha ha don’t we already have a “smart” economy brimming with jobs and possibilities for everyone created from a bedrock of high speed broadband for every person in the entire country like Enda waffled on about?

  11. Grzegorz Kolodziej

    “Have a read, would love to hear your thoughts!”

    Here are my thoughts.

    1. As you have noticed in one of your previous articles, in considering what steps to take we should bear in mind that we are not coming from the free-market position because the market is distorted anyway by things like

    1.1. land zoning,
    1.2. tax incentives and – I do not think you pay enough attention to that property-bubble factor in your articles, Dave -
    1.3. near-zero interest rates which prevent investors from optimal allocation of their resources (so that, i.e., money goes to housing rather than manufacturing and banks are not lending enough for small businesses because there is bigger money to be made on government bonds and property speculation).

    2. I do not think it no longer helpful to moan about central banking and that kind of stuff, because

    a) Ireland is not going to change that one and
    b) that, in the long run, with that levels of leverage central banking will collapse anyway, because that level of debt created by central banks is not sustainable.

    Instead I would like to focus on what should be done in short term and hope that some TDs would read it. These would be:


    Shocking as it may sound, up to about 1975, there was little or no premium on house prices in the Dublin. Contrary to what most people falsely believe (that there are too many people coming to live in Dublin), Dublin has one of the lowest-density urban areas in Europe; I therefore strongly support David’s statement that “We need a zone for 40-storey, top-of-the-range apartments which would be made available” (but is not the case that there is a law prohibiting buildings from going over certain height?).

    There is no shortage of land, but there is a shortage of planning permission. The first thing that one of my ex-colleagues from Labour said to me (I mean he is from Labour, not me of course) after being elected a councillor was to ask me if know someone who badly needs a planning permission – a nod’s as good as a wink.

    Before land zoning came along, house builders extended the city by buying up farms on the city’s edge and building at whatever densities the market would support.

    LAND ZONING (from 1963) AND CREDIT BUBBLE (from the late 90s) meant that from the mid-70s onwards, houses in Dublin had more than 50 per cent of premium over comparable homes outside Dublin.

    Same thing has happened in London. In fact, the Davy Group names Dublin (along with London, New York and Hong-Kong) as one of the 4 most overvalued property markets in the world, which is some achievement, given that a) this is even compared to places like San Francisco and Sydney and b) Ireland is not a center of anything, which would indicate the bubble collapse will be even worse than it will be in London.

    4. What is the core of the bubble growth?

    Sadly, it would appear that David advocates the expansion of 4.2 and 4.3. I could never understand why a man of the world and erudite would insist on continuing his love affair with Lord Keynes and would not acknowledge that sustainable investment (a l s o i n h o u s i n g!) can only come from savings, not from government spending and interest rates distortion.

    5. There are lots of things in which Ireland stands out positively, compared to the rest of Europe (higher levels of trust, lots of people jogging and storytelling culture is a good example), but there are some which make a discerning visitor think WTF?
    One of those WTF? things is THE FAILURE OF THE LIVING OVER THE SHOP SCHEME. The scheme offered 100 per cent tax relief for the cost of converting spaces over shops into apartments, except for the scheme to work the law makers should have


    But hay, where would then be an opportunity for corruption for our local councillors? It would not be any, so onerous regulations were kept up, zoning and very few streets were included – and so the take-up of the scheme was abysmal, but BMW sales in Dublin went up.


    In 2009 mortgage-interest relief against rental income was reduced for the private rental sector to 75%; while the commercial rental sector was still getting 100% relief. New measures reinstated the 100% relief but ONLY FOR LANDLORDS RENTING TO LUCKY (NOT NECESSARILY THE POOREST) TENANTS IN RECEIPT OF RENT ALLOWANCE (a receipt thereof is in Ireland a question of luck, not income).


    A habitable unoccupied property is subject to 50% of commercial rates. An uninhabitable, unoccupied property is not liable for rates at all, though I wonder how this:

    will change it (but that won’t enter into force until 2018, by which time we can have a property market collapse anyway).

    An 18-month audit carried out by Dublin City Council has found more than 61 hectares of vacant or derelict land, spread over 282 sites in central Dublin (in total it has identified 151 vacant plots of land and 131 sites with derelict buildings, which are zoned for development but are left unused; some of them, buildings look like Poland in around 1947).

    8. ABOLISH THE RENT ALLOWANCE SYSTEM (or, at the very least, perhaps incorporate it into an integrated welfare system, but income based, not luck-based?). IT IS PUSHING THE PRICES UP, AND IT PUSHES THE LOW-INCOME WORKING TENANTS AND UNLUCKY OTHER TENANTS OUT OF THE MARKET (you have to be relatively well off to find a house and pay a deposit where the landlord pays taxes and agrees on rent allowance).

    David, if you won’t to kick-start the economy, start from this – is paying overpriced rents not the biggest killer of investment? Imagine what customers could do with all that money if the rents were as low as there are in Germany.



    • EugeneN

      The only good idea there is no 7.

      • Grzegorz Kolodziej

        Hmm, so you do not believe that the rent allowance system pushes the prices up and basically gets what appears to be “money for renters paid by taxpayers” transferred to landlords, so that even rent allowance recipients are not really better off because the prices are higher and the rest – including lower-income classes – is worse off?

        The reason I have been vocal on rent allowance is, among others, because of its pernicious and distorting effect on renting market.

        Some time ago, on this blog, I have summarized conclusions from a research done in 3 countries (one of them is New Zealand) which has showed that there is a strong correlation (and not a good one for renters, first time buyers and EVEN RENT ALLOWANCE RECIPIENTS); sadly the way this website is designed makes it almost impossible for me to find it and reference it quickly, and I cannot stay longer today.

        The “rent allowance transfer to landlords” phenomena concerns small fishes, but there are extreme examples which make my hair curl:

        And as long the rent allowance is 1) in operation and 2) as random as it is, there will be more cases like that.

        As for the second best option (after abolishing the rent allowance completely) proposed by me, which the British-style system (rent allowance incorporated into one payment and thus not dependent on the mood of the landlord – and some recipients simply cut off it as disposable incomes of some recipients are higher than low-income workers = better for government spending, better for renters), why is the current system better than the British one?

        I think the British-style system would be more fair to start with (the said vacant homes), and secondly, Dr Constantine Gurdgiev made a great analysis 10 years ago of the rent allowance system’s influence on rents.

        I wonder – would the sorry spectacle unfolding before our very eyes in the Dáil be a red herring for the debate on real issues (and what can be more real a topic in Dublin than a place to live and commute?)? Is this what we are going to hear for the rest of 2016 – who gets what sinecure in the Dáil?

        • EugeneN

          If course it is a transfer of money to private sector landlords, the solution is not to get rid ( politically impossible) but to build more council houses. This was always supposed to be a temporary measure.

          • Grzegorz Kolodziej

            There is one problem with building social houses – if we restore Part V of the 2000 Act, this will simply transfer the costs of building social houses on renters and first time buyers.

            Besides, even though I have never been on anu housing list, I once went to the local building to pay some tax and I heard a conversation in the queue from which it followed that a lady in the queue had been twice offered a house and she refused it.

            I know of ridiculous things going on, like 46% of social houses refused in Waterford.

            If one wants to help the poor, one has to start from fairness. It cannot be that one working family saves on food and others refuse social housing (“cuz it was in Wicklow and me daughter lives in Dublin” – well, tough shit, Lady, I worked with an Irish guy who was commutting 120k).

            In my opinion neither party (FF or FG; no need to discuss Labour any more thanks God) wants the prices to do down anyway, because they would lose votes of huge chunks of their voters, who are houseowners hoping for the prices to go up. Unless there is riots in Ireland, housing bubble is good for the election – or so they think.

            You are asking yourself why new houses are being demolished? PRECISELY because of the above.


        • Truthist

          I agree that the Rent Allowance / Housing Subsidy, or whatever “Windscale / Sellafield” tactic name it will be nominated by The Irish State whenever, has distorted the market price for rents in private sector upwards.
          And,- I in my time said so in a great many of my Rent Allowance Applications & Housing Applications for Local Authority Housing & Letters to Civil Servants & Irish State & also to Charitable Bodies inter alia.
          My argument was very clearly & fully laid out.

          Really, Grzegorz, it is none of the Landlord’s business to know if u are are considering applying for, or going to apply for, or entitled to, or will avail of, or receiving, Rent Allowance.
          But, it has been carefully designed by the Civil Service that prospective Rent Allowance Applicant makes the Landlord privy to Rent Allowance Applicant :

          being on Social Welfare income
          Handy information for Landlord however

          of Social Welfare existence
          Handy tip-off for Landlord to reject prospective, or continuing, Tenant on socially undesirable grounds.

          possibly able to get subsidy to income.
          Handy angle for Landlord to profiteer on the Rent.

          involving the authorities of their prospective, or continuing, tenancy
          Handy tip-off for Cute-Hoor grey-economy Landlord — most likely a Civil Servant [ especially Teacher-Landlord, or Garda-Landlord ] — to quickly reject the tenancy & thus protect their underground status from the Tax-Man [ Sorry for "sexism" ; But I'm afraid of the Tax-Bitch 8-) ]

          And,- it also gets society more used to State involvement [ Communism ] in their lives.
          Even so,- Community Welfare Officers share info. about Tenants.
          Then again,- u have inside-track Grzegorz about Guards gratuitously eavesdropping on citizens phone-conversations if I remember correctly.
          Yes,- we exist in Orwellian Nightmare.

          And, of course,- Rent Allownce system has either from outset, or by observation, been continued in its design so as to push Rents to unfair high levels.
          For the sake of :
          Civil Servant-Landlords
          Civil Servant Speculators
          Pro Class-Landlords
          Pro Class Speculators

          Rent Allowance should be strictly private & confidential matter between Tenant & State.

          Rent Book should be enough as to written evidence of tenancy for Rent Allowance purposes.

          Tenant should be by default be entitled to enter Rent into Bank a/c of Landlord.
          Rent Allowance can be set up to discreetly enter into Landlord’s Bank a/c without Landlord ever being able to know if Tenant receiving Rent Allowance.

          Tenant should also be able to retain Rent if they have good reason.
          Tenant should have option to set aside Rent or part of according to good reason.

          Ultimately,- Tenant must pay rent if Landlord is fulfilling all of contract ;
          solving problems caused to tenant by other tenant[s].

          Tenancies are horrible existences.
          Thus,- NO narcotics are to be tolerated in tenancies.
          It just makes it worse for everyone.

          Better that dweller [ not Tenant ] payment is always going towards paying for ownership of generic dwelling, & that continues if dweller re-locates.

          Homeless now need Shanty Towns ;
          Would be better than the alternatives.

          Now that would have very positive impact on bring ridiculous housing prices down.

          • Truthist

            Crucial Typo / Omission by me in above reply to Grzegorz

            No ;
            Even so,- Community Welfare Officers share info. about Tenants.

            Yes ;
            Even so,- Community Welfare Officers share info. about Tenants WITH THE LANDLORDS.

          • Grzegorz Kolodziej

            In addition to what you have wrote, I would add that if anyone thinks that having a whimsical rent allowance system is designed “to help the poorest” and the most vulnerable, he or she should read this:


            It’a amazing how the whole rent allowance issue is a taboo, whether among people or in newspapers. I found out people are more open to discuss the Real IRA than the rent allowance system.

            Besides, I have my own experience with a nice Dublin property portfolio owner, ex-BOI manager, who was abusing the system left, right and center.

            Generally, the more simple a system, the less corruption there is. That’s why I was saddened a party like Renua have failed miserably.

            I am not a socialist, but at this stage I start looking at the idea of basic income as opposed to having a welfare state, with all its loopholes (btw, I wrote to Minister Burton pointing out one of them, I got a written response she was looking at it carefully but that was that and I have never heard from her again: dear people, Labour Does Not Work).

            Have to get back to my onions now.

  12. Sideshow Bob

    There is an obvious bind going on here in that all new public debt except for bank related bail-outs of course is “verboten´´ by the EU. This works well for our sniveling, obsequious right leaning political class who have an excuse to stifle even debate on the use of State resources or even backing to lead in any way on re-investment and stimulus for the Economy in general. Present day election fantasy promises are the exception to this norm. It is always, and will always be, easier to blame faceless officials in Brussels rather than take some responsibility on the matter.

    An interesting lesson for us, I think, on the subject of relatively recent “circuit breaker´´ initiatives was the “Minha Casa Minha Vida´´( or MCMV; My Home My Life) Brazilian Social Housing programme, which was one specific element out of 6 wider Social and Infrastructural investment programme (called the PAC) instigated by the Brazilian Government in 2008/9 right after the Lehman´s implosion and the global financial meltdown.

    Between 2010-2015 Brazil delivered 2.1 million units Social Housing units and had contracted another 1.6 million units for delivery within 1-2 years for the general population. To compare this to the case of Ireland, which has 1/40th of the population of Brazil, this is the equivalent of the State here delivering 50K social housing units in 2010-2015 and having 40K in the pipeline to be delivered inside of 1-2 years. The actual Irish numbers for this period are 3.5K completions with almost nothing currently in the pipeline.

    The MCMV programme is still running in Brazil, though it is being scaled back. They pushed ahead with this originally in 2009, purposefully and deliberately without using external debt financing, or tricks like PPPs or off balance sheet debt vehicles, etc. The initiative benefited many smaller builders internally who were able to expand their operations solidly on the back of a mix guaranteed consistent income and cheaper borrowing costs via the State supports for the programme. It also has the result that right now in Brazil that is not a total collapse in construction and housing provision,too, despite other very serious and deep problems in the Economy there.

    It is instructive what a nation can do when it´s leadership chooses to make a stand on an issue. And that would have been a left wing government (the Partido Trabalhador, or Workers Party )too.

    Unsurprisingly the PT they are always subject to regular attack by right wing media elements, both in Brazil and abroad, with serious red-herring Economic arguments, and now more-so than ever.

    But what is new about that?

    ( Link to MCMV information in Portuguese: )

    • Sideshow Bob

      Sorry all – I didn’t mean to post that without a preface and without editing.The vehicle that I am travelling hit a bump and I accidentally hit enter!

      I posted this comment a few weeks ago (26th February or so ) in response to a general post by NeilW about stimulus expenditure by Governments. NeilW talked about stimulus as a “circuit breaker” in a downward spiralling economic cycle. I am reposting because it’s relevance to this topic.

      One of the most interesting things about the Brazilian program is that actually is an example of innovative financing that Irish politicians of all sides talk about but when asked what exactly they mean they can only come up with the stock answer of;PPP!

      PPPs have no track record for successful use for mass housing provision anywhere in the world despite being used extensively for infrastructure and institutional building. Provision or rather, the mass provision that is now needed, needs direct help from the Government but there is more than one way to do this if we can approach the problem in a lateral minded way as a society and stop importing and incorrectly applying half measures from other jurisdictions, and more importantly cultures.

  13. Truthist

    Here, have a look at where some of your precious tax paid currency gets spent instead of housing ;

    Yeah, that’s right ;

    ” … works closely with the … & is understood to have a relationship with …”

    Yes ; The very folks who organise all the false flags [ fake [ crisis-acting ] events & real [ real victim ] events, & are organising all the Arab-Spring wars, & the genocide of nearly 2 million Iraqi people, & more to come.
    All those supposably “mad” moslems are faking it [ unless they have been co-opted by the fakers ] & really of those same lovely agencies that our own lovely agency collaborate with.

    Anyways,- why did they not apprehend that Arch-Terrorist / Subversive “Jean Claude Trichet” when he came to The Irish State on the basis of his threat to b..mb Dublin ?
    Heck, the Templemore-Frothful Rage is oozing from me when I get a re-kindled opportunity to bark those phrases “Terrorist”, & “Subversive”, & what-not of 1970′s & 1980′s yore !
    Seriously, I believe Minister for Finance Michael Noonan on that statement of his about the phone call he got from Jean Claude Trichet of ECB threatening to b..b Dublin if Irish State did what David recommended ; “Burn the Bondholders”.

    Bye the way, when it is not under the supreme authority of prospective Mr. Mehole Martin, our lovely agency is under the immediate cosh of another good family man ; Mr. Simon Coveney.


  14. EugeneN

    Its not too long ago that Davif was obsessed by Ghost Estates and how we would never fill those spaces

    All accurate of course. And worse after the bust. What happened to all these houses?

    We didnt build but we have had lots of inward migration, so now we build and what if the migration reverses again ( I bet we are at peak Irish boom post bust right now).

    Thats the problem with the EU, britain also has the problem. You cant really know your population in 3 years, never mind 10.

  15. sravrannies

    1. Increase Corporation Tax forcing a few multis to leave and take their foreign McJobs with them freeing up 1,000s of properties.
    2. If they want to stay and maintain low Corporation tax, “encourage” them to re-locate down to Sligo or somewhere else where property cheaper and more plentiful and where land not scarce for further building.

    problem solved.


    • EugeneN

      Yeh, good luck with replacing the tax revenue paid for by the employees.

      Although you are right that would solve the demad side of the equation. The Irish economy would contract by about 50%

  16. The housing market in Dublin has the same problem as the rest of the economy. Too much regulation and red tape caused by government interference to the point that there are no proper markets, only distortions.

    Likewise in other “markets” around the world we are reduced to guessing. Inflation is on the move all over and in the weakest currencies first. As reported yesterday the local store told me their produce is up 20% in price from a year ago.

    Here is a discussion as to what to do about this. Basically get rid of the interference and revert to honest “equity based” money. If nothing is done , be prepared for the mother of all busts as the distortions collapse the economy.
    Its all about the debt, otherwise known as credit , based money.

    • Truthist

      ‘U proposed that we should revert to “equity based” money’ as post in previous article’s blog also.

      And,- I asked u to explain what u mean.
      Thus far,- unrequited.
      I feel it as would a boxer a cold-blow to the guts.

      Here for Yews is that reply again ;

      March 10, 2016 at 6:30 am

      What do u mean by “Equity-based” Money ?
      Pardon my redacting.
      Also,- how to decide its value per Precious Metals ?
      And,- what happens when the international market [ prospective trading countries, & prospective private trading entities ] & George Soros, & Goldman Sucks, & Rothschild & their ambassadors Yellen, Jean Claude Trichet, Junkers, Timothy Geithner, & let’s not forget Aul Suds himself [ Sir Peter Sutherland ; Former "Attorney General of Ireland" ] decide on a certain “low” value as to ur “Equity-based” Money ?
      I believe that any such brave & in theory smart moves cannot be successful if the general populace are rotten & unwise & not sufficiently fit in matters of self-sufficiency [ a la "I am a Nation" ].
      But, of course, u urself have been imploring people to attend to this duty to themselves to rectify themselves ahead of the big nasty reset against them.

  17. McCawber

    The ECB lower interest rates as Ireland reports a growth rate of 7.8% for 2015.
    Given the subject matter of this article the question has to asked.
    Is ECB policy appropriate for the Irish economy?
    If it is not then what should our government /authorities be doing to minimise the damage.
    Over to you David – Surely there’s at least one article in this.

  18. HoChi

    Bay area (San Francisco ) has a housing problem also a lot of tech co’s there too

  19. McCawber

    Ireland is Dublincentric.
    Strategic thinking and ACTION is required to get a more balanced economy geographically speaking.
    A decision is required to develop another metropolis
    The area between Gort and Ennis is one possibility. A green field city properly designed and planned out.
    Limerick and Galway would become satellite towns

    • coldblow

      ‘Strategic thinking and ACTION is required…’

      ‘A decision is requirerd…’

      Well, it’s clear you want ACTION but not thinking (strategic or otherwise).

      So you want a new metropolis to appear in Clare or Galway. Do you live there?

      Has this got anything to do with GOLD?

      • McCawber

        It’s a stalking horse or hopped ball.
        If not Clare/Galway then where?
        No I live near the Big Smoke but Clare is a nice county to visit and the people are very friendly and that’s two +ves for starters.
        GOLD – only if they discover some there, although Silvermines is not too far away so who knows?
        This has more to do with the need to re-balance our economy.
        Build a counterbalance to Dublin.

  20. X Pat

    Hi David

    Good article, couple of comments :

    Thriving pub owner staff can’t afford to live etc. Well, if the pub is thriving I’m curious as to why he’s not paying thriving salaries. The pub industry may need to think about creating careers for staff, there are many ways to keep staff that are not even money related. Ultimately, I don’t see this as a failure of the housing market so much as an unwillingness of a beneficiary of economic growth to accept a rise in cost base.

    I see similar attitudes in Singapore where I live, employers complain that there is a shortage of cheap foreign labour due to government tightening of labour visas. You see where this is coming from, the complaints generally boil down to a reticence to pay higher salaries when the economy is doing well.

    High rise apartments in the dock lands versus council houses

    Here I see another logical bias from the idea that apartments are what trendy singles who work in banks like, while low income families need a house and garden.

    Again, look at the Asian mindset. Start with a high rise apartment that can be affordable, and earn enough to have a house later. So, apartments for lower income, houses for higher income. Revolutionary, right? There seems to be an odd view in Ireland towards apartments, as if Ballymun became synonymous with low quality neighbourhoods because of the height of the building. Nor should social housing be on the outskirts of the city, it needs to be balanced everywhere. Otherwise it reinforces the cycle. Neglect of the neighborhood drives degradation. There is no sensible reason to imagine that wealthy people should favour high rise apartments while low income people need a house. It’s the other way around. High rise apartment neighborhoods actually enable large scale provision of social services to residents with lower mobility. The rich folks with houses and cars can drive to the doctor.

    Anyway, a lot of the issues can be addressed by making social housing scalable, and that means high rise apartment blocks throughout the city with village style social services located around them. If you really want a house, work to make the money.

  21. mike flannelly


    Three people working in a respectable Dublin city TOP pub are paying no more than 22% of their joined 6000euro net monthly take home pay in the 1300euro house. Assuming that they each earn 35000 yr gross. People earning below min wage will pay a higher ratio and the Red Line that should not be crossed is 30% of net income for shelter needs.

    It is a “REALITY” as much as a crisis that people earning below the average wage can not afford to live in Dublin City inless they live in NON EXISTING 2011 TO 2016 SOCIAL HOUSING. The 31st Dail told us that pillar bank share prices are more important than restructuring the housing economy cash flow.

    A couple or family with joint earnings of 4000euro net average wage could not afford the 1300euro rent as it would cross the red line advisory guidelines.

    It is a REALITY that working couples must live outside Dublin city if their joint earnings are below the national average wage.

    A 300000 euro Dublin City house is now ” 19 TIMES ” the annual rent of 15600euro (12 × 1300 ).

    We are told by gobshites that it costs 400000 to build a one bed apt in Dublin city.

    There has ALWAYS been a link between rent and house prices.
    From the present evidence the average wage in Dublin is too low or the 300000 house price is too high.

    Two bed average apts would normally be 10 times the average annual rent of the area.

    The FACT is that Irish Bankers were valuing the DEBT on two bed apts in cities outside Dublin at 30 TIMES the annual rent from 2006 to 2009.

    When bank customers went to restructure the mortgages, they were told to piss off by failed bankers.

    ” Finally, the State needs to build council houses again, lots of them. ”

    Affordable Social Housing is needed YESTERDAY.



    Edmund Honohan is the only person in Ireland to offer a solution for the affordable housing.

    CPO the property that was force firesold below “REAL VALUE” housing replacement costs.
    That would bring back plenty of 200000 houses into the market.

    The 200000e mortgage is 950euro mth @ 3% for a term of 25 yr fixed.

    There was blood in the water when the reality of the 2003 to 2010 Debt Crisis hit home.

    TO ” JOG ON ” .


    • Truthist

      Ur Question ;


      Answer ;

      Boss of Bosses / Master Puppeter of Puppeter had as their game-plan that :

      Pleb suffer for quite a while paying off mortgage dutifully for over-priced home

      jettison the pleb into income crisis

      refuse to re-structure so as to retain the home with pleb

      grab the home from pleb

      sell home to consortiums for quick high profits

      ultimately change the demographics of Ireland from being Freehold Owners of Homes to only being Tenants [ And, the various shades of tenancies ]
      And, thus break down a major deterring factor for Communism or Socialism to get stronger foothold in Irish State, vis. Freehold Ownership of own Home.
      Disfunctional status for tenants ==> justified grievances that society is cruel on tenant ;
      Case is made that “Capitalism” is root cause, & that there ought to be more Socialism or indeed Communism.

      Master Puppeter — the Roths & Illuminati — want fascistic Communism to be the accepted system ;
      Thus, plebs equal ; Equally poor.

      • coldblow

        Hello, night shift. This is the dead zone where a fact turns into a FACT. It’s the Illuminati and the Bankers. FINALLY someone has the guts to tell it as it is. Agree 100%.


    Last gasp of a deranged policy. Inflation of the money supply caused a boom. people over extended which caused a bust. Depression is the result but mistaken as deflation. Now and as continued is a constant inflation of the money supply and thinking it will get different results is the delusional insanity. We are headed for a bigger bust because of the inflation of credit and debt. This is also the inflation of the money supply which is the inflation and the debt is killing all. The interest on the debt is the nail in the economic coffin.

    All central bank money is issued as a debt to be repaid. Worse yet the interest charged on this fictitious money is a tick on the economy draining the life blood and destroying it.

    My previous remarks about equity money may be the incorrect terminology but meant to convey the money that is not issued as debt at interest.

    Coin would be an example as it is issued as equity and not debt.
    In the housing market one asks how much equity do you have. Equity is what is left after deducting from the market value of the real estate all the encumbrances as in the mortgage, taxes owed , and any other encumbrance registered on title and the cost associated with effecting a sale.

    Money issued as a loan is a debt to be repaid and thus has no equity. Money brought into existence otherwise has equity as it carries no debt ot counter party risk.

    • Truthist

      U only answered part of my post to u ;

      U explained what u meant by the term “Equity Money”,- so now I ask u again the remainder of my post, vis

      Also,- how to decide its value per Precious Metals ?
      And,- what happens when the international market [ prospective trading countries, & prospective private trading entities ] & George Soros, & Goldman Sucks, & Rothschild & their ambassadors Yellen, Jean Claude Trichet, Junkers, Timothy Geithner, & let’s not forget Aul Suds himself [ Sir Peter Sutherland ; Former "Attorney General of Ireland" ; The Chief in Europe of The Trilateral Commission, & Chairman of Goldman Sucks ] decide on a certain “low” value as to ur “Equity-based” Money ?
      I believe that any such brave & in theory smart moves cannot be successful if the general populace are rotten & unwise & not sufficiently fit in matters of self-sufficiency [ a la "I am a Nation" ].
      But, of course, u urself have been imploring people to attend to this duty to themselves to rectify themselves ahead of the big nasty reset against them.

      • Also,- how to decide its value per Precious Metals ?

        The market decides how much of any currency it wishes to exchange for a unit of gold or silver just as it does presently. $1697 CAd or $1275 US or E 1145 etc
        Setting the price of gold is the error. Gold is constant and is the benchmark by which all else is measured.

        Thus the correct question is how do I value the currency against a fixed weight and purity of gold.
        The same goes for silver. How much silver must I trade in order to get a unit of gold. That answer is currently about 81 units of silver for one of gold.

        And,- what happens when the international market [ prospective trading countries, & prospective private trading entities ] & George Soros, & Goldman Sucks, & Rothschild & their ambassadors Yellen, Jean Claude Trichet, Junkers, Timothy Geithner, & let’s not forget Aul Suds himself [ Sir Peter Sutherland ; Former "Attorney General of Ireland" ; The Chief in Europe of The Trilateral Commission, & Chairman of Goldman Sucks ] decide on a certain “low” value as to ur “Equity-based” Money ?

        Non debt money would have an intrinsic value set for use within a country. within the country nothing changes and people use it for trading and shopping regardless of what a foreigner says it is worth.

        If a country is trading abroad then the value of the currency is set in the market as a value against other currencies. Manipulation by an artificial means would be a temporary affect but would soon be adjusted by the market. A strong currency relies upon the way it it handled domestically. a well looked after currency looks after itself. A speculator has to sense strength or weakness in order to benefit by accelerating the trend.
        I believe that any such brave & in theory smart moves cannot be successful if the general populace are rotten & unwise & not sufficiently fit in matters of self-sufficiency [ a la "I am a Nation" ].
        True enough. So educate your neighbour. David refuses to discuss the issue.!!!

        • Truthist

          David refuses to discuss the issue of Real Money / Sound Money versus Fiat Currency [ even if it is backed by Gold [ supposedly, maybe, one hopes ... ] !!!

          U cannot be serious ?

          David is an internationally acclaimed economics commentator, & a qualified econonomist, an actual Professor at Trinners no less too, & the go-to-economist for the Minister for Finance in a dilemna about supposed possible “Bank-Runs” to visit at his kitchen, & accede to the advice of, when an intriguing alternative for the good aul Minister would have been to consult one of the very same Minister for Finance’s brothers who devised the whole “Double-Irish Sandwich & Dutch Sausage” to obtain a craftier “solution” than David’s partial “hole” / “sovereign guarantee” is not a whole “hole” / “sovereign guarantee”, & more ;

          “No way !”, surely, would David ignore Real Economics / Austrian Economics / …wish Economics ?
          Lest he be accused of being anti-…..

          Grzegorz himself, I posit, knows that Private Central Banking, & Fractional Reserve Banking, & [ unbacked by Gold ] Currency is a load of aul tosh.
          So, likewise does David … hmm … mm
          Or can David cogently put the case otherwise in a seminal essay worthy of a Professor at Trinity College, Dublin ?

          • coldblow

            May I cogently posit that u [ a prolific & tireless / tired / over-stimulated contributor ] R debasing the currency of deb8 on this forum / board and decreasing the ‘ demand ‘ for cogent / common-sense input & driving out sound currency discourse [ viz Gresham's 'Law' / 'Gresham's' Law ] by over-printing worthless & value-less ‘ opinions ‘ posited by a range of similarly similar/ opaque transparent / repetitive / repetitive / repetitive / repetitive sock-puppets at [ ten to five in the morning ] and will u accede to taking ur medication 4 ur bi-polar disorder? This post- R posits that he is sick hmm… mm… 2 the back ‘teeth’ of this charade and wd rather watch re-peats of 4T Towers than read any more of ur aul ‘ posits ‘ about Gold or Fractional Reserve Banking. Thank u.


  23. Inflation is on the prowl.
    ECB devalues the EURO following, US Dollar, Chinese, pound et al.
    The benchmark to value the currencies is in fact the age old money–gold

    Broken Bazookas!

    “There is a tide in the affairs of men, Which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures.” William Shakespeare

    First it was the Fed, then it was the Bank of Japan, now the ECB (and maybe even China). Mario Draghi finally let loose this morning with everything left in his monetary “bazooka” and gone as far as the Bundesbank will let him. He also has to face the BIS restrictions in the next three weeks which are far from certain to be in favor of his actions. 10/draghi-whips-out-bazooka-ecb-announces-surprise-refi- marginal-lending-rate-cuts-boos
    Looking backward first, the Fed unsettled markets in mid December with a rate hike. Japan lit gold’s fuse in January with the announcement of negative interest rates. Today, Mario Draghi spent and fired his last shot, it will be seen as a blank. Now we will get to see what sort of reaction is received from the markets. Initially the markets went in the “favored” directions, that only lasted for about an hour. The Euro is again strengthening, gold going higher and stock markets have turned negative as if asking “now what? Do you have anything else”?
    Before going further I want to break down what they are trying to do into its most basic form. Systemically (including Europe) the world ran into “debt saturation” back in 2007. The plan was to cure too much debt with …more and more debt. The “experiment” has not worked and will not work …and Mario Draghi just ran into a wall where this is it, he has no more room to “experiment”. No doubt this is being done now to try to support the Italian (Spanish and others) debt that has gone bad.
    There is another little problem that few are talking about, the BIS. The Bank for International Settlements has warned Mr. Draghi not to go to this wall of negative interest rates and further outright monetization. The BIS has the ability to force Draghi to not only stop the madness but also reverse it. So not only are the markets asking “what’s next?”, it is also wondering whether or not the BIS will step in.
    We also have another piece to add to this puzzle, China. They just announced they will 03-10/china-proposes-unprecedented-nationalization- insolvent-companies-banks-will-equitize begin to take equity stakes for non performing loans via the banking system. “Nationalization” no matter what they call it. It had been speculated China would have to devalue the yuan in an effort to make their massive corporate debt payable and industry more competitive. I would suggest this is simply wiping out current debt in an effort to make room available to create more debt and to reflate. We will see how this works out but I do not believe this is any more credible than any of the other “serial reflators”.
    Many times it is said “OK, so you see the problem but what’s the answer”? The answer is obvious and we will get to it after looking at the true problem. The world hit debt saturation in 2007, sovereign treasuries and central banks stepped in and sacrificed (destroyed) their own balance sheets in an effort to reflate. We know it has not worked and the global economy (pie) is no longer growing. The ONLY way for a country or region to “grow” is by taking an inordinate size of the pie and the only way to do this is by devaluing currency faster than your competitors.
    The problem today is ALL currencies are competing against each other in debasing (devaluing). If you devalue too slowly you lose. If you devalue but not enough, again you lose. This is the problem with and misunderstanding of the USDX index, the currencies are all valued against each other and NONE OF THEM ARE REAL! The “answer” as it was back in 2008 is still the same, rather than race “against” each other THEY ALL need to collectively devalue! The only way to do this is to collectively devalue against “something” …and that something is what it always has been, GOLD!
    A collective devaluation will do several things. First, it will create “inflation” and thus make the existing debt payable if the devaluation is deep enough. Business will get “reflated” and main street will actually participate in the better business conditions. Most importantly, for those nations who actually do hold gold, their balance sheet holes will be filled up and patched. Sovereign treasuries with gold will suddenly see their coffers filled. There is of course the problem of nations who either do not hold gold or have lied and no longer hold what they said they did. In this case, these nations become the world’s new “cheap labor” and begin to dig their way out via industrial/commercial production. This is a very long and hard process which also involves a huge drop in the standard of living.
    Do I know what the level needs to be for gold to perform its function as central bank reserve? No, the number could be $25,000, $50,000 or $5 million or more, I do not have the answer. The biggest holder(s) of gold on the planet could simply “mandate” a price or do it via the physical markets over a reasonable period of time …but they will do this as it is the only viable solution.
    We now have a situation where central banks have lost their credibility. This will lead to a loss of confidence in all things paper. Either the central banks revalue their balance sheets with a wildly high gold price or the markets will do this for them by voting with their feet so to speak. We are on the cusp of absolutely wild market gyrations and obscene price levels for gold. So obscene you will either be in or you will be out forever. Do not try to time anything, these last bazookas fired with blanks will be seen as a very large starting gun!
    Standing watch,

    Bill Holter
    Holter-Sinclair collaboration
    Comments welcome,

    • Broken record more like Tony.

      Gold is not going to do shit for you, nor for anyone else, but if that’s how you want to spend your latter days then be our guest – it’s rather pathetic though old (metaphorically speaking) friend.

      I gave you all a tip last month about a certain crypto-currency (not Bitcoin) that was set to rise for very good reason – not a pump n’dump vehicle – it has good traction due to real (smart) contracts etc. That’s a clue right there.

      Anyway, no one listened, I put 5 grand in myself, it’s worth 32k now now – I could take it out in cash in the morning if I wanted – tax free no less (shock, horror). 27 grand profit is not bad in one month of sitting on your ass, supporting your rather large brain.

      The problem with you lot is you are all blather, no action. Soon as I gave the tip last month I could feel the pampered eyes glazing over.

      Night lads, off to Montserrat on Saturday for 8 nights, have to go 2 days early as today’s ferry was cancelled (choppy seas) and I don’t want to wait till Monday (as was planned originally lest I mess up my week. Might fire off a few missives from there in my Leprechaun costume. See if I can blow the 27k in 8 days – won’t be for the lack of trying.

      • Truthist

        That took guts Adam ;

        Congratulations !

      • Mike Lucey

        Well done Tony. I’d be inclined to treat the gain like a cold shower though!

      • Grzegorz Kolodziej

        “Anyway, no one listened”

        How do you know no one listened? Between 140,000-160,000 people read this blog, so even if a fraction of them were reading your comments (who knows? maybe it’s a 100, and maybe a 100,000), probably quite a few people did listen.
        Though I was the only one who said “thanks” :-)

        I would not have 5,000 to put into into crypto-currencies though (mad volatility aside).

        Even if I had it (which I do not), I certainly would have kept shtum on it. Monitoring phone calls is bad enough (btw, I wonder if you are aware that in this parody of transparent police forces, of whom I am otherwise a friend – but not in this respect, tracking devices don’t require authorisation from a judge, that unlike in the UK, the Judges almost always grant the authorisation when it is required, and that in 2009-2010 the number of emergency” authorisations was double the number approved by a Judge), and that the only people who should monitor certain phone calls in Ireland, the Defence Forces, didn’t do it once in 2012-2013, which begs the question what da f..k they are for (for pensions? – a friend of mine had been looking after one of the highest ranked in Ireland until he – the army man – passed away).

        Well done with Etherum anyway (btw, I do not believe you you have a Leprechaun costume, only foreign tourists have them).

  24. McCawber

    Guys you are looking st effects.
    The cause is the issue.
    The cause is that there is an ever increasing mismatch between supply and demand.
    This phenomenon is not going to go away.
    Worse the people pulling the levers are in denial.
    Print more money and boost demand is their answer.
    It isn’t working and no matter the currency used, the demand PROBLEM will not be resolved.
    Adam good luck to you on the speculation and fair play to you for looking after number one.
    However the currency we use will NOT address the demand issue.

  25. coldblow


    E pluribus unum. You’ve heard of that. Well, here we have ex uno plurimi.

    Keep this up and there will be nobody left because people can sense when something is amiss.

    It’s like good music. Most people don’t like it but if a restaurant or whatever started playing it nobody would complain. They’d just feel uneasy and know that something was wrong and start going somewhere else where they don’t play good music. Now in your case it should be bad music but the analogy doesn’t work that way.

    • Truthist

      Obviously u are in ur ever-so-precious mode ;

      The way I see it ;
      U, Coldblow, are meant to be focusing on writing ur thesis or PhD or book or whatever that u be reminding folks about in ur very stream of consciousness posts about “Introverts” & “Extroverts” or whatever.
      A subject I dare say is not even tenuously related to Economics.
      Instead of getting on with the matter at hand, u have succumbed to temptation to deviate ;
      And, no, don’t get all uppity now ;
      Not in the slightest referring to any antics of the likes of ur perceived wrongly maligned “extrovert” ; Mr. James Saville.
      Just reminding u that u are obviously all stressed out, & thinking too highly of urself & not able to see the wood from the trees because u are bogged down in ur project & are over-compensating by writing about psychology mainly on an Economics blog & thinking too highly about urself for ur profound thoughts rendered on psychology in what is basically an economics blog.

      However,- ur stuff about Raymond Crotty has been very useful.
      But, again because u cannot see the Wood from the Trees, u missed many relevant input that I contributed that is directly linked to Crotty.

      Tony Brogan is totally correct about the Private Central Banking conspiracy ;
      Would u not prefer that the government just issues the currency directly from their Treasury department instead of borrowing with interest this newly created paper from a Racket set up by the Rothschilds ?
      Even that would be a great victory for a nation to achieve.

      And, per Gold & Silver he is also correct ;
      Personally,- I am not in favour of currency that is just Gold backed.
      Tony would accept this I understand.
      I would only allow paper currency to be Gold.

      And, per Fractional Reserve Banking he is also correct.
      It is a ponzi scheme.

      Also,- through the discussions we are uncovering more about the overall diabolical conspiracy that the whole Bankster Racket is.

      If it helps u,- Grzegorz clearly agrees with Tony’s analysis.
      Likewise Cooldude.
      And, Michael Coughlan.

      And so would Raymond Crotty ;

      We are trying to uncover how the nasty master magician, or Jimmy Saville [ a Master Spy also ] if the analogy works better for u, is actually doing his diabolical tricks / Fixes.
      And, we also are trying to highlight it to as many as possible people who will listen.

      If it please u,- I have done my cameo on the blog for now.
      But, will return to contribute again when I am in the mood.
      Same as u I have more pressing matters to perform.

      Until then remain ur Shepard of Ewes,

      Baa … Baa … Baa … Baa

      Ah, will u shut up Ewes 8-)

  26. coldblow

    Psychology is very relevant to economics as it happens. David often writes about the irrationality of animal spirits and there is no lack of irrationality in today’s world (especially among the night shift and the followers of Chris Spivey). As for having done your cameo I know that one when head is cut off seven more spring up to take its place. It’s hopeless I know. I for one won’t be losing sleep but I have said my piece, at least for the time being. Do do realize you’ll end up on here talking to yourself and everyone else will be gone?

  27. coldblow

    Final word on this because reasoning is hopeless.

    I had a neighbour once with manic depression and he used to call at all times of day and night. He was educated and amusing and I sometimes wonder what became of him. Once he wanted a bible and when he returned it later he told me that it was all contained in the Book of Kings. He once asked us to post his letters for him because the security guards at the Coombe Hospital nearby were watching him (I think they could read his thoughts). One of the items was an a terse and abusive postcard to a government minister (his private secretary would have thrown that straight in the bin). The other was a letter and on the envelope, among some drawings of stick people and gibberish, the words ‘Miss Teach’ (my wife was a teacher) and a Mr Mór-Man (I think that was me).

    He used to hang around the office of Bord na Gaeilge and write comments on whatever he could find in the pigeon holes when the receptionist’s head was turned and they had to ban him in the end. One night when we had returned from a night out with my mother-in-law he arrived in the door after us, breathless. ‘Something big’ was going off in the North – could he use the phone? He rang and talked but I suspect there was nobody at the other end of the line. He used to keep containers of spring water on shelves in his kitchen (from Ballyboden or somewhere) because you couldn’t trust the water, and once he invited a Polish girl round for a meal. He took me to meet her and she was in the kitchen, smiling but puzzled, peeling the potatoes. Sometimes I wouldn’t be in the mood for him and when he’d come knocking I’d squeeze up against the wall and keep perfectly still so he wouldn’t see me when he looked in through the letter box (he’d keep it up for minutes on end). (I remember my mother doing that once years ago in England. She hid behind an armchair in the sitting room when one of her odder acquaintances came looking for ‘Sister’. We managed to keep a straight face but he lingered at door looking around suspiciously. Once in a staff room a PE teacher bolted under the table (it was a long one) when the headmaster came in looking for him. He was scurrying up and down trying to make us smile.) On one occasion, when I was ‘out’ (he wanted the bible again) I heard asking next door if they had seen ‘Seamus’ (which isn’t my name) and got a roar of abuse for his trouble. They were rough, especially her.

    If he bought a computer since he surely spends all night studying conspiracy theories, about gold and the Federal Reserve, the Rothschilds and how the Queen is covering up child sacrifices in Buckingham Palace (I hope I’m not giving you any ideas with the last one).

    • Truthist

      As stated in my direct response to you, I wish to retreat now from posting more of my useful contributions so as to focus on priority tasks.
      However, of course,- I intended to return to this article for to view your response to my response.
      And sure enough, you have surpassed yourself in being a typical conceited pseudo-academic with a proverbial ‘Jimmy” Hammer trying to fix it for … your spurious ego.
      Why don’t you go for a long walk in the fresh air ?
      The beach perhaps.
      Get away from all those Introverts & Extroverts ;
      Even the mental ones that you have allowed to have free rent in your mind.
      I thought that Cooldude was a bit harsh on you when he took u to task ;
      Although, I knew that he was 100 % correct in his statements about pedophiles ;
      And, they are much more numerous than one would care to think ;
      Male & Female ;
      And, it is not a genetic pre-disposition ;
      If you wish to consider yourself somewhat privy,- it is psychological ;
      Or to put it more accurately, spiritual.
      A spiritual lacking that is pursued to be satisfied in a most deviant way.

      Anyways, most of the pedophiles are carefully controlled by police handlers & “psychologists-handlers” & “psychiatrist-handlers” & spy-masters for various reasons.
      By the way, Cosy-Shop Ireland has a sweet-heart deal with Cosy-Shop England [ I am not sure about the other countries of UK in the scheme ] ;
      They take our Pedoos ;
      And, we take their Pedoos.
      And there u were pprobably thinking it was only the Catholic Church that shuffled its pedo-priests/brothers/monks around.
      I’m sure that the atheistic directors of schools, & clinics, etc. do likewise in playing musical chairs.

      And, compared to the vagaries of products placed in horizontal markets,- these sicko products of society prove to be reliably useful in the vertical market of statecraft.
      Don’t u know that Jimmy Savile fixed it for a particular country ;
      Even addressed their ministerial cabinet.
      No, Not ours ; Not the Drinks Cabinent.
      Mind u, Mountbatten was facilitated by the Templemore-trained Peelers to be with very young boys in his times in Sligo etc.
      Kincorra was visited by Savile, Prime Minister Heath, Maurice Oldfield [ Head of MI6 ], many of the Shankill Butchers, Mountbatten, Leon Brittan, Captain Nairac, & other spooks & politicos & military & terrorists & perverts ].

      And, the Catholic Church has been deliberately flooded with them by their enemies so as to give it notoriety, & thence cause it to be grieviously damaged as a Church.
      Using deliberately ineffectual psychologists & psychiatrists who were in on the game.
      A long played game.
      A least 100 years old in the playing.
      Simple but devastatingly effective.
      Of course, there have always been, & are, & always will be, the lone wolves who sneak in, when there is no conspiracy to flood the Christian Churches with its enemies ; incl. deviants.

      And the State Craft includes an economic agenda to be fulfilled.

      Go for a walk ;
      The beach on any dry day is good for u.

      Don’t get petty & vindictive.
      Remember, u have ur academic project to complete.

      If it is the beach that u go to ;
      Bring us back a rock will ya ?


      • Antaine

        I love a good conspiracy but I find it hard to believe people would be 100 years planning one. What’s in it for them when they’ll be dead if the plan ever gets to fruition? Can they re-incarnate at will?

        • It is an ongoing business plan not a conspiracy or imagining that results in more money and power each generation. It is kept within the family (or few families, just as the mafia operated from father to son)
          No problem with a legitimate business success but the controllers of the money make their wealth by extracting it from you so you become poorer. The control is not just from the money but from the dishonesty and corruption that is generated in order to keep the scam alive.

          The fiat money scheme operated by the central banks is the biggest Ponzi scheme ever perpetrated upon humanity. So vast that few, when presented with the evidence, can believe it.

          • Truthist

            British Empire was a very patient expansion scheme ;
            The soon knew that the zenith of their enterprise would be seen only centuries later.
            Many a smart business-man operates on similar basis per the germ of the enterprise that he plants, vis. the real manifestation of his business idea will only be in fruition when his grandsons are at the helm ; i.e. if they are not pissing it away.
            However, when it comes to the whole Bankster Scheme it is a touch more diabolical.
            It is about clan / blood / tribe ;
            And yipee, the individuals come in all shapes sizes & colours ; Even as Introverts & Extroverts.

            Please spare a thought for the lone Ewe who may be at a beach near U where he may find the humility he once had & who I hope will bring me back a rock.

  28. McCawber

    TGIF although I personally prefer POETS Day.

  29. Deco

    I have changed my mind. I had hoped for 6-10 storey high apartment complexes. Now, I think that this will have to go further, simply because it will take too long to make an impact.

    Otherwise, move public administration to Athlone, and free up the area between the canals to a massively increased quantity of residence.

    In other words, the city centre becomes the suburb/dormitary town, essentially speaking.

    And Athlone becomes Ottawa – essentially speaking. With the AIT, or NUIG-East becomming the public administration university of Ireland.

    On a side note, the institutional state needs something big to happen to it, to make it better/more efficient.

    McCreevy had it wrong. He should have moved the lot to Athlone (or Portlaoise).

    • Deco

      Imagine D2 as a residential area, and the employers moved out to regional centres. The city centre would be beautiful within a decade.

      And the regions would thrive too.

  30. Deco

    Prices will only be affordable in Dublin if employment moves out, or construction moves up.

  31. mike flannelly


    Can a couple with joint average national income earnings afford a three bed semi in,

    PARIS ?
    NEW YORK ?
    LONDON ?
    ROME ?
    MADRID ?

    WARSAW ?
    LISBON ?

    • Grzegorz Kolodziej


      Owning three-semi bed? No way, unless they are in politics.

      However, when it comes to renting apartments, I haven’t done any calculation recently, but I would say that that young people in Dublin with no family back-up are probably more screwed now.

      Paris? A friend of mine has been renting a studio there for 600 euro a month in a good enough district, and that’s after Paris had got really expensive. Where would you find that in Dublin?

  32. mike flannelly

    The 31st Dail with a mandate to sort out the GROSSLY OVERVALUED DEBT CRISIS of 2006 to 2010







  33. mike flannelly


  34. mike flannelly






    ” STOP ? “

  35. survivalist

    Again I’m just not at all sure about the figures being offered here. I wonder what the source is? Has anyone any good datd on this? The numbers in this article do not accord with the Private Residential Tenancies Board data and the CSO figures do not appear to be gathered beyond 2011?

    However the problem in my opinion is not a housing (shortage) problem, but rather Irelands old problem of…Dublin.

    The degree of centralization which exists with the city as the now European hub of operations ensures that Dublin sucks a disproportionate amount resources and energy from the rest of the nation. Dublin enables the leaching of Ireland.

    Its primary function in early modern times (1700 onwards) which affirmed its establishment was as conduit to feed the British Empire (all of) Irelands resources -all that has changed in our time is the ruling empire.

    It accounts for almost half of Irelands GDP with approx. 25% of the population this does not mean Dublin is producing vast wealth for the nation but is a measure of the consumer spending, business investment, and government spending which is pumped into the city.

    Dublin ‘centricity’ is killing this country I believe a reflection on Dublin’s role in Irish recent history as portrayed in the media will reveal to most people that it has been especially promoted through propagandistic means being attached to symbolic events and images which portray it is Irelands engine, cultural centre and that Dublin’s opinion/culture is synonymous with Irelands opinion/culture.

    A possibly noteworthy example is the degree to which Dublin figures in Bord Failtes ‘investment’ plans, despite the fact that Dublin simply does not contribute to tourist activity except of course in one predictable area.

    The vast majority of tourist revenue (nearly 75%) comes from spending on food/beverages and accommodation-Dublin based business capture 62 % of this, and receive a subsidy in the form of 23% of Bord Failtes budget for the pleasure.

    Yet the number one activity by a factor of four from the second most popular activity (cycling) is hiking/cross country walking. Basically what the tourists come for (rural Ireland) is subordinated to the business interests of Dublin.

    • Truthist

      Excellant post ;

      A national newspaper would be lucky to get such a letter.
      Even to have it as an “opinion-piece” article.

      I also have to say that I was very impressed with the vast bulk of the posts to David’s present article.

      I make notes from what I class as valuable information & argument.
      Sometimes,- I feel that the post is so worthy that I copy & paste it into a word-processing document for contemplation & reference purposes.
      Noting of course the inspired author. 8-)

      Obviously, i am not the only one who is of the habit of these practises.
      Many who are just readers of the blog I expect do likewise.

    • McCawber

      What strategic solutions would you think could counter the Dublin centricity.
      I don’t mean quick fixes btw.

  36. mike flannelly


    National government backed banks sell 25 yr fixed mortgages @ 2%.

    1060 euro mth for 250000euro.

    + property tax
    + house insurance.

    Shelter needs still less than 30% of net 4000e average earning couples take home pay.

    It is not magic.

    It is a REAL solution.

    We are in a ” 0% ” zone.

    Its mad not to help the citizens cashflow plus housing needs, that in turn really helps the REAL ECONOMY.

    For homelessness and mortgage arrears

    REAL VALUE DEBT is the solution.

  37. If a government has its own currency and can print on demand then there is no reason to issue bonds or levy taxes. It can always print what it wants.
    Bonds taxes and national debts are all fictions That allow the state to coerce its subjects under threat of fine or imprisonment.
    Thus we are all kept in thrall.

    • Truthist

      Almost agree ;

      I would qualify that the printed currency — actually “Money” [ to the extent that the special stuff is actually in it ] should be consist Gold
      Gold integrated into it.
      And,- treat it as Hugo Salinas Price would the Silver Coin.

      The “Gold” Paper Note has no unit stated on it other than its Mass of Gold.

      As for ur “Conspiracy Statement”,- I concur that it is “fact”.

      Keep going in this vein I suggest.
      Not so much reporting on the market fluctuations of Gold & Silver.

      We are trying to uncover exactly how the Magician or Bookie or Jim-will-fix-it does his nasty stuff, & we then highlight it to the public, & we suggest solutions.
      Requires answering the call for some humility & curiosity to start understanding the whole Super-Scam / Super-Conspiracy [ Factual too ].
      Lazy minds prefer to talk about the frivolous or superficial stuff.

      Imagine the idiot who thinks he understands “how the Bookie always wins overall & to the punters’ overall cost” by wrongly focusing on why the bookie does not give bigger & more bets for the punters to pay later.
      Worse,- imagine the idiot who writes a thesis on the bookie system by focusing on the personalities of the typical book-makers.

  38. [...] could become a developer of some vital social infrastructure (otherwise known as housing).   David McWilliams presents many familiar arguments and uses typical [...]

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