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Archive for the ‘Ronan Lyons’ Category

Can Ireland improve its competitiveness while raising taxes?

By Ronan Lyons

if you were looking for just two indicators to summarize how Ireland’s economic model of the 1990s, based on international competitiveness and fiscal rectitude, became perverted in the 2000s, the following two would be the ones that I would use. Firstly, according to OECD figures, the average wage in Ireland grew by 37% between 2000 and 2006, while in France and Germany, the anchors of the Eurozone, average wages grew by 15% during the same period. Secondly, while the typical two-income, two-child household in France paid over a steady 22% of their income in tax during the 2000s, and their German counterpart paid one third in tax, by 2006 their Irish counterpart was paying barely 10% in tax.

full article at source:http://www.ronanlyons.com/2011/11/01/can-ireland-improve-its-competitiveness-while-raising-taxes/

latest Daft.ie House Price report

Ronan Lyons has posted a new item, ‘Irish house prices: calling the bottom and
worrying about the next bubble’

The latest Daft.ie House Price report was released yesterday. The commentary is provided by Sheila O’Flanagan, one of Ireland’s best known exports as an author of fiction but also in a previous life a sovereign bond trader. Her commentary is well worth a read and
focuses on the role of fear in the market.The quarter-on-quarter fall in house prices in the third quarter of the year was 3.5%. This is once again in the 3-5% range, i.e. house price falls were of a similar scale to the previous 12 quarters. For the third quarter in a row, the fall in Dublin was greater than the fall outside Ireland’s five main cities. Indeed, there are only two quarters (the final two of 2010) where the average asking price in Dublin fell
by less. As a result, asking prices are now 51% below the peak on average in Dublin, compared to 45% elsewhere in the country.

full article at source:http://www.ronanlyons.com/2011/10/04/irish-house-prices-calling-the-bottom-and-worrying-about-the-next-bubble/

Ronan Lyons take on the latest property fire-sale

Ronan Lyons has posted a new item, ‘Is Ireland running out of cash buyers?

Insights from another property fire-sale ‘Last week saw the third of the so-called “fire sale auctions” in Ireland in recent months. While there are those who are set
against these types of auction
, viewing them as some sort of return to the evictions which haunted the Irish countryside in the 1800s, most see them as the crystallization of what everyone knows, i.e. that property prices have fallen dramatically in Ireland over the last five years. There are those, such as myself, who believe they offer a unique insight in to real transaction prices.

In particular, on previous occasions, I’ve used the model of the Irish property market that
I’ve developed for my academic research (which is related to the model that
underpins the Daft.ie Report) to see what we can infer from these auctions
about exactly how far Irish property prices have fallen and where the fire-sale
prices are relative to current asking prices.In this post, I’ll do the same analysis on the sixty or so residential properties sold last week and I’ll also take stock of the three auctions so far, and see if there are any trends.

Full article at source: http://www.ronanlyons.com/2011/09/27/is-ireland-running-out-of-cash-buyers-insights-from-another-property-fire-sale/

Ronan Lyons on Michael O’Leary’s suggestions to quit Ireland

Ronan Lyons has posted a new item, ‘Should we let Michael O’Leary run our income
tax system?’

This post examines Michael O’Leary’s suggestions in relation to Ireland’s
income tax system,
in particular making it simpler and ensuring everyone
contributes but not too much! It uses recently published Revenue Commissioners
figures for income in 2008 to estimate who would like the proposal and who would
hate it, Government included. It concludes with a few tweaks to the proposal,
including in relation to income earned through social welfare.

full article at source:http://www.ronanlyons.com/2011/08/23/should-we-let-michael-oleary-run-our-income-tax-system/

A taste of things to come here in Ireland

A taste of things to come here in Ireland

According to David Mc Williams’s latest article” Collapsing house prices? We ain’t seen nothing yet

A comprehensive report on the Irish property market is out and it confirms the total destruction of wealth of a certain generation. According to the wonderfully detailed work done by Ronan Lyons at Daft.ie, asking prices countrywide fell by just over 4pc in the second three months of the year.

The average asking price nationally in the second quarter of 2010 was just over €224,000 — 36pc below its 2007 peak. The acceleration in price falls will come as little surprise, but the question now is how can a generation whose balance sheet has been so totally vaporized ever start spending again?

David has given some examples of what an investment in such a property to –day would yield (approx 7 %) for an investor and thus come to a realistic current price for the said property namely €135,620.

But as I have already highlighted my specific and well tested way of calculating the proper price of any property .(See http://thepressnet.com/2010/04/05/lenihan-raising-house-prices/) (namely 10 X times the annual rent less costs like taxes and fees) will give you a very close figure to the most realistic price for a property

So if we were to look at what an investor should receive if they were to invest now at these prices with a possible rent of 900 euro per month perhaps coming in from this investment your total return would be 900 X12 (months) = 10,800:00

Less property tax (currently 200:00 Euros)

And maybe even management fees in the case of apartments in the city approx 2,000 so all told I would say you would have a net return of 8,600 Euros you might also consider income tax at 30%.but even if there are no management fees you will certainly have to pay income tax

In any case I would come to a figure of 8,600 X 12 months = 103,200:00 been the maximum I would pay for that property but in the current climate and baring in mind that there are over 250,000  housing units unsold and we have approx 60,000 people leaving the country ,and the government pushing rents down by as much as 30%  in some areas ,unemployment  true figures heading up to 20% plus, I would expect that these prices still have a long way to go and I’m afraid to say lower much lower, with a bottom of around 65,000 euro per unit

These prices would then bring us back to the average prices we currently see in places like Germany and France

David is usually accused of being a profit of doom ,well I would consider his latest announcements on house prices as been quite optimistic very  optimistic

Here is a video clip I picked up describing the current situation in the US and I believe it would support my expected outlook of things to come

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