Adam Smith in 1776 wrote:
Fast forward to Ireland 241 years later in 2017
An Inquiry into the Nature and Causes of the Wealth of Nations
BOOK I. OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.
CHAPTER VII. OF THE NATURAL AND MARKET PRICE OF COMMODITIES.
The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which must be paid in order to bring it thither. Such people may be called the effectual demanders, and their demand the effectual demand; since it maybe sufficient to effectuate the bringing of the commodity to market. It is different from the absolute demand. A very poor man may be said, in some sense, to have a demand for a coach and six; he might like to have it; but his demand is not an effectual demand, as the commodity can never be brought to market in order to satisfy it.
When the quantity of any commodity which is brought to market falls short of the effectual demand, all those who are willing to pay the whole value of the rent, wages, and profit, which must be paid in order to bring it thither, cannot be supplied with the quantity which they want. Rather than want it altogether, some of them will be willing to give more. A competition will immediately begin among them, and the market price will rise more or less above the natural price, according as either the greatness of the deficiency, or the wealth and wanton luxury of the competitors, happen to animate more or less the eagerness of the competition. Among competitors of equal wealth and luxury, the same deficiency will generally occasion a more or less eager competition, according as the acquisition of the commodity happens to be of more or less importance to them. Hence the exorbitant price of the necessaries of life during the blockade of a town, or in a famine.
When the quantity brought to market exceeds the effectual demand, it cannot be all sold to those who are willing to pay the whole value of the rent, wages, and profit, which must be paid in order to bring it thither. Some part must be sold to those who are willing to pay less, and the low price which they give for it must reduce the price of the whole. The market price will sink more or less below the natural price, according as the greatness of the excess increases more or less the competition of the sellers, or according as it happens to be more or less important to them to get immediately rid of the commodity. The same excess in the importation of perishable, will occasion a much greater competition than in that of durable commodities; in the importation of oranges, for example, than in that of old iron.
When the quantity brought to market is just sufficient to supply the effectual demand, and no more, the market price naturally comes to be either exactly, or as nearly as can be judged of, the same with the natural price. The whole quantity upon hand can be disposed of for this price, and can not be disposed of for more. The competition of the different dealers obliges them all to accept of this price, but does not oblige them to accept of less.
Limit residential property supply, especially where it is needed. Ignore increases in demand for residential property, especially where it is needed. Provide incentives for people chasing limited supply of residential property, especially where there is greatest demand and least supply.
Unnecessarily increase residential property development costs so capital is diverted down the easier route of acquisition rather than development.
What could go wrong?http://www.independent.ie/business/pers ... 36958.html
'Stimulating demand creates a bigger problem' - Property expert on Help-to-Buy scheme as 10pc house price jump forecast
Hopeful house buyers "will find it tough to find something", according to a leading expert on the Economist at Trinity College, Ronan Lyons, predicts that house prices will continue to rise between 5pc and 10pc over the next 18 months.
However, house prices in the capital have risen dramatically over the past three years - increasing by an average €102,000, or 46.2pc, since the end of 2013 - while those outside Dublin rose by an average of €48,000, or 36pc.
"It's important to distinguish the difference between Dublin and the rest of the country," Mr Lyons told RTE's Today with Sean O'Rourke.
"In Dublin there was a 5pc increase in prices in 2016 and that compares to a 2.5pc increase in 2015 so there is an inflation in cost in the capital. But it's still well below house price inflation outside Dublin - a 10pc increase in 2016.
"In practical terms it means that we saw countrywide an 8pc increase and the average asking price nationwide is 220k compared to a low of 160k about two years ago."
The same culprits responsible for pushing up house prices last year - lack of supply and a growing population - will lead to more double-digit increases this year, according to survey author Ronan Lyons.
Increases in house prices are particularly expected outside the capital, which saw double-digit inflation in 2016, according to Daft.ie.
The Help To Buy scheme should more correctly be called the Help Sellers to Make More Money scheme or Force Buyers to Compete More scheme. It is the state-sponsored financial equivalent of a wellie throwing competition.
Just as Cato the Elder was said to have ended every speech with “Delenda Est Carthago”, every post here should end with “Domus Sunt Construendae”.
Simpleton Simon is no Scipio Aemilianus. He is not even a Bob The Builder.