Tuesday, November 17, 2015

17/11/15: Irish Rents: Welcome to More Consumer Whacking by Government


In efficient market, pre-announced policy changes get priced into market valuations before the policy change takes place. This was the case with the Gazprom's Nord Stream pipeline (working paper on this is forthcoming) and this is also true for much more liquid markets for rents.

Behold, Irish Government's latest stab at creating policies-driven evidence (or in other words, screw ups): http://www.independent.ie/business/personal-finance/property-mortgages/landlords-pile-on-rises-ahead-of-new-rent-controls-34206919.html.

As expected, Irish landlords were quick to price in future freezes in rents in advance of such freezes coming into force. Which means that already beleaguered Irish renters can now pay even more in rents over an even longer time horizon. Double whacking of consumers by the incompetent policy designers continues unabated...

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