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Affordable housing to fizzle out soon with no new builds?

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  • 04-07-2008 1:53pm
    #1
    worded
    Registered Users Posts: 4,573 ✭✭✭


    Is it too late to act now? or is there another year or so left?


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    #2
    hermit
    Closed Accounts Posts: 187 ✭✭hermit


    I'm not sure what stock of affordable housing is available in Dublin or elsewhere but from my personal experience it would appear to be quite a lot. I applied for the scheme last October. But have since given up with it as I am buying a property outside of the scheme and outside of the County of Dublin.

    However, In recent months I have had no less than 10 call from the affordable housing section of DCC asking me about my applicationa and almost urging me to register for the current draw of properties and updating my application --- looks to me like they want buyers etc...


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,283 Mod ✭✭✭✭The_Conductor


    The rumours going around are that Developers are finishing off a lot of their current estates specifically targetting them at the AH market (as normal buyers are having massive liquidity issues- particularly with the abondonment of the 100-110% mortgages).

    S.


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    #4
    jackal
    Registered Users Posts: 793 ✭✭✭jackal


    Yes, I would be very wary of snapping up an affordable housing "bargain" at the moment. Developers are quietly offloading unsellable properties onto the scheme. They give a valuation from 2006 and then tell you you are getting it at a 40% discount. Sounds good for them, sounds good for you, is based on a fantasy price. You can probably get something similar on the open market for only 10% more than the affordable price but with none of the restrictions.

    The reason why you are getting so many phone calls is that the properties they want to show you are probably shoeboxes that have been turned down by everyone they were offered to, and they are hoping someone will take them.


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    #5
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    jackal wrote: »
    The reason why you are getting so many phone calls is that the properties they want to show you are probably shoeboxes that have been turned down by everyone they were offered to, and they are hoping someone will take them.
    Since when were the city and county councils part time real estate agents? Who is paying their bills here, exactly? I think this matter needs to be looked into a bit further.


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    #6
    OTK
    Closed Accounts Posts: 556 ✭✭✭OTK


    SimpleSam06 wrote: »
    Since when were the city and county councils part time real estate agents? Who is paying their bills here, exactly? I think this matter needs to be looked into a bit further.
    The local authorities have annual affordable housing targets. Irony is that housing is becoming more affordable by the day. The idea of affordable housing is either based on a facile misunderstanding of economics or else it was a ploy to enrich developers. Lottery based welfare for the middle classes.


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    #7
    worded
    Registered Users Posts: 4,573 ✭✭✭worded


    OTK wrote: »
    The local authorities have annual affordable housing targets. Irony is that housing is becoming more affordable by the day. The idea of affordable housing is either based on a facile misunderstanding of economics or else it was a ploy to enrich developers. Lottery based welfare for the middle classes.

    Affordable housing = Lottery based welfare for the middle classes. What a great line!


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    #8
    worded
    Registered Users Posts: 4,573 ✭✭✭worded


    http://www.rte.ie/news/2008/0704/jobs.html

    The number of people signing on the Live Register rose by more than 19,000 last month - the highest monthly increase ever.


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    #9
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,283 Mod ✭✭✭✭The_Conductor


    Guys- while I accept the parallel thinking regarding the unemployment stats and the state of the economy at large and the effect these have on the housing market- please try to keep the posts of a directly relevant nature. If you want to discuss the Macro and Micro economic situation in the country- there are far more pertinent forums other than the Accommodation/Property Forum in which to do so.

    S.


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    #10
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    There is a big advertising push for 'affordable homes' now.

    Think some commentator said that the AH schemes are 85%+ based on apartments so if you are going to go for it, think long and hard about snapping up that apt as its for the long term and take into account of sky high managament fees.


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    #11
    worded
    Registered Users Posts: 4,573 ✭✭✭worded


    gurramok wrote: »
    There is a big advertising push for 'affordable homes' now.

    Think some commentator said that the AH schemes are 85%+ based on apartments so if you are going to go for it, think long and hard about snapping up that apt as its for the long term and take into account of sky high managament fees.

    So AH people get 15% off market asking price ? Bad deal me thinks.

    Not paying management rip off fees to anyone by getting an apt.

    I hear the govt is going to act now and bring into law something for management company control. Horse has well and truely bolted there with loads of cowboys around. Someone I know bought an apt and the fees are so high and its run by the builders brother (so protecting the builder). Block in really bad repair despite 1000s in fees.


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    #12
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    worded wrote: »
    So AH people get 15% off market asking price ? Bad deal me thinks.

    Nope:)

    I meant that 85%+ of actual offerings are apts rather than houses. and we know that most(not all) apts would be very small for families so if you settle down with a partner in th future, keep that in mind if you purchase one as ye will need space!


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    #13
    worded
    Registered Users Posts: 4,573 ✭✭✭worded


    gurramok wrote: »
    Nope:)

    I meant that 85%+ of actual offerings are apts rather than houses. and we know that most(not all) apts would be very small for families so if you settle down with a partner in th future, keep that in mind if you purchase one as ye will need space!

    Ive apartmentitus. Lived in one for too long. Even if I see a pic of an apt block I shudder. On the second floor, Ive 4 neighbors all around and sooner or later one of them gets a stereo and likes base.


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    #14
    Victor
    Registered Users Posts: 78,353 ✭✭✭✭Victor


    SimpleSam06 wrote: »
    Since when were the city and county councils part time real estate agents? Who is paying their bills here, exactly? I think this matter needs to be looked into a bit further.
    The housing department's job is to get people housed.


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    #15
    jdivision
    Registered Users Posts: 4,260 ✭✭✭jdivision


    SimpleSam06 wrote: »
    Since when were the city and county councils part time real estate agents? Who is paying their bills here, exactly? I think this matter needs to be looked into a bit further.
    People buying affordable units pay a fee for the council's time, it's included in the purchase price


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    #16
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    Victor wrote: »
    The housing department's job is to get people housed.
    So you're sure its not their job to offload unlivable and unsaleable shoebox apartments from developers who are buddies with the local councillor on misinformed people who think they are getting a good deal?
    jdivision wrote: »
    People buying affordable units pay a fee for the council's time, it's included in the purchase price
    I meant look into it, not read from the regulations.


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    #17
    Firetrap
    Closed Accounts Posts: 4,442 ✭✭✭Firetrap


    I wonder as house prices tumble, if the AH scheme will disappear altogether? Or if not disappear, reduce in scale. Perhaps now, people on the sort of wages where they once could afford to buy their own place without help will be able to do so again. AH is great if the location and house/apartment suit your needs but if your circumstances change, the strings that are attached can come back to bite you.


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    #18
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,283 Mod ✭✭✭✭The_Conductor


    Firetrap wrote: »
    I wonder as house prices tumble, if the AH scheme will disappear altogether? Or if not disappear, reduce in scale. Perhaps now, people on the sort of wages where they once could afford to buy their own place without help will be able to do so again. AH is great if the location and house/apartment suit your needs but if your circumstances change, the strings that are attached can come back to bite you.

    I agree with you bigtime.....
    But- the historic average price is between 5 and 7 times the average industrial wage for a 3 bed semi in a reasonable enough area. So- make that 180-250k for a 3 bed semi....... You know we're actually getting there.......

    The big thing which is not reflected in prices just yet is a 10-15% discount on second hand prices over new prices (to take stamp duty and builder guarantees into account). If and when this really kicks in- a level of realism will have returned to the market.

    What will be really interesting is whether the OECD recommendations regarding TRS for mortgage holders and the eligibility of mortgage interest as a tax deductable cost for landlords will be brought in. The Department of Finance figures show this would save the exchequer 8-10 billion a year. Might make the politicians a tad unpopular though........


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    #19
    Victor
    Registered Users Posts: 78,353 ✭✭✭✭Victor


    Firetrap wrote: »
    Perhaps now, people on the sort of wages where they once could afford to buy their own place without help will be able to do so again.

    How do you figure that?

    Expensive house, cheap interest rates => cost = €X per month
    Cheap house, expensive interest rates => cost = €X per month


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    #20
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    Victor wrote: »
    How do you figure that?

    Expensive house, cheap interest rates => cost = €X per month
    Cheap house, expensive interest rates => cost = €X per month
    Its not just the interest rates though, its that lending criteria have tightened. Also, for example a €25k deposit as 10% of total is better than €25k deposit as 5% of total. There are also no guarantees that the total amount you pay for a smaller mortgage on higher interests rates will follow the inverse in a linear fashion, prices are falling a lot quicker than interest rates are climbing.


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    #21
    jdivision
    Registered Users Posts: 4,260 ✭✭✭jdivision


    Are you sure? most mortgages are up 60 per cent (from c3% to circa 5% at least) I haven't seen many people suggesting house prices are down 60%


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    #22
    mollydolly271
    Registered Users Posts: 290 ✭✭mollydolly271


    worded wrote: »
    So AH people get 15% off market asking price ?Bad deal me thinks.

    Not paying management rip off fees to anyone by getting an apt.

    I hear the govt is going to act now and bring into law something for management company control. Horse has well and truely bolted there with loads of cowboys around. Someone I know bought an apt and the fees are so high and its run by the builders brother (so protecting the builder). Block in really bad repair despite 1000s in fees.



    33% ACTUALLY


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    #23
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,283 Mod ✭✭✭✭The_Conductor


    The percentage varies depending on a lot of factors.


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    #24
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    jdivision wrote: »
    Are you sure? most mortgages are up 60 per cent (from c3% to circa 5% at least) I haven't seen many people suggesting house prices are down 60%
    You aren't just paying off interest when you repay a mortgage, and again there is the initial deposit percentage to consider. And thats assuming that someone bought at 3%.

    Paying off 400k at 4% (assuming they bought around 2006, and weren't getting loans direct from the ECB), they would be paying off in the region of €2000 a month. If they bought the same property for €300,000 (assuming a drop of 10% or so per annum, plus a minimal deposit saved) at 5% today, they would be repaying €1600 or so over thirty years, saving a whacking great €144,000.

    These are all approximate figures, but you get the idea. If you could save even €50k, wouldn't you?


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    #25
    jdivision
    Registered Users Posts: 4,260 ✭✭✭jdivision


    Once again you've changed your point. Is there a less informed poster on this forum?


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    #26
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    jdivision wrote: »
    Once again you've changed your point. Is there a less informed poster on this forum?
    If you can't keep up, I'll slow down a bit for you.


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    #27
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,283 Mod ✭✭✭✭The_Conductor


    Guys- forum rules are if you disagree with a post- you refute the post with facts and do not attack the poster. If there are any more personal remarks about other posters here- you will be banned from this forum for a term to be determined by the mods.

    Its not that difficult to be civil to each other........


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    #28
    Boardom
    Registered Users Posts: 54 ✭✭Boardom


    In the run up to the affordable housing draws they have a list and you tick what you are interested in so it should be easy to avoid the shoeboxes that way.

    The shoebox I got from affordable housing is 116m2 :D

    The clawback percentage is indeed based on an inflated price but I don't intend selling during the clawback period so I don't care.


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    #29
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,283 Mod ✭✭✭✭The_Conductor


    Boardom wrote: »
    In the run up to the affordable housing draws they have a list and you tick what you are interested in so it should be easy to avoid the shoeboxes that way.

    The shoebox I got from affordable housing is 116m2 :D

    The clawback percentage is indeed based on an inflated price but I don't intend selling during the clawback period so I don't care.

    Totally aside from the clawback- having it revalued at a lower level means your mortgage LTV ratio is a good deal lower- potentially entitling you to better interest rates.......


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