DLRC affordable housing has 'no demand'

gurramok

http://www.irishtimes.com/newspaper/ireland/2010/0209/1224264030113.html

IT wrote:

A SOUTH Dublin local authority has said it has been unable to sell “affordable housing” valued at €27.5 million.

The one- and two-bedroom apartments cost €132,000- €180,000, and had been offered to all 1,900 applicants on the affordable housing waiting list. They had also been reduced in price to keep them 20 per cent cheaper than open market value.

The council had subsidised the cost of each unit by €15,000-€30,000 and could not afford to reduce prices any further, councillors were told.

Director of housing Charles McNamara said every effort had been made by staff to increase sales and fast-track closings. But a number of factors were preventing sales. These included difficulties for potential purchasers in securing sufficient, or any, funding from mortgage lenders. The drop in house prices on the open market had also caused problems and applicants were reluctant to commit to a purchase because of uncertainty of employment or because they were waiting to see if market prices dropped further.

“It is now clear there is no interest from affordable [housing] applicants for these units,” Mr McNamara said.

He said the council could consider four options to deal with the unsold homes, including renting the properties to social housing applicants, selling them to a voluntary housing body on the open market, or offering them to affordable housing applicants on a “let-to-buy” basis.

Expect the above to be replicated across DCC, SDCC and Fingal. They don't say when that market value was 'applied'. And they don't mention the factors of the quality of the builds and the mgt fees they charge, a further put-off to applicants. They gambled millions of taxpayers money and they lost.

kmick

If they set a correct price the buyers will come. I mean they got them for free so it cant be very hard can it?

subway

IT wrote:

The council had subsidised the cost of each unit by €15,000-€30,000 and could not afford to reduce prices any further, councillors were told.

...

a number of options including

• renting the properties to social housing applicants,
• selling them to a voluntary housing body on the open market,
• or offering them to affordable housing applicants on a “let-to-buy” basis.

interesting that a loss cannot accepted on these (because they are worth it, no doubt) and that the only options are to hold onto them, sell them to some unknown/uniwtting charity or get FTBs to buy them at full price (deferred)...

i wonder will the council be liable for water charges, owership tax, mangement fees and whatever else on these. on top of the falling value.

a conservative (IMO) estimate puts house drops at 10% this year, so thats 2.75m they will need to eat (assuming the current valuation is good)
conservative estimate of 1000eu pa for charges and that brings another cost of 1.5m (27.5m divided by 182k = 1500~ houses)

so they could cost themselves 4m this year by holding onto these things
why not take a 4m hit on the price tag and try to sell the bastards.

Highly Salami

I'd be very interested in buying a 1 or 2-bed appt. at these prices! but I already bought a 1 bed in 2002, would it be possible for me to qualify?
I'm astonished they can't sell them, incredible!

J-blk

Highly Salami wrote: »

I'm astonished they can't sell them, incredible!

Why? €132,000 for a 1-bedroom s***box (though ok, I don't know what these apartments look like, they could be lovely and spacious but I very much doubt it...) is hardly the bargain of the century. It's only because boom prices (and even now, open market prices) had gotten to such insane amounts that prices like these actually seem like "good value" to people...

super_furry

Highly Salami wrote: »

I'd be very interested in buying a 1 or 2-bed appt. at these prices! but I already bought a 1 bed in 2002, would it be possible for me to qualify?
I'm astonished they can't sell them, incredible!

Really? Wow. Well if you're that eager you can get the 'affordable' prices on the open market without all the catches and clawback. You will, however, be paying stupid money for a poorly build shoebox that will, most likely, put you in negative equity.

Highly Salami

super_furry wrote: »

Really? Wow. Well if you're that eager you can get the 'affordable' prices on the open market without all the catches and clawback.

Can you show me an example of this in Dublin? I've searched myhome.ie and daft.ie etc. and cant find any.

Highly Salami

Sandyford, Stepaside and Leopardstown are areas that pique my interest, afaik some of the affordable housing are in these areas, but similar appts are much more on the open market.

dudara

There was very little in the line of 'quality' apartments built in Ireland during the last few years. For the most part, developers built shoebox apartments which were only designed to get people on the property ladder rather than being about a proper way of living.

In particular, one-bed apartments were one of the greatest cons of recent years. Only a very small minority of people would have lifestyles and plans that suit a one-bed.

No wonder that people aren't interested!

Macha

subway wrote: »

interesting that a loss cannot accepted on these (because they are worth it, no doubt) and that the only options are to hold onto them, sell them to some unknown/uniwtting charity or get FTBs to buy them at full price (deferred)....

Why not hold onto them and rent them out as social housing? It's what most other countries in the EU do and it would nice for local and central government in this country to retreat a little from their 'the-market-is-all-knowing' mantra.

super_furry

Highly Salami wrote: »

Can you show me an example of this in Dublin? I've searched myhome.ie and daft.ie etc. and cant find any.

You won't because of the hilarious asking prices. Knock 15% to 25% off the asking prices and you get them.

bobbysands81

So Local Authorities are trying to get value for taxpayers money and they're being slated for it???

Leasing here we come...

SkepticOne

The one- and two-bedroom apartments cost €132,000- €180,000, and had been offered to all 1,900 applicants on the affordable housing waiting list. They had also been reduced in price to keep them 20 per cent cheaper than open market value.

The council had subsidised the cost of each unit by €15,000-€30,000 and could not afford to reduce prices any further, councillors were told.

Someone needs to tell them that the open market value is the value that they actually sell at. If they are not selling it is because they are priced above the market value which has dropped significantly in recent years.


What I think they are mistaking for market value is the developers list price. The developer tells the local authority that these flats priced at say €300,000 (whatever the developer decides the price to be) and the local authority then knocks off a percentage to bring them down to €250K.


The actual market price may only be about €150K or less and so the properties aren't selling. The real shame is that it is the public's money that is being wasted by the councils stupidity demonstrated here.

Idbatterim

What happens if I put my name on the affordable housing list and keep on declining what they offer?

D3PO

Idbatterim wrote: »

What happens if I put my name on the affordable housing list and keep on declining what they offer?

check the terms and conditions of the specific program. Most of them say you will be offered x properties if you dont accept any of them you will be removed from the program.

Idbatterim

Im looking on daft regularly, the prices are still boom prices that some people are looking for, a 2bed apt in Sandyford for 450 - 500k! Had I paid the prices during the boom & was an owner occupier I jump from my balcony! half a million borrowed over the lifetime of a mortgage will be atleast a million! these guys have a 1000,000 noose around their neck for a started property, shoe box flat!

mathie

Highly Salami wrote: »

I'd be very interested in buying a 1 or 2-bed appt. at these prices! but I already bought a 1 bed in 2002, would it be possible for me to qualify?
I'm astonished they can't sell them, incredible!

Hi Brendan!

Highly Salami

mathie wrote: »

Hi Brendan!

Brendan?
who?

jdivision

http://www.affordablehome.ie/My-Local-Authority/Dun-Laoghaire---Rathdown-County-Council/Homes-Available-in-Dun-Laoghaire---Rathdown-Area.aspx

They're completely overpriced.

Salami, you bought a place before so you don't qualify

recedite

gurramok wrote: »

They gambled millions of taxpayers money and they lost.

kmick wrote: »

I mean they got them for free so it cant be very hard can it?

SkepticOne wrote: »

The real shame is that it is the public's money that is being wasted by the councils stupidity demonstrated here.

Does the council actually purchase them from the developer or are they free as part of the condition of getting planning permission?

sharper

recedite wrote: »

Does the council actually purchase them from the developer or are they free as part of the condition of getting planning permission?

"Affordable" housing is generally purchased, you might be thinking of social housing which is different.

The councils wasted huge sums of money buying up apartments at ridiculous rates.

Idbatterim

Is it only apartments that are offered as afforable housing or also houses? Id be reluctant to go for an apartment given how much of a stop gap solution they are! & now that the myth about the property "LADDER" has been exposed! The property ladder was meant to be an upwards only game, it now appears it is like Snakes and ladders, you might be able to upgrade in a few years, but you may have to sell or let it out and live with the parents etc if the s**t hits the fan!

jdivision

So it's like any other investment really, except it's the biggest one most of us ever make

stepbar

jdivision wrote: »

So it's like any other investment really, except it's the biggest one most of us ever make

A lot of estate agents are still failing to grasp this concept and others are failing miserably to pass this on to their clients.

On a related note, this apt "apparently" sold for 159k having dropped to 150k in the months prior - http://www.myhome.ie/residential/brochure/3-gandon-close-harolds-cross-dublin-6w/133791. I bid 100k back about 3 months ago. Bidding war "apparently" :rolleyes:

That's the sort of craziness that keeps the market from reaching "realism".

SkepticOne

recedite wrote: »

Does the council actually purchase them from the developer or are they free as part of the condition of getting planning permission?

It has been a while since I looked into this but my understanding is that none of them were ever free. A certain proportion had to be made available at cost+a reasonable profit basis. The developers bitterly opposed this during the boom but now of course it is a different story.

JJ

Up to last year, the wif and I were on every affordable housing scheme in the Dublin area including DLR. Most of the places on offer were apartments, which didn't suit us because we have a daughter with disabilities.

We were offered a 3 bed house in Goatstown for 300 (they went for 500 at the height of the boom apparently) and it was a nice house but, like most new housing estates, all the houses were samey and you felt a little isolated as there as there was only 1 way in and 1 way out of the estate. They told us that that would be the absolute last house they'd (probably) ever have on offer but we declined and bought a 3 bed house elsewhere for a cheaper price and it's much closer to my work.

I remember looking through the house and getting all excited about the storage space it had (I really like having lots of storage space) but the wif brought me crashing down to earth when she reminded me that the location probably didn't suit us.

shoegirl

I am guessing that most of these are being offered at prices that are still above the local market rates. Also getting onto the lists seems complicated and difficult. Do they still have tight income limits? It always astonished me that here in Cork the income limit was 40k but most of the houses on offer were originally around 160k upwards, which effectively meant that the applicants couldn't get a mortgage unless they had huge deposits. (People earning 40k and presumably renting generally wouldn't tend to have the same again in savings).

The mortgage structure may be killing this segment. Wasn't it some kind of deal with BOI? Perhaps if this was moved to something like the old council loan scheme or a rent-to-buy it might be more effective? I do feel the old deposit/mortgage over 25 years based model could be replaced with something more in keeping with the fact that high rents are probably reducing capacity for savings.
Selling to housing schemes are not a bad idea, but why not some kind of buy-to-let scheme or housing co-op? Almost all of the social housing schemes cater for people in desperation, what about something for people in the 20-40k income bracket who have been completely priced out of ownership for years and are probably stuck in high-cost renting.

Idbatterim

could the councils not let out these affordable housing units, if they are not selling? Currently in my area, Dundrum / Sandyford, the cost to rent a 1 bed unit, is DOUBLE the cost to buy if the unit is being sold under the affordable housing scheme. Young people are being bled dry to pay rent, which means saving of any amount is a long winded if nigh on impossible task. I think the movement of wealth from the young breadline to the middle aged wealthy is a disgrace!