An interesting piece from the head of Housing Agency in the Indo

AngryLips

http://www.independent.ie/opinion/housing-is-about-to-change-radically-and-heres-why-30567503.html

I think this article says a lot about the future of development and spatial strategy in Ireland. Much of it makes sense to me in a very 'stating the obvious' kind of way. But one stand-out point that struck me is the following comment which, I can only assume, is reference to regulations requiring apartments to provide for x-amount of outdoor space per sq/m and x-storage space etc that was introduced at the tail-end of the Celtic Tiger years:

we need to examine how well-intentioned, but unsustainable regulations and aspirations for parking, lifts, stairs and space standards are forcing up house prices.

Surely, he can't be advocating reversing the very regulations brought in to avoid much of the badly built apartments that litter Dublin's quays and other parts of our cities from the early years of the boom?

Pete_Cavan

Not really sure what he means by lifts and stairs as these are mainly governed by Fire Safety and Disability Access Certificates and I cant see any steps backwards being taken here. In fact any easing of the regulations here would be met the cries about giving developers free reign to build death traps. I would be interested to hear an example of a lesson learnt and what has been done to prevent the problem from happening again in the future. We missed a big opportunity when introducing the property tax. The only big change we have seen is the introduction of BCAR but I would see this as one of the “well-intentioned, but unsustainable regulations” he refers to because it does little to tackle the problem and only serves to increase costs.

He is right in that we will see more professional landlords, probably in the form of the developer who built the houses/apartments renting them out to recoup the development costs over the long term. This will almost certainly be the case with apartments as I don’t think there is much appetite among people to take on a mortgage to buy apartments and buy-to-let investors wont be looking at them as they did in the past. The arrival of large US financiers and REITs should see more developer landlords and this is the new finance model referred to. Hopefully these developers are more in tune and we will see a better quality of apartment being built which is suitable for long term living and raising a family.

Unfortunately he doesn’t mention one of the biggest problems we have in providing house, the focus is still on expanding car dependent suburbs. The part of the article which caught my eye is “They need to avoid believing that the problems lie with planning or 'sites'”. I would have said the opposite, we should be prioritising urban locations, preferably close to public transport, for development and avoiding further sprawl on green field site. Developers love large green field sites because they are easier to develop, can be developed in phases which helps with cashflow, there are economies of scale associated with building a large number of the exact same house and don’t have the access issues and confined spaces of city centre sites. Unless something is done to prioritise development in urban areas, developers will continue to look at every field as a potential housing estate. I think he is exaggerating when he says “Housing in Ireland is about to change dramatically”, for that we need proper green belt style planning and a land value property tax.

He seems to think that problems have been solved and that the rule that what goes up must come down no longer applies to property prices and it is disappointing to see him playing up a fear of negative equity. The statement “burdened by that fatal trap of negative equity” to me suggests that lessons have not been learned – first of all, negative equity is not a trap, it is usually a short term thing and is part of the economic cycle, it is inevitable for many home owners, secondly, it is only a burden to those who are actively looking to sell, for those who bought as part of a long term investment, a period of negative equity is far from fatal and may not even be noticed. Also, the idea that continuing initiatives by the Government “will eventually lift all but the most imprudent out of negative equity traps” is ridiculous and to me suggests that nothing has been learned.

Victor

Prices are likely to rise from now to November. From November to February, prices will quite possible drop several percent as the CGT tax break expires.

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_gains_tax.html