Would you be in favour of compulsory purchase orders for housing?

Joe222

When you look at the crazy prices of houses again today it seems another generation are going to be strangled by huge personal debts.

It seems to be deliberate policy to reinflate house prices in order to sort out the banks first and foremost.

I guess if we had control of our own currency money could have been printed to write off some of the household debt. But as Europe controls our currency that is not an option into the future.

Would you be in favour of cpos (compulsory purchase orders) being used for the government to acquire land, lay a blueprint for development and then private developers could buy so many blocks to build houses on it.

We use cpos for key infrastructure like roads and rail. So why not for housing?

Do you think it could keep house prices in check to some extent or would we be better off with the status quo.

the_pen_turner

Firstly. House prices are lower than the cost of building them so they have to rise.
Secondly we have enough houses in this country. We have too many derelict, abandons or just not loved in houses. The amount of flats and apartments that could be used for housing is crazy.
The idea that you can build new houses to solve this problem is fanciful and one reason we are in this mess

Diarmuid

the_pen_turner wrote: »

Firstly. House prices are lower than the cost of building them so they have to rise.

The obvious solution to this is bring down the cost of building.

athtrasna

Diarmuid wrote: »

The obvious solution to this is bring down the cost of building.

How do you propose to do that?

Wanderer78

The first thing to do is to ditch this notion, 'the market knows best', the market isn't connected to reality at the best of times, never has, never will. New houses are badly needed, this was spotted almost 10 years ago by some. Many houses that do exist are basically in the wrong places, pushing up the price of housing is just magnifying the problem. The idea of increasing inflation to grow your way out of a recession is madness, central banks should burn their dsge models as they are simply rubbish

Wildly Boaring

the_pen_turner wrote: »

Firstly. House prices are lower than the cost of building them so they have to rise.

This is do not believe. No developer/contractor is a charity. If this were true none of them would be building at all right now.

hidinginthebush

the_pen_turner wrote: »

....Secondly we have enough houses in this country. We have too many derelict, abandons or just not loved in houses. The amount of flats and apartments that could be used for housing is crazy.
The idea that you can build new houses to solve this problem is fanciful and one reason we are in this mess

If we did indeed have enough houses you wouldn't have people queueing in their dozens anytime a new development pops up
and have these places sell out on plans alone. These derelict or not loved houses might be second homes down the country in the back end of nowhere, not much use to someone with 3 kids working in Dublin now, is it?
If you built more houses, the supply would increase, hence the agressive bidding would ease in turn.

Tigerandahalf

I would imagine the government tax take on a house must be very high between all the taxes that are grabbed along the way from buying the land, building houses on it and then the homeowner paying for the property.

Selling lots of overinflated priced houses is good business for the exchequer until it blows up in their face.

I see Europe lately looking for the property tax to be increased. I don't think this is as good a model as they think as if a person loses their job or is taxed to oblivion they will simply stop paying the property tax. Even if a repayment order is placed on the house many won't care as they will be living in the house until death.

The problem with housing is that it is seen as an investment for the get richer class. Until that chain is broken we will have these crises time and again.

One hope is the spread of good broadband to rural areas. If broadband was rolled out like the esb in the 50s/60s people could set up businesses and work from home a lot more and suck people out from the main city centres.

knipex

Wanderer78 wrote: »

. New houses are badly needed, this was spotted almost 10 years ago by some.

I call bullsh1t.

10 years ago they were building 90,000 ish houses a year.


.

Wanderer78 wrote: »

The idea of increasing inflation to grow your way out of a recession is madness, central banks should burn their dsge models as they are simply rubbish

What inflation ???

None of your points address the question re how to address the actual building costs of houses..

Flatzie_poo

Joe222 wrote: »

It seems to be deliberate policy to reinflate house prices in order to sort out the banks first and foremost.

What's your source on this? It's a capital market and it's acting like it should at the minute. The only way to fix it is to increase supply. That's it.

Joe222 wrote: »

I guess if we had control of our own currency money could have been printed to write off some of the household debt. But as Europe controls our currency that is not an option into the future. .

This doesn't fix the problem - it would just create hyper-inflation. And that's a whole other world of pain.

knipex

scanlone wrote: »

This is do not believe. No developer/contractor is a charity. If this were true none of them would be building at all right now.

And there in lies the problem.. They aren't.

Wildly Boaring

They are buliding and they will be.

Building is not a case of flicking a switch.

Most decent developments would want 6 to 12 months design and procurement prior to construction starting.

Building was not profitable 12 months or so ago but is now. Look at the amount that has kicked off in the last couple months in the suburbs.

Labour shortage is creeping into the industry now and this will drive wages up (they are still too low for many management roles). Materials will also go up. Some were artifically low since 2009, 2010. This will all put up prices but in the 3 to 5% region.

IN the mean time CIF and developers will continue to pedal the line that there's no profit

Wanderer78

knipex wrote:

10 years ago they were building 90,000 ish houses a year.

Be aware, I said 'almost' 10 years ago, people like Tom Lyons spotted the housing shortage in 2009 and was highly ridiculed for writing about it as we all know the headlines were all 'ghost estates' at that time, this was spotted, and nothing was done about it, and still, little or nothing is being done.

Interest rates are being deliberately kept low to try stimulate economies, it's failing in large parts of Europe, rates will eventually start rising, further compounding our housing problems. The government needs to get involved in the house building industry and fast

Joe222

Flatzie_poo wrote: »

What's your source on this? It's a capital market and it's acting like it should at the minute. The only way to fix it is to increase supply.

I have no source just like you have no source to disprove it.

The banks are recognised as a necessary evil in order for businessess and people to get loans to keep the economy going. But their balance sheets need property and land prices to reinflate for them to be in order. Only other alternative is to write off the debt and have the ECB give them credit on the balance sheet which they are not willing to do.

We are still dealing with overhanging debt. Wages are still pretty stagnant plus demands on the wage is increasing with property taxes, compulsory health insurance and possible pension contributions on the way. The latter 2 promise no guaranteed return, just ensuring that the older generation are looked after.

Flatzie_poo

Joe222 wrote: »

I have no source just like you have no source to disprove it.

That's absolutely ridiculous. You made the accusation - you have to prove it.

CruelCoin

scanlone wrote: »

This is do not believe. No developer/contractor is a charity. If this were true none of them would be building at all right now.

Entirely depends on location.

4-bed where i live is 160k. Nothing being built as a developer cannot turn a profit at that rate.

Town 20 minutes up the road, 4-beds new built going for 350k....Good margin there.

CruelCoin

Diarmuid wrote: »

The obvious solution to this is bring down the cost of building.

The only way you could do that (without subsidising building materials) would be to cut the burden of red tape, fees, etc.

Were you to cut the quality restrictions and let people slap up some **** houses to get over this shortage blip, then it would be possible, but that will never happen.

knipex

Joe222 wrote: »

I have no source just like you have no source to disprove it.

Errr.. that not how it works..

If you make a claim then it up to you to prove \ defend it.

Manion

CruelCoin wrote: »

The only way you could do that (without subsidising building materials) would be to cut the burden of red tape, fees, etc.

Were you to cut the quality restrictions and let people slap up some **** houses to get over this shortage blip, then it would be possible, but that will never happen.

Is this true? Is it not the case that for a lot of these developments the land was bought at boom time prices? There was no right down on this and the developers need 2008 level prices to make a return. I recall seeming a break down for my own development, and the price per plot was approximately 150K including payouts to the county council.

More regulation has meant the cost of professional fees have gone up.

CruelCoin

Joe222 wrote: »

We use cpos for key infrastructure like roads and rail. So why not for housing?

As is true with every....single......thing the state has a role in, it will be of inferior quality, behind schedule and vastly more expensive than anything the private sector could do.

Diarmuid

athtrasna wrote: »

How do you propose to do that?

You (govt) look at the input costs and cut the direct and indirect costs they control
- drive down site costs by penalising unused / derelict sites
- reduce planning regulations (dual aspect, height limits)
- financing costs driven down by state owned banks (yuck)
- reduce VAT + taxes

About 45% of build costs are material and labour. Plenty room for squeezing the costs

The fact that we made a balls of planning previously doesn't mean we should swing completely to the opposite extreme.

CruelCoin

Manion wrote: »

Is this true? Is it not the case that for a lot of these developments the land was bought at boom time prices? There was no right down on this and the developers need 2008 level prices to make a return. I recall seeming a break down for my own development, and the price per plot was approximately 150K including payouts to the county council.

More regulation has meant the cost of professional fees have gone up.

True. Red tape in all forms needs to be cut.

I'm not sure how the state could solve the issue with land valuation.
If the state stepped in and gave subsidies to free these developers up to build then would this not create all sort of circular land sales cartels amongst the developers?

Manion

Diarmuid hinted at a course of action. Penalise derelict and otherwise undeveloped land.we have a problem of land banks in this country. My house is in a new development, the land was ideal since 2008.