Property Market 2018

beauf

Probably a good time to liquidate before a crash. If that's what we think is coming.

JDD

It's got to be a multi-layered solution right?

1. We, and by that I mean the government, must build a certain amount of social housing. Not at the level of the 1950's and 1960's, but enough that it's providing permanent accommodation to families who have been stuck in the hostel/hotel emergency accommodation system for over a year, and perhaps a little more to cover those who are living with relations or friends for more than two years. Unfortunately, this housing can't be built in Louth or Leitrim. It needs to be built close to areas where there is employment, otherwise everyone getting allocated social accommodation is going to be long term unemployed. That's no good for the families or the rural area they've been allocated. Secondly, they have to be built somewhere close to childcare. Most people in social housing can't afford private childcare, and there is not enough publically funded childcare (either places in urban centres, or facilities at all in rural areas) that would allow someone to take up employment, even if they secured something. So until such a point as universal public childcare is available (and this may never happen), families in social housing will have to rely on relatives. So when people say "oh X person turned down a house in Waterford because they wanted to be close to Mammy in Tallaght" it's not just a sense of entitlement - it's an economic necessity, for families anyway.

2. Get rid of the first time buyer grant for new houses. It's just a builder's subsidy. It doesn't reduce the cost of a house for first time buyer, it increases the cost of a house by the amount of a subsidy, and has a knock on effect on the value of second hand houses in the area, thus increasing the price for second time buyers and disincentivising them from selling their first house.

3. More active use of the CPO for vacant land. Yes, it will inhibit the free market for property. Yes, it will disincentivise investors from investing in property. Is that a bad thing? No. When buyers outstrip supplies, then anything that reduces the buyers is a good thing. Investors will choose other things to put their money into. Fine Gael won't do this as they are right wing, and in favour of the free market. The problem is, while the market adjusts (supply comes online) we have a crisis. They're just trying to ride the crisis out without intervening, and to be honest I find that reprehensible.

4. Have a really forensic look at why building costs are so high, without the first reaction being "lower building standards!". Are wages high? Can we get in cheaper labour? Are insurance costs artificially high? Can we find a way to reduce that e.g. through a government insurance scheme (though if we were to do that, you'd want to come down the heavy on any builder that breaches building standards - it should become an individual personal liability, like a doctor or teacher). Anything that reduces building costs *should* decrease the price of property, though again the government would have to make sure, in some way, that these savings are being passed on to the customer.

5. I can't think of anything else. Though I would assume brighter minds than mine have suggested all of the above and other things on this thread. And I would presume all of those options have been discussed within government departments. I just fail to understand why nothing substantial has been done.

TSQ

JDD wrote: »

It's got to be a multi-layered solution right?


4. Have a really forensic look at why building costs are so high, without the first reaction being "lower building standards!". Are wages high? Can we get in cheaper labour? Are insurance costs artificially high? Can we find a way to reduce that e.g. through a government insurance scheme (though if we were to do that, you'd want to come down the heavy on any builder that breaches building standards - it should become an individual personal liability, like a doctor or teacher). Anything that reduces building costs *should* decrease the price of property, though again the government would have to make sure, in some way, that these savings are being passed on to the customer.

I am an addict of those tv programmes like Under the Hammer, where investors (usually) buy a property and renovate to rent or sell. Having renovated a house in Dublin a couple of years ago, I am constantly amazed at the amount that can be achieved in the UK on a small budget. Some properties I have seen renovated with new kitchen, bathroom, flooring and repainting for not much more than it costs here to install a family bathroom. VAT is not the culprit, or accounts for very little of the difference, as it is only 13.5% on most minor building work.

bri007

My favorite program.

Yeah it totally amazes me aswel, we are in the process of trying to buy a house, an old one that’s needs a lot of work, we have got quotes for kitchens, bathrooms etc.

The I see homes under the hammer and people buying old houses and doing them up from top to bottom for less than the price I got for a bathroom here!

I know some do a lot of the work themselves over there on the program but a lot pay trades people to do it and is still a bargain of a price. Amazed me!

TSQ wrote: »

I am an addict of those tv programmes like Under the Hammer, where investors (usually) buy a property and renovate to rent or sell. Having renovated a house in Dublin a couple of years ago, I am constantly amazed at the amount that can be achieved in the UK on a small budget. Some properties I have seen renovated with new kitchen, bathroom, flooring and repainting for not much more than it costs here to install a family bathroom. VAT is not the culprit, or accounts for very little of the difference, as it is only 13.5% on most minor building work.

Shedite27

JDD wrote: »

3. More active use of the CPO for vacant land. Yes, it will inhibit the free market for property. Yes, it will disincentivise investors from investing in property. Is that a bad thing? No. When buyers outstrip supplies, then anything that reduces the buyers is a good thing. Investors will choose other things to put their money into. Fine Gael won't do this as they are right wing, and in favour of the free market. The problem is, while the market adjusts (supply comes online) we have a crisis. They're just trying to ride the crisis out without intervening, and to be honest I find that reprehensible.

What would ya do with the land? Hand it over to developers? Government to build on it?

Andycap8

JDD wrote: »

It's got to be a multi-layered solution right?

4. Have a really forensic look at why building costs are so high, without the first reaction being "lower building standards!". Are wages high? Can we get in cheaper labour? Are insurance costs artificially high? Can we find a way to reduce that e.g. through a government insurance scheme (though if we were to do that, you'd want to come down the heavy on any builder that breaches building standards - it should become an individual personal liability, like a doctor or teacher). Anything that reduces building costs *should* decrease the price of property, though again the government would have to make sure, in some way, that these savings are being passed on to the customer.

There are 3 major components to house prices which could be addressed without the need to change building regs (although building regs should be changed too).

- Land. Until 2019 this was completely untaxed. It is a huge cost factor in housing. Who made a fortune in the last boom/celtic tiger - those selling agri land in and around the M50. Cairn Homes paid €107mm for the RTE site which worked out at €210k per unit before a shovel is even in the ground. Obviously RTE is an exception but it is a huge price. Glenveigh Properties average site cost was about €60k when it IPOed. While they have some nice locations, most of the units are going up in the likes of Navan, Ballbrigan, Clonee, Greystones and most of these were bought at the height of the crisis so dirt cheap. And while there will be a tax in 2019, it'll only be on vacant sites and not underutilized sites.

- Materials. Hines have stated that supply cost are way too high in Ireland due to a lack of competition - The Times Ireland article on it references cartel type behavior. You can check this yourself - look at boilers or fixtures and fittings available in Ireland and then compare those prices with similar stuff available in the UK or mainland Europe. And it's not only the prices that are different, the quality & range of options available elsewhere is much larger.

- Government taxes. You can see this in proposed Part V compliance letters submitted with planning permissions. For example, the Chesterfield Cross Avenue application by Cairn homes provides a breakdown of the Part V cost per unit for 22 Part V units - the average unit price (at a reduced rate) to the Local Authority is €500k however, of this, €93k relates to construction levies and VAT. There should be no VAT on property and there should be no construction levies - construction levies should fall by the wayside now that property tax has been introduced (having said that, the property tax needs to increase and be kept locally).

However, doing the above wouldn't necessarily reduce the cost to the purchaser. Mirroring your point about the Help to Buy, developers would try and keep most of the savings. And they'd be able to as there's so few large developers in Dublin (Cairn even admitted this in its latest investor presentation). The only way to counteract this is for the state to step in (as is normally needed when there's market failure) and compete with the two leaders. They could do it through Nama or establish some new entity to compete in the private market.


https://www.thetimes.co.uk/article/us-builder-hits-out-at-irish-suppliers-tj6vp0b5p

mkdon

great suggestions but why bother nothing will change..... there should be revolt on the streets we have become a soft nation

helimachoptor

bri007 wrote: »

My favorite program.

Yeah it totally amazes me aswel, we are in the process of trying to buy a house, an old one that’s needs a lot of work, we have got quotes for kitchens, bathrooms etc.

The I see homes under the hammer and people buying old houses and doing them up from top to bottom for less than the price I got for a bathroom here!

I know some do a lot of the work themselves over there on the program but a lot pay trades people to do it and is still a bargain of a price. Amazed me!

We bought a 1950s semi D, converted the garage, insulated it, new doors + windows, new plumbing throughout bathrooms, poured floor (brother of builder!) , new kitchen etc.
Wifes cousin is a builder so he did a lot of the work and got his people to come in and do (a very good job) at very reasonable rates. They did weekends/evenings.

Cost about €60K, only thing we couldnt source ourselves was a sparks, have a friend who is one but he was working in Denmark at the time. But we didnt need a lot done.

There's a few houses on our road that have come up for sale in the condition we bought ours, builder estimates ours would have cost circa €100-120K full price to do at the time. But he believes that trying to get someone to do it now could be up to €200K, prices are nuts.

TSQ

Andycap8 wrote: »

The only way to counteract this is for the state to step in (as is normally needed when there's market failure) and compete with the two leaders. They could do it through Nama or establish some new entity to compete in the private market.


https://www.thetimes.co.uk/article/us-builder-hits-out-at-irish-suppliers-tj6vp0b5p

Well, when you see that local authorities consistently pay over the odds when buying houses in bulk from developers, while commercial investors buy at a discount, who would trust any state agency to get value for money and/or keep prices down and thus compete with the private sector. The only agencies that seem able to build affordable homes at a reasonable cost are some housing associations - admittedly when given land either free or at greatly reduced prices by local authorities. Given the track record of housing associations v. government or local authorities, this reasonably could be considered the best way forward.

Pussyhands

Always interesting to look into the past.

https://web.archive.org/web/20070701143548/http://www.rte.ie:80/business/2007/0629/houses.html

Even this link, the "related stories" is very interesting:

https://web.archive.org/web/20070703213841/http://www.rte.ie:80/business/2007/0430/houses.html

Lots of warning signs, predicitions of house prices collapsing by 60% even though economic results were positive.

mkdon

Pussyhands wrote: »

Always interesting to look into the past.

https://web.archive.org/web/20070701143548/http://www.rte.ie:80/business/2007/0629/houses.html

Even this link, the "related stories" is very interesting:

https://web.archive.org/web/20070703213841/http://www.rte.ie:80/business/2007/0430/houses.html

Lots of warning signs, predicitions of house prices collapsing by 60% even though economic results were positive.

completely different this time

don't see any warnings this time too....do u?

Pussyhands

mkdon wrote: »

completely different this time

don't see any warnings this time too....do u?

https://www.independent.ie/life/home-garden/will-irish-house-prices-fall-36971734.html

mariaalice

Pussyhands wrote: »

https://www.independent.ie/life/home-garden/will-irish-house-prices-fall-36971734.html

A correction is bound to happen sometime, now a correction is no a crash. we did very well during the downturn with a property, but it was luck and we had the money, people always remember those who got a bargain but forget the rest and somehow think they will be the ones getting the bargain.

riclad

We had a correction in 2007, prices fell by 50-60 per cent.
Go to a bank now, they,ll lend you maybe 3 to 3.5 times your salary ,
if you have a large deposit saved .
So i see no sign that houses are overpriced .
So why do we need a correction.

UsBus

mkdon wrote: »

completely different this time

don't see any warnings this time too....do u?

Stock market is teetering as tech stocks are massively overpriced. Trade war could go any way. Brexit..... Tax take for Ireland made up almost entirely of a handful of multi national companies & a complete surprise to our government. Interest rates due to rise...

And that's just off the top of my head...but sure we love a good soft landing...

beauf

riclad wrote: »

...
So why do we need a correction.

Usually because someone wants to buy a house....

Topgear on Dave

UsBus wrote: »

Tax take for Ireland made up almost entirely of a handful of multi national companies

+100 on this, I was skimming through the economic commentary before the last budget and a couple of them were pointing out that the government has taken in large chunks of cash (billions!) from a very very small number of companies.

Hugely risky!

joombo

That's why I want to build my own house. I bought a section in outer Auckland last year and chose one of the well known design & build companies here to do the build. They made a meticulous spreadsheet to outline the budget and included estimates for drapes, basic landscaping, fencing, patio/footpaths, carpets, heating (heat pump & gas fire) and extras(variations). The whole build (not counting the dirt, obv.) came in within budget at pretty much $450k. Some of these outfits are taking on more work than they can cope with. Hope the build will be finished exactly when promised.

Shedite27

Topgear on Dave wrote: »

+100 on this, I was skimming through the economic commentary before the last budget and a couple of them were pointing out that the government has taken in large chunks of cash (billions!) from a very very small number of companies.

Hugely risky!

How's it risky? It's money the government is entitled to (argubly entitled to far more). It's only risky if the money dissappears surely. Which seeing as we're now the only English speaking country in the EU seems less likely than ever

Topgear on Dave

Shedite27 wrote: »

How's it risky? It's money the government is entitled to (argubly entitled to far more). It's only risky if the money dissappears surely. Which seeing as we're now the only English speaking country in the EU seems less likely than ever

Iv worked for a few multinationals both here and abroad and have two points.

The high tech sector expands and contracts fast, they are foreign companies and do you really think they believe that the government is entitled to it. They will leave overnight if they want, relying on a small number of these companies to bailout the health service every year is dangerous.

I find the whole thing of us being the only english speaking country in the EU vastly overblown. I regularly work with Dutch and German colleagues in English. I would not rely on that AT ALL.

kippy

Topgear on Dave wrote: »

Iv worked for a few multinationals both here and abroad and have two points.

The high tech sector expands and contracts fast, they are foreign companies and do you really think they believe that the government is entitled to it. They will leave overnight if they want, relying on a small number of these companies to bailout the health service every year is dangerous.

I find the whole thing of us being the only english speaking country in the EU vastly overblown. I regularly work with Dutch and German colleagues in English. I would not rely on that AT ALL.

Indeed, a lot of the Dutch have more good English than us.

mariaalice

Topgear on Dave wrote: »

Iv worked for a few multinationals both here and abroad and have two points.

The high tech sector expands and contracts fast, they are foreign companies and do you really think they believe that the government is entitled to it. They will leave overnight if they want, relying on a small number of these companies to bailout the health service every year is dangerous.

I find the whole thing of us being the only english speaking country in the EU vastly overblown. I regularly work with Dutch and German colleagues in English. I would not rely on that AT ALL.

Speaking excellent English does make somewhere an English speaking country it's about English as a first language.

Shedite27

Topgear on Dave wrote: »

Iv worked for a few multinationals both here and abroad and have two points.

The high tech sector expands and contracts fast, they are foreign companies and do you really think they believe that the government is entitled to it. They will leave overnight if they want, relying on a small number of these companies to bailout the health service every year is dangerous.

I find the whole thing of us being the only english speaking country in the EU vastly overblown. I regularly work with Dutch and German colleagues in English. I would not rely on that AT ALL.

Wait, when you said the government took billions from companies, you're talking about corporation tax yeah? What does it matter about what they believe, it's the law.

Each to their own, I think the English speaking thing is very highly regarded.

Cyrus

kippy wrote: »

Indeed, a lot of the Dutch have more good English than us.

More good than yours anyway

matsy1

House prices really haven't gone up that much. I bought a house in 2014 for €250k in Dublin, in 4 year's it has maybe gone up €50k. A jump but nothing out of control. I do think that if interest rates go up, a lot of people will try downgrade from their 400k homes, those who can barely afford as it is.

adriaaaan

matsy1 wrote: »

House prices really haven't gone up that much. I bought a house in 2014 for €250k in Dublin, in 4 year's it has maybe gone up €50k. A jump but nothing out of control. I do think that if interest rates go up, a lot of people will try downgrade from their 400k homes, those who can barely afford as it is.

Interest rates won't be risng any time soon with the sluggishness of Eurozone growth

sunnyday1234

Nor will any large amount of multinationals pull out of Ireland. We are a superb country to do business in, people love moving to and living here and the top brass from the states love to visit. Yes they might move manufacturing and contract from time to time but its highly unlikely they would actually close up shop
Look at Dell - they let go 2000 in limerick years ago from manufacturing but now they have over 5000 staff in ireland

adriaaaan

sunnyday1234 wrote: »

Nor will any large amount of multinationals pull out of Ireland. We are a superb country to do business in, people love moving to and living here and the top brass from the states love to visit. Yes they might move manufacturing and contract from time to time but its highly unlikely they would actually close up shop
Look at Dell - they let go 2000 in limerick years ago from manufacturing but now they have over 5000 staff in ireland

You are correct and it's very well put. The last crash was the result of a credit fuelled housing bubble. Not multinationals pulling out. Intel are constructing a multi billion dollar facility in leixlip as we speak. Facebook are taking over Soco Dublin. A no deal Brexit will cause a mass exodus from Britain and NI unseen since the famine Not saying these are good things, but wish casting the economy to crash so you can buy a cheaper house is waste of time and mental energy.

zl1whqvjs75cdy

matsy1 wrote: »

House prices really haven't gone up that much. I bought a house in 2014 for €250k in Dublin, in 4 year's it has maybe gone up €50k. A jump but nothing out of control. I do think that if interest rates go up, a lot of people will try downgrade from their 400k homes, those who can barely afford as it is.

That's a 20 percent growth, or 5 percent a year. That's probably on the higher side of what would be normal but in my opinion the market will settle to a steady 3% growth year on year, with more expensive areas slowing a bit. This will radiate out from D4 etc as people are pushed further out.

Moonjet

adriaaaan wrote: »

You are correct and it's very well put. The last crash was the result of a credit fuelled housing bubble. Not multinationals pulling out. Intel are constructing a multi billion dollar facility in leixlip as we speak. Facebook are taking over Soco Dublin. A no deal Brexit will cause a mass exodus from Britain and NI unseen since the famine Not saying these are good things, but wish casting the economy to crash so you can buy a cheaper house is waste of time and mental energy.

Agreed.
When I started college 20 years ago people were scaremongering about all the US multinationals about to leave Ireland, and the industry I was working in had no future, bla bla bla. It never happens. You just have to drown out the negativity, some Irish people just can't see anything positive about their country as a place to live and work. It's usually those who have never traveled.