Property Market 2020

dubrov

Wildly Boaring wrote: »

CAN also be dearer as contractors must "price the risk"

Surely it is always dearer. Why would a private company take on risk for free?

woejus

awec wrote: »

Nobody would ever agree to this.

Certainly worked well for BAM in the NCH! Megaprojects run overbudget all the time. This is why politicians are typically averse to them; a massive unknown risk combined with a long time line.

If it messes up and goes over budget, it's your fault. If it goes well, some other clown is in power and cuts the ribbon by the time it's finished.

That's not to say it shouldn't be outside the ability of an Irish govt to start on a campaign of building the infrastructure for gaffs, services & roads etc. Let the private sector then construct the houses.

OwlsZat

dubrov wrote: »

Surely it is always dearer. Why would a private company take on risk for free?

They price in the risk and tender with a higher degree of accuracy given the fact they can be burned. Amazingly they are also much better at finding solutions to problems encountered duing the build too.

The current system isn't fit for purpose. Put the contract out to tender. Always take the cheapest bidder. Get fleeced for overruns because the price was never achievable.

Wildly Boaring

dubrov wrote: »

Surely it is always dearer. Why would a private company take on risk for free?

Dearer initial figure.
Not necessarily dearer final figure

Wildly Boaring

OwlsZat wrote: »

They price in the risk and tender with a higher degree of accuracy given the fact they can be burned. Amazingly they are also much better at finding solutions to problems encountered duing the build too.

The current system isn't fit for purpose. Put the contract out to tender. Always take the cheapest bidder. Get fleeced for overruns because the price was never achievable.

A lot of jobs in this country are fixed price lump sum
Off the top of my head some of the large scale sewer jobs like Cork Lower Harbour.
Plenty of the road jobs actually come in on price.

But the Children's Hospital was the complete opposite. They hadn't even specced the internals when tendering. Political sham. Get moving whatever way possible and suffer the consequences.

PommieBast

OwlsZat wrote: »

The current system isn't fit for purpose. Put the contract out to tender. Always take the cheapest bidder. Get fleeced for overruns because the price was never achievable.

One of the reasons Carillion went under was because its business model was to actually bid below-cost and then make it up on "contract variations".

Cuddlesworth

awec wrote: »

Big difference doing business with a private business and doing business with the public sector.

I worked on the last few major projects in Clondalkin and Ballymun two decades ago. I doubt any Irish builder familiar with how the councils operate would ever agree to fixed costs contracts.

Wildly Boaring

Cuddlesworth wrote: »

I worked on the last few major projects in Clondalkin and Ballymun two decades ago. I doubt any Irish builder familiar with how the councils operate would ever agree to fixed costs contracts.

I can guarantee you they'll line up to price it.

Fixed price lump sum is just that BUT if the client holds you up or changes scope or doesn't fulfill any of their obligations BANG!! Claim central.

Contractors really don't mind it especially if based off a strong existing and well proven contract. Say FIDIC or NEC3.

OwlsZat

Have friends in the civil engineering space. The entire eTenders process isn't fit for purpose and contributes significantly to the continuous Government infrastructure shortcomings. In the current state quotes are almost meaningless people fully aware they can just add on almost anything they like later.

One of the anecdotal stories I heard about the National Children's Hospital is that the site is so small there is no place for the continuous stream of lorries that are part of such an excavation and build. As a result a staging area had to be created where all lorries delivering or collecting must go and take a ticket and wait before being marshaled to the site. This process adds extra hours to every single delivery to or from the site adding huge costs along the way.

Fixed price contracts forces the contractors to actually walk the job, clearly the risk is on the person quoting don't quote what you don't understand. The people who do will do so accurately and go on to finish jobs on time and on budget should be preferred for future contracts. This is exceptionally simple stuff. How did we get it so wrong? It's no wonder many have suggested we setup a department of capital expenditure so we can learn the skills required, quite clearly we are well short.

OwlsZat

Cuddlesworth wrote: »

I doubt any Irish builder familiar with how the councils operate would ever agree to fixed costs contracts.

For those of us who do not know how the councils operate please share.

19233974

OwlsZat wrote: »

Have friends in the civil engineering space. The entire eTenders process isn't fit for purpose and contributes significantly to the continuous Government infrastructure shortcomings. In the current state quotes are almost meaningless people fully aware they can just add on almost anything they like later.

One of the anecdotal stories I heard about the National Children's Hospital is that the site is so small there is no place for the continuous stream of lorries that are part of such an excavation and build. As a result a staging area had to be created where all lorries delivering or collecting must go and take a ticket and wait before being marshaled to the site. This process adds extra hours to every single delivery to or from the site adding huge costs along the way.

Fixed price contracts forces the contractors to actually walk the job, clearly the risk is on the person quoting don't quote what you don't understand. The people who do will do so accurately and go on to finish jobs on time and on budget should be preferred for future contracts. This is exceptionally simple stuff. How did we get it so wrong? It's no wonder many have suggested we setup a department of capital expenditure so we can learn the skills required, quite clearly we are well short.

they didnt even have the bloody thing designed or spec`d before they tendered and awarded the project. The original figure was always going to be grossly wrong.

theres no one correct type of contract, its picking the correct one depending on the project

Cuddlesworth

OwlsZat wrote: »

For those of us who do not know how the councils operate care please share.

Right, lets take a more recent example.

Apartment block is built to legal building spec's today.
Tenant requests rent supplement.
Council sends inspector.
Council Inspector creates report saying not to their made up spec.
Cuts rent supplement, demands expensive and unnecessary repairs.
No mechanism to question any part of that process.

Some examples from 20 years ago, this is the stuff I knew about. These are not even from the same council.

Council demands entire staging area is moved, so playground is completed, so counselor can take photo op. The playground itself was destroyed about a week after it opened, didn't see a photo op for that bit.
Council demands builders repair road, because council tenant on road removed cobblelock paving and put into his garden. We watched him do it.
Council demanded the following snag items get fixed, paint wrong color(tenant painted house after moving in), replace kitchen units and doors(tenants children used them as swings), fix flood damage to flooring(tenant overflowed bath while presumably off their tits on heroin).
During building process, design flaws in balconies(combination of door choice and design), duplex entrance design(design demanded step down into 1st floor apartment). Both caused serious water ingress on completion, council demanded regressive works, refused to pay for it.
Went hard about the housing project being behind, contractual late fees etc, ignoring the fact that it was behind because the traveller family that lived on part of the land was still there and they hadn't bothered to evict them.
A bridge was 5 feet offset from the designs. Made no impact, to the farmer, to the road, to the project. Many meetings with shouting, threat, pure time wasting etc. Mistakes happen, turned out to be the councils mistake too.
Council were required to complete the last 5 feet of the sewer main(on council owned road). Took them 6 months. In the meantime, entire estate which had opened in the meantime had to be pumped into trunks because the **** was going nowhere.

The usual response was to refuse payment until issues were fixed by the builder. And since most projects were phased, that put huge financial strain on the builder. Concepts like compromise and reason were alien. Nobody would make a decision, everything was the builders fault. Looking back, I think a few of them were expecting envelopes to make the issues go away.

Reversal

https://amp.independent.ie/business/irish/sinn-fein-surge-wipes-700m-off-aib-and-boi-38945672.html?

Uh oh.

The_Conductor

Reversal wrote: »

https://amp.independent.ie/business/irish/sinn-fein-surge-wipes-700m-off-aib-and-boi-38945672.html?

Uh oh.

No great surprise there.
Sinn Féin have not hidden their intention to tax banks, to remove 'super profits' from the construction sector- and as for landlords- the search is for an approach that is not odious to the constitutional right to own property.

Lets call a spade a spade- Eoin O'Broin is going to get the Housing portfolio- that's a red line issue for Sinn Féin- they need to show they are delivering for those who want to buy a property or rent one at a reasonable price- they need to be seen to be dismantling the current system.

We need to educate ourselves into Eoin O'Broins train of thought- so we can better recognise what he is doing and how it may impact on the sector.

l5auim2pjnt8qx

The_Conductor wrote: »

No great surprise there.
Sinn Féin have not hidden their intention to tax banks, to remove 'super profits' from the construction sector- and as for landlords- the search is for an approach that is not odious to the constitutional right to own property.

Lets call a spade a spade- Eoin O'Broin is going to get the Housing portfolio- that's a red line issue for Sinn Féin- they need to show they are delivering for those who want to buy a property or rent one at a reasonable price- they need to be seen to be dismantling the current system.

We need to educate ourselves into Eoin O'Broins train of thought- so we can better recognise what he is doing and how it may impact on the sector.

Let's not get carried away,the construction sector has been broken for a very long time hence rental & property price crisis we see now,removing super profits can be only seen as a good thing ,don't you think they screwed us over enough shouldering the Nama debt on every Irish citizen in the country .

We need new developers not the old bad developers we saw staying in 5 star hotels on foreign luxury holidays back in the crash while there billions of debt sat comfortly in Nama while homehowners went though years of debt hardship while many didn't make it through due to emigration & suicide.

Scaremongering messages to Property owners that SF are going to take there house of them as ridiculous,People that purchase a home and maybe a 2nd for pension need not worry but individuals who purchased 20 + need to be on edge and for good reason mainly down to pure Greed.

The crisis has been going on for a long time this gives us time to remedy the mistakes of the past about Social experiments, from the late 90's council estates were left to Rack & Ruin....if built properly with proper infrastructure and skilled gardai presence, talking & actively taking part in the communities they serve we may have a different outcome.

JohnnyChimpo

The DOB media will write a few stories about €XXXm being "wiped out" from the bank ledgers, as if market cap=crystallised value. But then nothing will be written when the share value recovers over the next few weeks or months, market hysteria is only used to try and shift policy in one direction

garhjw

The_Conductor wrote: »

No great surprise there.
Sinn Féin have not hidden their intention to tax banks, to remove 'super profits' from the construction sector- and as for landlords- the search is for an approach that is not odious to the constitutional right to own property.

Lets call a spade a spade- Eoin O'Broin is going to get the Housing portfolio- that's a red line issue for Sinn Féin- they need to show they are delivering for those who want to buy a property or rent one at a reasonable price- they need to be seen to be dismantling the current system.

We need to educate ourselves into Eoin O'Broins train of thought- so we can better recognise what he is doing and how it may impact on the sector.

Firstly I would like Sinn Féin to explain how the unicorn housing policy will be funded and operationalised if they get Housing portfolio.
They have no experience, it is easy to write words in a book but putting it into action is an altogether different challenge. How many years will it take to get off the ground? Impact in the event of economic downturn?

garhjw

JohnnyChimpo wrote: »

The DOB media will write a few stories about €XXXm being "wiped out" from the bank ledgers, as if market cap=crystallised value. But then nothing will be written when the share value recovers over the next few weeks or months, market hysteria is only used to try and shift policy in one direction

Good point - on the radio this morning it was pointed out that banks have lost about 50% value in last 12-18 months. It is the additional uncertainty that doesn’t help matters especially when we have such a large holding in AIB.

Wildly Boaring

Memphis Happy Coyote wrote: »

Let's not get carried away,the construction sector has been broken for a very long time hence rental & property price crisis we see now,removing super profits can be only seen as a good thing ,don't you think they screwed us over enough shouldering the Nama debt on every Irish citizen in the country .

We need new developers not the old bad developers we saw staying in 5 star hotels on foreign luxury holidays back in the crash while there billions of debt sat comfortly in Nama while homehowners went though years of debt hardship while many didn't make it through due to emigration & suicide.

Scaremongering messages to Property owners that SF are going to take there house of them as ridiculous,People that purchase a home and maybe a 2nd for pension need not worry but individuals who purchased 20 + need to be on edge and for good reason mainly down to pure Greed.

The crisis has been going on for a long time this gives us time to remedy the mistakes of the past about Social experiments, from the late 90's council estates were left to Rack & Ruin....if built properly with proper infrastructure and skilled gardai presence, talking & actively taking part in the communities they serve we may have a different outcome.

I think you need to separate the "construction industry" from the developers.

Us in the construction industry had little or nothing to with the crash. And most had to emigrate during the recession. Back and hoping for steadiness in property and government capital spend.

OwlsZat

garhjw wrote: »

Firstly I would like Sinn Féin to explain how the unicorn housing policy will be funded and operationalised if they get Housing portfolio.
They have no experience, it is easy to write words in a book but putting it into action is an altogether different challenge. How many years will it take to get off the ground? Impact in the event of economic downturn?

I didn't vote Sinn Fein but its easy to see why many people did. Housing and health are unmitigated disasters. Some problems at a glance.

1. Land hoarding / cost of land
2. Derelict buildings
3. Lack or housing density in urban areas
4. Councils not building council houses
5. The cost of building materials
6. The overseas vulture fund landlords paying no tax
7. Awful implementation of property tax

There is a tone of problems which need solving and the sooner a new team attempts to start rectifying problems the better. Couldn't actually believe EM got reelected.

19233974

will we see people shift properties they have been sitting on until now i wonder!

garhjw

OwlsZat wrote: »

I didn't vote Sinn Fein but its easy to see why many people did. Housing and health are unmitigated disasters. Some problems at a glance.

1. Land hoarding / cost of land
2. Derelict buildings
3. Lack or housing density in urban areas
4. Councils not building council houses
5. The cost of building materials
6. The overseas vulture fund landlords paying no tax
7. Awful implementation of property tax

There is a tone of problems which need solving and the sooner a new team attempts to start rectifying problems the better. Couldn't actually believe EM got reelected.

I agree with your points along with planning processes having big impact on 1-3. The major problem above is number 4 - not the competence or expertise to do it themselves. Time and again using external consultants to advise on many projects has failed miserably.

fliball123

19233974 wrote: »

will we see people shift properties they have been sitting on until now i wonder!

Will we see people buying now that rents are out of control and the drops envisaged by some are not happening..

Wildly Boaring

OwlsZat wrote: »

I didn't vote Sinn Fein but its easy to see why many people did. Housing and health are unmitigated disasters. Some problems at a glance.

1. Land hoarding / cost of land
2. Derelict buildings
3. Lack or housing density in urban areas
4. Councils not building council houses
5. The cost of building materials
6. The overseas vulture fund landlords paying no tax
7. Awful implementation of property tax

There is a tone of problems which need solving and the sooner a new team attempts to start rectifying problems the better. Couldn't actually believe EM got reelected.

5 is not controlled by any government
Agreed on 1, 2 and 3
4. Yep they need to get on with it, via construction contractors though.
Agreed on 6
7? Awful as in you wanna pay none? Or awful as in disagree with rates?

Wompa1

19233974 wrote: »

will we see people shift properties they have been sitting on until now i wonder!

Would be interesting to know what situation most who own are in. I'd bet most haven't been making their full repayments for years. So did they get a lock in deal to pay it over a longer amount of time for lower payments? Are they in a spot now that the interest they owe is bananas.

I'd have thought those who bought with 100% mortgage and were under water on their mortgages would jump at the chance to sell them and eliminate or reduce what they owe unless they can't. Maybe it's not an option.

19233974

3 places i went to see in december were investor properties (small landlord) that they had decided to sell. As i assume they felt the market had peaked, maybe the change in goverment will nudge a few more...how many im not sure

OwlsZat

Wildly Boaring wrote: »

5 is not controlled by any government
Agreed on 1, 2 and 3
4. Yep they need to get on with it, via construction contractors though.
Agreed on 6
7? Awful as in you wanna pay none? Or awful as in disagree with rates?

5. Government can bring through legislation making objections more difficult. Which I feel they should. They could also sit down and agree some guidelines with An Bord Pleanála. Some of the sustained NIMBY objections are scandalous. Often backed by Government ministers!!

7. The rates are too low. The rates should act as a deterrent to having derelict properties. At the moment they don't.

Wildly Boaring

OwlsZat wrote: »

5. Government can bring through legislation making objections more difficult. Which I feel they should. They could also sit down and agree some guidelines with An Bord Pleanála. Some of the sustained NIMBY objections are scandalous. Often backed by Government ministers!!

7. The rates are too low. The rates should act as a deterrent to having derelict properties. At the moment they don't.

5. The cost of building materials....
Like blocks, timber, concrete,insulation, etc..

7. By property tax did you actually mean vacant site tax???

lcwill

19233974 wrote: »

3 places i went to see in december were investor properties (small landlord) that they had decided to sell. As i assume they felt the market had peaked, maybe the change in goverment will nudge a few more...how many im not sure

I'm sale agreed on one place at the moment. Biding my time for a few weeks before I decide to go ahead and wondering about revisiting the sale agreed price. Sinn Fein win has changed some of the math on this.

JamesMason

lcwill wrote: »

I'm sale agreed on one place at the moment. Biding my time for a few weeks before I decide to go ahead and wondering about revisiting the sale agreed price. Sinn Fein win has changed some of the math on this.

You might not be the only one reconsidering business in the light of events. A lot of estate agents will be getting headaches over the coming weeks and months ahead.