GE Exit Poll 10 pm

efanton

charlie14 wrote: »

If that is the plan then neither a company winning a tender or the sub-contractors are going to do it without a profit.
There is also the factor that half this money to build will have to be borrowed as it is outside the fiscal space,, so the interest payments will also add to the costs

I agree, who said they would volunteer to work for nothing.

But the profit margin on work done by a contractor for a finished estate compared to the profit margin of a developer would be massive.

Yes the money for such a big capital expenditure would have to be borrowed.
As with all capital expenditure it would be amortised over 25 years, so in effect would cost the government approx €250 million a year plus interest over that period. The good thing at the moment is the rates that the government can borrow at are in the 1.5% to less than 2% range.

But surely that has to be better than spending €612 million a year renting private houses for social use, and spending a further €170 million a year on emergency accommodation as FG are doing at the moment.

The 100,000 homes will not totally remove the need to rent any private housing, but it would go some way to reducing the costs. In the meantime those cost will only increase as FG are only building 5000 homes a year at the moment which doesn't even cover the new demand let alone bite into the existing massive spending on private accommodation

meeeeh

I don't think anyone is saying current situation is good but those massive profit margin differences that you see don't exist. Nobody will be building houses for 126k, forget about that. The other issue is that neither councils or the state have enough people with expertise to run those tenders. House building was left to the private sector that means there is complete lack of staff employed by the state who can run those projects and at basically zero unemployment very hard to get.

charlie14

efanton wrote: »

I agree, who said they would volunteer to work for nothing.

But the profit margin on work done by a contractor for a finished estate compared to the profit margin of a developer would be massive.

Yes the money for such a big capital expenditure would have to be borrowed.
As with all capital expenditure it would be amortised over 25 years, so in effect would cost the government approx €250 million a year plus interest over that period. The good thing at the moment is the rates that the government can borrow at are in the 1.5% to less than 2% range.

But surely that has to be better than spending €612 million a year renting private houses for social use, and spending a further €170 million a year on emergency accommodation as FG are doing at the moment.

The 100,000 homes will not totally remove the need to rent any private housing, but it would go some way to reducing the costs. In the meantime those cost will only increase as FG are only building 5000 homes a year at the moment which doesn't even cover the new demand let alone bite into the existing massive spending on private accommodation

I am not saying we should be spending on renting or on emergency accommodation.

I am all in favour of building social housing on public land.


The problem is that with vat deducted from the present price of doing so, SF`s price is 50% less using borrowed money for 50% of builds. Which when factored in reduces that SF cost of 126,000 per build to less than 123,500.

Tbh, for me at least with the present cost of doing the same being 185,000, there is no way those figures stack up.

efanton

meeeeh wrote: »

I don't think anyone is saying current situation is good but those massive profit margin differences that you see don't exist. Nobody will be building houses for 126k, forget about that. The other issue is that neither councils or the state have enough people with expertise to run those tenders. House building was left to the private sector that means there is complete lack of staff employed by the state who can run those projects and at basically zero unemployment very hard to get.

Do you work in the constriction industry, do you actually have any idea of what you are talking about?

The surveyor firm’s figures show the pure construction cost of an average estate home now runs at between €1,260 a sq m to €1,610 a sq m.

Linesight bases its calculation on a 100sq m (1,076sq ft) dwelling, implying a total building cost of €126,000 to €161,000 for the average family home.

https://www.irishtimes.com/business/construction/cost-of-building-a-new-family-home-rose-7-5-in-past-year-1.3624692


Form the The Society of Chartered Surveyors Ireland, a couple of year old but material costs have not risen that much. But surely a reputable authority on the cost of constructing a home.

http://www.surveyorsjournal.ie/index.php/the-true-cost-of-building-a-house/
construction cost of a significantly bigger 3 bed €150,000
using the figures supplied a 100 square meter home would cost 132,000



https://www.irishtimes.com/life-and-style/homes-and-property/why-does-a-new-house-cost-what-it-does-1.4001085
translate those costs down to 100 sq mt and yet again not far off the mark


REMOVE SITE COST FROM ALL OF THE ABOVE

What you are forgetting is that taxes, fees and other 'soft' costs account for nearly 50% of the cost of a home. Then add to that a 15% profit margin for the developer. None of these would be applicable.

Offer that contract to build 100,000 homes to one of the big developers in the UK such as McAlpines and they would snap your hands off.

But you are veering away from the point, maybe deliberately I dont know.
The simple fact is this country needs in the region of 100,000 homes.
FG have stated that it would cost them 160,000 per home
Sf claim its 126,000 because it would be a government contract, there would be no profit margin for a developer and the site cost would not be included because homes would be built on state owned land.

You can argue over the exact cost all you like but you cant argue that these homes do not need to be built.

Foxtrol

efanton wrote: »

So SF want to spend an additional 22 billion?
The biggest chunk of the SF proposed spending is in capital expenditure costing in total 9.8 billion over the 5 year period.

The 12.2bn SF plan to increase current spending is a 'bigger chunk' than 9.8bn capital.

leaving 11.2 billion which uses up most if not all the existing fiscal space
They will also increase taxation netting approximately €3.8 BILLION per year to ensure they remain within the fiscal space.
11.2 + 3.8 = 15
15 billion will be the new fiscal space if SF manifesto is implemented and there will be about 3 billion surplus every year.
Even if knock on effects take place in taxation it would be impossible for them to swallow that additional revenue.

When a government decides its going to spend €6.5 billion on capital expenditure for housing it doesn't hand over €6.5 billion cash. Do ordinary people buy their homes or cars for cash?
Did the FG government hand over 750 million cash for the new bridge on the New Ross bypass? Will they hand over more than a billion when they start building the new M20 for Limerick to Cork? Of course they will not, this is capital expenditure and will be amortised so that the payments are spread over 20 to 25 years meaning that it will cost approx 250 million per year over 25 years
If you dont understand how capital expenditure works read this
http://www.davidmcwilliams.ie/lets-join-the-21st-century-with-an-easy-fix-for-housing-crisis-once-and-for-all/

SF has been very open in order to do that it has made it plain they intend to raise taxation by putting in a new tax band. They will also be insisting the banks start paying taxation on their profits. These will offset the costs of their capital expenditure and will still leave them well inside the fiscal space available.

First, your initial calculation ignores the 2.4bn in tax breaks that SF also promised. Even if they collect all the taxes they claim then can without any economic shocks from global market, Brexit, Corona etc, nor any public service pay increases SF will be tight regarding fiscal space, however the problem is they won't raise close to that (which is what my original point was related to their 'costings').

You've already admitted that that the returns of those tax increases are unlikely to last so why are you suddenly using them as a key item for your case? 1.6bn of SF tax breaks are for taxes that are incredibly difficult to avoid, USC and property tax, whereas their new tax income, like a wealth tax, intangible assets, high income levy's/credit reduction, employer PRSI, are all much easier to avoid.

I'm well aware of how capital expenditure is funded. Are you aware that Ireland has one of the highest debt per capita in the developed world? That stands at around 200bn (90k for every worker) and the government has already promised investment of 116bn over the next 10 years, even before you add in the SF extra 12.2bn. The servicing of our debt is already expensive and that is with interest rates currently extremely low. It is extremely risky to continue to add on debt on top of debt, especially while cutting consistent taxes.

What you're saying is 'sure despite struggling to pay down my current borrowing as it is, I can take another loan from a money lender as I'll have no problem paying it back because I'll do overtime'.

FG want to raise increase in the standard rate cut-off point to €50,000. This tax change alone will cost 500 million.
FG currently spend €612 million a year renting private homes for social housing use.
FG also spent €170 million for emergency accommodation last year
Yet you seem to be going nuts that SF will spend less than half of this building homes, and reducing those costs.

Claiming someone is going nuts just shows you can't handle a discussion based on facts.

I've already explained why the above type whataboutery is pointless. I'd call out FF or FG too if they were magicking up unsustainable taxes to attempt to fill in spending double the fiscal space and using a magic 'costings' shield to cover themselves

Seriously do you not take the time or effort to actually read these manifestos for yourself, get out the calculator and do some simple maths?

Or do you have to get all your information from some columnist who has been sloppy in their work, couldn't be bothered to do the maths, and has their own biased agenda?

I've taken all the numbers above directly from the SF manifesto.

You're questioning my competence when so far you haven't understood what 'costings' actually cover, didn't know what the expected fiscal space is, didn't know SF increased promised spend was (or at least the difference between the last two), and still aren't taking into account SF tax reduction promises into your calculations. :rolleyes:

If I'm being so biased then it should be easy for you to refute my arguments but instead you are resorting to creating strawmen and whataboutery.

meeeeh

No I'm noting building trade but we did build our own house and family members are hoping to build theirs. The quotes coming in are not pretty. We also compete for the same type of employees as building sector. I know where our wages are and how hard it is to get people. I don't think anyone will persuade you 100k houses for that money and time frame isn't realistic.

efanton

meeeeh wrote: »

No I'm noting building trade but we did build our own house and family members are hoping to build theirs. The quotes coming in are not pretty. We also compete for the same type of employees as building sector. I know where our wages are and how hard it is to get people. I don't think anyone will persuade you 100k houses for that money and time frame isn't realistic.

Its quite simple. Nearly 50% of the cost of a house is what they call 'soft' costs or charges, surveyor fees, planning, developers profit etc etc. Then
government taxes are then added to that.

So take your typical small new 3 bedroom home in Dublin, they are going for about 300k.

Cut that in half and remove the site cost. That's what it is going to cost the government to build a house.

Is there the work force currently in Ireland to build 20,000 homes in a year.
I would imagine there is. There seem to be no problem for developers to find workers to build student accommodations all over the country, and other such developments. A single brick layer can lay blocks and bricks for a house within 3 or 4 days. 500 bricklayers working year round would put those houses up I would imagine. I haven't got a clue what time it would take for the other trades to be honest.

The men on those sites will be paid the same as any other site. What will not be paid is a fat property developers profit margin, the soft costs, taxes and the cost of the site.

The point is does it matter? What if it took 6 years to build those houses instead of 5, would that be a catastrophe? The catastrophe would be not to even attempt to build on that scale because that's exactly what the country needs at the moment.

I get it SF are an untried entity, how do you trust someone to do a job who has never done it before.

But even if SF dont form a government, and that's looking extremely likely, FF and FG are going to have to do something similar. The country simply cant afford to be spending €612 million every year renting private accommodation for social housing use and another €170 million on top of that for emergency accommodation. Those cost are going to rise and it simply is not sustainable, especially when you consider after all that money is spent the government has absolutely nothing to show for it.

JohnnyFlash

If we divert all our builders and tradespeople to work on building new houses then who will build the commercial property that’s also needed to fuel economic growth? Who will work on retrofitting properties, changing the shïtter in the en-suite bathroom etc m?

If there was an easy answer to all this then it would have been put in place.

meeeeh

It's not that simple at all. Some of the 'soft' cost provide services for the area. Sewage, water, electricity... there is a reason why you have to pay for water connection.

efanton

meeeeh wrote: »

It's not that simple at all. Some of the 'soft' cost provide services for the area. Sewage, water, electricity... there is a reason why you have to pay for water connection.

I'm not saying it will be simple. Its a truly ambitious undertaking.

But the fact remains, what will happen if those homes are not built.
Young couples can no longer afford to buy homes, the government is spending huge sums of money renting private properties for social housing and that is simply not sustainable.

Unfortunately we are we we are because for 20 years governments have all but abandoned capital spending on housing and it has caught up with us.

Me blaming one party, you blaming another isn't going to fix a thing.
it doesn't matter whether it is a SF government or a FF/FG government those homes will have to be built.