2021 Irish Property Market chat - *mod warnings post 1*

Villa05

Almost two-thirds of Nama homes offered for social housing 'lost to private sector'

Figures obtained by the Irish Examiner show that in some counties — Limerick, Meath, and South Dublin — upwards of four out of every five, or 80%, of houses offered by Nama were not taken up for social housing.


In Limerick City and County, only 32 of 166 homes identified were taken up by the local authority, while in Meath only 39 of 236 homes identified were accepted, meaning 197 or 83% were not secured.


For Cork City, the documents show that Nama offered 470 properties with just 157 taken up, leaving 313 (66%) behind, while in Cork County a total of 849 properties were offered but just 357 were taken — 492 (57%) were unwanted.

A bit of good journalism would be an investigation in to how many of these same houses were procured through HAP or long term leases from investment funds as most NAMA sales were done in bulk to investment funds

fliball123

PropQueries wrote: »

That's not "if this is the case". That's in their actual 2020 reports to their investors

I am not doubting you I am asking the question if this is the case why are they not using them.

Cyrus

PropQueries wrote: »

But that's the thing. Cairn Homes average selling price last year was c. €350k and Glenveagh's average selling prince was c. €311k. And that included site costs, VAT, profit margins etc. etc.

Many new builds in the midlands are currently asking under c. €250k and last year in Co. Waterford they were selling two bed a-rated terraced units for c. €160k.

I don't understand where people pull figures of €500k, €450k or €400k that developers need to break even. Cairn Homes and Glenveagh are not just breaking even, but making decent profits by building and selling their new build units in and around Co. Dublin for an average of under €350k at the moment.

hang on

did you look at the glenveagh annual report?

they made a decent loss

also cairn and glenveagh are sitting on super cheap landbanks hoovered up between 2012 and 2014, if you were starting right now and needed to buy a site to build in dublin the prices being mentioned make sense.

PropQueries

fliball123 wrote: »

I am not doubting you I am asking the question if this is the case why are they not using them.

That's quite literally the €1 Billion question

PropQueries

Cyrus wrote: »

hang on

did you look at the glenveagh annual report?

they made a decent loss

also cairn and glenveagh are sitting on super cheap landbanks hoovered up between 2012 and 2014, if you were starting right now and needed to buy a site to build in dublin the prices being mentioned make sense.

Which is my original point. The c. €100k the state wants to lend home buyers to buy a home in Dublin is just a direct subsidy to landowners.

Obviously without this scheme, the developer would need to sell their new built homes for c. €100k less in the private market and buy the site for cheaper.

If they overpaid for the land, that is not the taxpayers fault and we have various methods to deal with such developers i.e. liquidation etc.

If I open a jean selling shop and overpay for the jeans, the Government doesn't come in and offer to pay a third of the cost of the jeans for anyone interested in buying them. No, I go bankrupt. Same should apply to developers IMO

HansKroenke

PropQueries wrote: »

Which is my original point. The c. €100k the state wants to lend home buyers to buy a home in Dublin is just a direct subsidy to landowners.

Obviously without this scheme, the developer would need to sell their new built homes for c. €100k less in the private market and buy the site for cheaper.

If they overpaid for the land, that is not the taxpayers fault and we have various methods to deal with such developers i.e. liquidation etc.

If I open a jean selling shop and overpay for the jeans, the Government doesn't come in and offer to pay a third of the cost of the jeans for anyone interested in buying them. No, I go bankrupt. Same should apply to developers IMO

This capitalist talk has no place in an Irish housing market discussion.

Graham

PropQueries wrote: »

The c. €100k the state wants to lend home buyers to buy a home in Dublin is just a direct subsidy to landowners.

Obviously without this scheme, the developer would need to sell their new built homes for c. €100k less in the private market and buy the site for cheaper.

Only if you're working from the obviously flawed assumption that the houses wouldn't sell for the same price without the scheme.

Villa05

Marius34 wrote:

Why it makes sense to Rent? How come you so confident that the ones who bought recently are in worst position then the ones Renting?

I think both situations are dire. Overpriced housing in a country with massive debt and costly future issues such as health and pensions or even higher rents
Every bubble needs a bit of a push factor to help it blow larger

Rents are that factor and will continue to be unless supply is addressed. If supply is not addressed it will be an added factor as well as health and pensions.
Home owners and renters will then have to pay much higher taxes in the future to cover these 3 issues amongst others

It all could be so very different, we could run the country in a way that helps our citizens or continue to pander to landowner interests to the detriment of everyone else including home owners

Graham wrote:

Only if you're working from the obviously flawed assumption that the houses wouldn't sell for the same price without the scheme.

There's a show on rte called how to be good with money where the presenter uses sugar cubes to explain financial conundrums to viewers

If sugar cubes are used to purchase houses and you give customers more sugar cubes for this specific purpose. What do you think happens houses where supply is restricted

Do you think they need more less or the same amount

hometruths

Graham wrote: »

Only if you're working from the obviously flawed assumption that the houses wouldn't sell for the same price without the scheme.

Are you saying you think the scheme will have no impact on prices?! That seems a pretty obviously flawed assumption to me (and the ESRI, Central Bank etc etc)

thefridge2006

jill_valentine wrote: »

Because getting out of being a renter in this country is an "at all costs" priority. Whatever happens in the next ten years, I would rather be struggling with a mortgage payment than meeting rent.

This is all down to terrible government policies such as HAP. This scheme has done nothing but pump up rent and is still pumping it up. FFFG have done absolutely nothing to help the housing situation and i would go as far as saying if they did nothing for the last 10 years we'd be in a better posit6ion with regards to rental prices and selling prices. They are so incompetent

cnocbui

Markitron wrote: »

Hasn't it always been like that?

Both threads are dominated by a single individual, and no, it hasn't always been that way on this thread.

fliball123

Villa05 wrote: »

I think both situations are dire. Overpriced housing in a country with massive debt and costly future issues such as health and pensions or even higher rents
Every bubble needs a bit of a push factor to help it blow larger

Rents are that factor and will continue to be unless supply is addressed. If supply is not addressed it will be an added factor as well as health and pensions.
Home owners and renters will then have to pay much higher taxes in the future to cover these 3 issues amongst others

It all could be so very different, we could run the country in a way that helps our citizens or continue to pander to landowner interests to the detriment of everyone else including home owners




There's a show on rte called how to be good with money where the presenter uses sugar cubes to explain financial conundrums to viewers

If sugar cubes are used to purchase houses and you give customers more sugar cubes for this specific purpose. What do you think happens houses where supply is restricted

Do you think they need more less or the same amount

Your first sentence is wrong overpriced housing in the highly sought after areas in the country..Please stop extrapolation Dublin prices for the rest of the country. Also we have discussed the opinion that we are currently in a bubble with relation to house prices, you are yet to prove that we are currently in one. People have been shouting bubble since 2017 and the price of houses have not shown the same trajectory of being in bubble territory.

PropQueries

Looks like the opening salvo on Ireland's low tax rates has begun with the Chancellor increasing the UK's corporation tax rates from 19% to 25% from April 2023 in today's budget.

That with the EU member states agreeing last week on new transparency rules for multinational companies reporting tax payments across the bloc, means the big economies are preparing to come after countries like Ireland very quickly IMO

If continued FDI into Ireland has as big an impact on sustaining current property prices as I think it does, I think the above two news items are incredibly important IMO

hometruths

Villa05 wrote: »

Regular source of dispute here:

David McWilliams talks through why he believes that we need 50,000 units built per year in the last 12 minutes of this podcast: How Ireland really works

50,000 a year is madness. He's allowing 10,000 a year for obsolescence which is insane. He says this is conservative! His other assumptions are equally bonkers.

awec

PropQueries wrote: »

Looks like the opening salvo on Ireland's low tax rates has begun with the Chancellor increasing the UK's corporation tax rates from 19% to 25% from April 2023 in today's budget.

That with the EU member states agreeing last week on new transparency rules for multinational companies reporting tax payments across the bloc, means the big economies are preparing to come after countries like Ireland very quickly IMO

If continued FDI into Ireland has as big an impact on sustaining current property prices as I think it does, I think the above two news items are incredibly important IMO

You're going to have to show your working out on this one I think. Can you explain how the UK (a non-EU state, in case you're unaware) raising it's corpo tax rate is a "salvo" on our (an EU state) tax rate?

One Ireland's competitors for FDI is making it less attractive to invest there. This is terrible news for Ireland?

PommieBast

thefridge2006 wrote: »

This is all down to terrible government policies such as HAP. This scheme has done nothing but pump up rent and is still pumping it up. FFFG have done absolutely nothing to help the housing situation and i would go as far as saying if they did nothing for the last 10 years we'd be in a better posit6ion with regards to rental prices and selling prices. They are so incompetent

I disagree about incompetent but otherwise yes. The political pressure has been to get house prices back up so the negative effects are entirely by design because they go hand-in-hand in trying to re-obtain bubble prices for those who bought in the mid-2000s.

Yurt2

combat14 wrote: »

looks like it is time to cut the dole, HAP payments, COVID payments and business supports the country simply afford all these payments at current rates and borrowing any more

serious crisis on the way if we dont tighten our belt

Well that's a one way to breezily waltz a country into chaos.

Cyrus

PropQueries wrote: »

That with the EU member states agreeing last week on new transparency rules for multinational companies reporting tax payments across the bloc, means the big economies are preparing to come after countries like Ireland very quickly IMO

why do you think is is important? You do realise the CBCR has been in place since 2016 and this is just advocating making the information public, the tax authorities already have this information for the past 3 or 4 financial years.

PropQueries

awec wrote: »

You're going to have to show your working out on this one I think. Can you explain how the UK (a non-EU state, in case you're unaware) raising it's corpo tax rate is a "salvo" on our (an EU state) tax rate?

One Ireland's competitors for FDI is making it less attractive to invest there. This is terrible news for Ireland?

Because it gives us a very clear signal into the mindset of the negotiators from the bigger world economies during the current OECD global tax reforms which are due to be completed by the middle of this year IMO

Low taxes are out. Big government is back. And, big government must be funded.

awec

PropQueries wrote: »

Because it gives us a very clear signal into the mindset of the negotiators from the bigger world economies during the current OECD global tax reforms which are due to be completed by the middle of this year IMO

Low taxes are out. Big government is back. And, big government must be funded.

You're overplaying your hand on this one.

It sends a very clear signal that post-Brexit Britain is starting to move down it's inevitable path to change. You appear under the impression that we're all going to be trying to follow them down that same path, I for one am sceptical of this notion.

Yurt2

fliball123 wrote: »

Your first sentence is wrong overpriced housing in the highly sought after areas in the country..Please stop extrapolation Dublin prices for the rest of the country. Also we have discussed the opinion that we are currently in a bubble with relation to house prices, you are yet to prove that we are currently in one. People have been shouting bubble since 2017 and the price of houses have not shown the same trajectory of being in bubble territory.

Housing agency report. Every major urban area (and more besides if you dig into it) are rated unaffordable by internationally defined and accepted metrics.

Is housing in Leitrim affordable for a median earner? Yes. In the same way a house in Wallagongaroo in rural Queensland is affordable. But that doesn't mean Australia doesn't have the same type of affordability crises in its income generating cities (essentially where their economy is) as Ireland does.

Rightly, people are losing patience with the wheeze that Ireland is affordable to the typical Joe and Mary in the middle of the income distribution just because some people with skin in the game says it is. It's blatantly a large and growing societal problem, and the penny is finally beginning to drop politically.

fliball123

schmittel wrote: »

50,000 a year is madness. He's allowing 10,000 a year for obsolescence which is insane. He says this is conservative! His other assumptions are equally bonkers.

Including the the notion that we are in a bubble that he contends and that cheap and available credit is not needed when all previously bubbles have been predicated on it ..

fliball123

PropQueries wrote: »

Because it gives us a very clear signal into the mindset of the negotiators from the bigger world economies during the current OECD global tax reforms which are due to be completed by the middle of this year IMO

Low taxes are out. Big government is back. And, big government must be funded.

I believe we are still in control of our taxes has anything changed? The drive to stop us with our corpo tax being low has been ongoing for a decade.

fliball123

Yurt! wrote: »

Housing agency report. Every major urban area (and more besides if you dig into it) are rated unaffordable by internationally defined and accepted metrics.

Is housing in Leitrim affordable for a median earner? Yes. In the same way a house in Wallagongaroo in rural Queensland is affordable. But that doesn't mean Australia doesn't have the same type of affordability crises in its income generating cities (essentially where their economy is) as Ireland does.

Rightly, people are losing patience with the wheeze that Ireland is affordable to the typical Joe and Mary in the middle of the income distribution just because some people with skin in the game says it is. It's blatantly a large and growing societal problem, and the penny is finally beginning to drop politically.

Go on show me these international defined metrics please. I did the math on here multiple times with a couple on the median wage they can still get houses in every county even in certain parts of Dublin its just when they want to go to parts that are in demand or houses that are on the higher end of the spec...Unfortunately you pay for quality and location as is the case in every first world country in the world.

https://www.cso.ie/en/releasesandpublications/ep/p-eaads/earningsanalysisusingadministrativedatasources2018/annualearnings/

Currently over 600 in Dublin alone coming in under 275k

Median wage in Ireland in 2018 was 36,095 (note this includes all part time workers as well)

We are conservative with our 3.5 times borrowings and 10% deposit under the ECB rules and when compared to other OCED countries

So the Math - 36k * 2 (as usually nowadays houses are bought by couples) = 72

Multiply by the very conservative 3.5 times you can borrow 72 * 3.5 = 252k

Add in your 10% deposit 252k + 25k = 277k

Now as I say 600 houses currently available for sale under this price in Dublin alone and 6200 well over half the current available stock up for sale on myhome available for under this price. How are we unaffordable again. Is it by some antiquated outdated method where mum must stay at home and look after the kids and not work ever calculation?

So in your analogy the typical Joe and Mary can afford a house at under 275k and there are well over half the current stock available in the country for under this price but I think the Average Joe and Mary want a mansion with a sea view with an A1 energy rating unfortunately these luxuries, add-ons and locations cost money.

Hubertj

schmittel wrote: »

50,000 a year is madness. He's allowing 10,000 a year for obsolescence which is insane. He says this is conservative! His other assumptions are equally bonkers.

Is 50k the highest number so far? Are the developers even stating that?!?

As for obsolescence perhaps he considers an acceleration in buildings having to be replaced? Georgian / Victorian houses become economically unviable to renovate / modernise?

PropQueries

awec wrote: »

You're overplaying your hand on this one.

It sends a very clear signal that post-Brexit Britain is starting to move down it's inevitable path to change. You appear under the impression that we're all going to be trying to follow them down that same path, I for one am sceptical of this notion.

Don’t get me wrong I’m no fan of big government as I know where it leads.

But that’s the way the wind is blowing IMO

JimmyVik

Villa05 wrote: »

I think both situations are dire. Overpriced housing in a country with massive debt and costly future issues such as health and pensions or even higher rents
Every bubble needs a bit of a push factor to help it blow larger

Rents are that factor and will continue to be unless supply is addressed. If supply is not addressed it will be an added factor as well as health and pensions.
Home owners and renters will then have to pay much higher taxes in the future to cover these 3 issues amongst others

It all could be so very different, we could run the country in a way that helps our citizens or continue to pander to landowner interests to the detriment of everyone else including home owners





There's a show on rte called how to be good with money where the presenter uses sugar cubes to explain financial conundrums to viewers

If sugar cubes are used to purchase houses and you give customers more sugar cubes for this specific purpose. What do you think happens houses where supply is restricted

Do you think they need more less or the same amount

That has me in knots
Excellent post.

Meet salt and Pepper.
Both Salt and Pepper have 5 sugar lumps to buy a house.
The government give Salt 2 sugar lumps, but nothing to Pepper.

Teapot the builder is watching this. What is the outlook for Pepper?

awec

fliball123 wrote: »

I believe we are still in control of our taxes has anything changed? The drive to stop us with our corpo tax being low has been ongoing for a decade.

We still have the veto but it's not like we could veto proposals and they'd turn around and be like "ah that's grand lads, we'll just forget about it".

There will be changes around taxation, compromises will be made. Saying no all the time won't work, we'll have to engage. The corpo rate may go up or it may stay the same.

The idea that Ireland is set to be absolutely shafted is tenuous. The fixation on what the UK is doing is tenuous and ignorant of the huge elephant in the room on that front.

hometruths

Hubertj wrote: »

Is 50k the highest number so far? Are the developers even stating that?!?

As for obsolescence perhaps he considers an acceleration in buildings having to be replaced? Georgian / Victorian houses become economically unviable to renovate / modernise?

He's actually saying 55k a year, which I think is the highest I have heard.

Re obsolescence he's not talking about an acceleration, or Georgian/Victorian, just going with the old chestnut based on long term average of 0.5% houses becoming obsolete every year.

MacronvFrugals

Hubertj wrote: »

Is 50k the highest number so far? Are the developers even stating that?!?

As for obsolescence perhaps he considers an acceleration in buildings having to be replaced? Georgian / Victorian houses become economically unviable to renovate / modernise?

The housing minister said a blatant lie in an interview last week stating if we don't open up construction we'd be missing out on 800 new builds a week.

42k a year sure we're grand