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

awec

Houses are still just 4 walls and a roof in the same way that a 2021 car is the same as the one Henry Ford built, a few doors and 4 wheels.

Bass Reeves

PropQueries wrote: »

So, let's remove that Cairn Homes stated that they did purchase many of their sites for c €15k. What's the current "market price" for a site with planning for a semi-detached house in Dublin? What's the current "market price" for a site with planning for a semi-detached house in Co. Tipperary?

Does it really account for most of that €225k cost difference between building and selling a house in Tipperary compared to Dublin?

I day in Dublin site costs would be in the region of 100k.+. In one of the bigger urban centres in Tipp such as Nenagh, Thurles or Clonmel you are probably looking a 40-50k, however if you go to satellite villages outside these urban centers it probably sub 30 k. All of these before development levies or services supplied. You will supply services in Tipp at 50-60% of Dublin's costs

PropQueries

Bass Reeves wrote: »

Houses and Apartments are not similar to decades ago. First off since the last boom and it's fallout remember the apartment block build by the SF developer and it's ramifications. Engineering certification as well as Electrical and plumbing certification has added 15-20k to the price of a new build. Insulation to A rating levels has probably added 20k to house prices since the early 90's most of the cost added in the last 5-10 yeats

Go back a decade before that and houses were mostly build or were available anyway at builders finish stage, finished houses now are costing another 15-20k. Addition of downstairs toilet added 2-4k to house prices as well.

A decade previous to that the on suite came in for the master bedroom about 3-5k added to cost again.

All in all all these changes have added 60-80k to houses costs. With Dublin labour prices it probably nearer 100 k

If that's true, how are the developers in Co. Tipperary going to be able to buy a site, pay levies etc. build the homes and make a profit by selling them for c. €225k each as per the proposed affordable housing bill?

Robson99

It doesn't make a bit of difference if every site in the country was for nothing.
We have neither the tradesmen or material supply in the country to build any more than we are currently doing. So there is no solution to the problem.
Those thinking that a SF govt will solve the problem would want to be careful what they wish for as there could be less developers and tradesmen to carry out the work.
Major shortage of professionals and trades in the UK. Wouldn't take much for the younger ones to go back there working where they could earn 30 -50k a year more

cnocbui

PropQueries wrote: »

If that's true, how are the developers in Co. Tipperary going to be able to buy a site, pay levies etc. build the homes and make a profit by selling them for c. €225k each as per the proposed affordable housing bill?

At a rough guess, I'd say they aren't. Putting forth some aspirational ideal generated by a civil servant as a banchmark for market reality, might possibly be unrealistic.

fliball123

Villa05 wrote: »

Would it matter if rent is set at % of income and do something similar for those who wish to buy. For those who buy the land stays in state ownership

Need an alternative to the private market, because its clearly not working

All supports removed for rich and poor. Let both the rental and sales market reach where they are going to go. Tax rentals on potential income instead of actual income that way if a REIT leaves a rental which should be bringing in 2k idle they still have to pay. It will force the rental market to go where it should be naturally.
Same goes with property price remove all state support (It will be hard but those of us paying tax and getting up in the morning are finding it hard with the punitive nature our income tax system) and see where it ends up then they can start again and do things like those not wanting to work can move down the country into , tough sh1t if your not beside mammy anymore. Workers need to be housed as a priority.

cnocbui

Bass Reeves wrote: »

I day in Dublin site costs would be in the region of 100k.+. In one of the bigger urban centres in Tipp such as Nenagh, Thurles or Clonmel you are probably looking a 40-50k, however if you go to satellite villages outside these urban centers it probably sub 30 k. All of these before development levies or services supplied. You will supply services in Tipp at 50-60% of Dublin's costs

This is a very dangerous path you are treading; it leads to accusations of wanting to snatch avocado toast from the mouths of babes and highly skilled nurses.

Marius34

cnocbui wrote: »

At a rough guess, I'd say they aren't. Putting forth some aspirational ideal generated by a civil servant as a banchmark for market reality, might possibly be unrealistic.

Maybe those houses are smaller 80-90sqm. with cheaper internal materials, than I see 225K as a feasible price, where land is cheaper.

mcsean2163

awec wrote: »

Houses are still just 4 walls and a roof in the same way that a 2021 car is the same as the one Henry Ford built, a few doors and 4 wheels.

In 1908 the Model T cost $850, or around $21,340 in 2012 dollars when adjusted for inflation.

So a budget car costs less in the US as it was in 1908. Imagine that, being efficient and keeping costs down but delivering a better product.

https://www.caranddriver.com/shopping-advice/g26522634/best-cars-under-20000/

cnocbui

This country never ceases to amaze me as to how retarded and dysfunctional it is!

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https://scsi.ie/consumer/build/housing-development-calculator/



And in 2021, they want you to start your query in square feet :rolleyes:

Hubertj

cnocbui wrote: »

Those Sisk numbers you like so much - they wouldn't be because they don't included the cost of the land, by any chance? What do you imagine they had to pay the county council in terms of development fees and such? You don't suppose it was a big fat zero, by any chance?

https://www.irishbuildingmagazine.ie/2018/11/01/sisk-living-delivers-90-social-houses-in-tallaght/

I have no idea why legislation drafted by a bunch of Irish civil servants believes you can build and deliver an A-rated home in Tipp for €255 K. Are there actual examples of such houses being built put to market at that price?

The article you quote states

“ Recognising the urgent need for these houses for South Dublin County Council and in the context of the current chronic need for housing in Tallaght, Sisk Living implemented an aggressive construction programme for this development by utilising off-site fabrication, the selection of quality sub-contractors with the right resources and, importantly, the correct sequencing of the works which included a rising wall system which can be built quicker than blockwork and irrespective of poor weather conditions.”

Can anyone that has actual knowledge (not a spoofer) explain difference and efficiencies of “rising wall” vs “blockwork”?

Bass Reeves

PropQueries wrote: »

If that's true, how are the developers in Co. Tipperary going to be able to buy a site, pay levies etc. build the homes and make a profit by selling them for c. €225k each as per the proposed affordable housing bill?

225k would probably be tight as things are changing fast and not for the better. I have two rental properties bother about 20 miles from Limerick. If I get an tradesperson on the Limerick side of them to get work done he is 20-30% more expensive than if I get a tradesperson 10 miles on the other side of them. However labour prices are rising rapidly and exponentially mainly due to extension work on houses.

However the small Tipp builder might buy an acre site in Tipperary town for 350k, he may even have bought it 5-6 years ago for half that. He applies for planning permission and gets it for 12 houses 6 town houses and 6 semi-D's. I think Tipp development levies are in the 10-15k range. His engineer and planning costs to get planning is probably 20-30% of Dublin site costs. He probable have planning got for 500-1k/house.

He will have no huge finance costs at this stage. Site is still costing him sub 30k/ site. He will more than likely do the ground work himself maybe with his own machinery. He needs no security on site except the obligatory wire mesh panels that he has at home. He will bring have 3-4 block layers who he may hire direct rather than a subcontractor supplying blocklayers and taking a margin. He will build one set of the semid's and a block of three townhouses. If he has a good reputation 50% of material will be on credit. Total borrowing at this stage would be in the 500k-1 million mark probably a lot nearer 500k than 1 million. He will sell what is build and finish the rest of the site probably presold.

His labour costs will be 50-60% of Dublin costs. As the overall project is small he will finance it himself.
It's trying to comparing apples and oranges. It's easy to take a bit out of an apple skin and all try it with an Orange and it's a different matter

Bass Reeves

Hubertj wrote: »

The article you quote states

“ Recognising the urgent need for these houses for South Dublin County Council and in the context of the current chronic need for housing in Tallaght, Sisk Living implemented an aggressive construction programme for this development by utilising off-site fabrication, the selection of quality sub-contractors with the right resources and, importantly, the correct sequencing of the works which included a rising wall system which can be built quicker than blockwork and irrespective of poor weather conditions.”

Can anyone that has actual knowledge (not a spoofer) explain difference and efficiencies of “rising wall” vs “blockwork”?

Rising walls are common now. I think internal construction is timber frame. Then I think to achieve A rating a thick layer of insulation is attached to the timber frame. Then a single shuttering system is used to pour a mass concrete layer outside the insulation. It is done in stages so referred to as a rising wall

MacronvFrugals

Is it not significantly better value for the council just to buy these?



Dublin social housing portfolio guiding at €21m

The prospect of immediate rental income copper-fastened by the security of a 25-year government lease is expected to see strong interest from investors in the sale of Project Haven, a portfolio of approximately 60 social housing units across Dublin’s north, south and west suburbs.

The portfolio is producing a guaranteed gross rental income of €952,000 per annum and is being offered to the market by agent CBRE on behalf of Allied Irish Property and the Topland Group at a guide price of €21 million.

https://www.irishtimes.com/business/commercial-property/dublin-social-housing-portfolio-guiding-at-21m-1.4549153

JimmyVik

MacronvFrugals wrote: »

Is it not significantly better value for the council just to buy these?

Dublin social housing portfolio guiding at €21m

https://www.irishtimes.com/business/commercial-property/dublin-social-housing-portfolio-guiding-at-21m-1.4549153

They cant tap the tax payer for the money all in one go. Easier to bleed them for years instead.

Bass Reeves

Hubertj wrote: »

The article you quote states

“ Recognising the urgent need for these houses for South Dublin County Council and in the context of the current chronic need for housing in Tallaght, Sisk Living implemented an aggressive construction programme for this development by utilising off-site fabrication, the selection of quality sub-contractors with the right resources and, importantly, the correct sequencing of the works which included a rising wall system which can be built quicker than blockwork and irrespective of poor weather conditions.”

Can anyone that has actual knowledge (not a spoofer) explain difference and efficiencies of “rising wall” vs “blockwork”?

I forgot about the second part of your question efficiencies. It's harder to get what are called wet trades nowadays. This replaced the need for blocklayers. And maybe plasterers as a wet dash can be applied to the mass concrete wall with out preplastering. If you wanted to complete a large development and had did not have to finance or sell it in stages you could really speed up the build process. Itight also allow you to cut costs by making your own ready mix on site on a bigger job.

It would have little savings outside of Dublin up to now even though I think a rural site near me used it for an 8-10 unit site

timmyntc

MacronvFrugals wrote: »

Is it not significantly better value for the council just to buy these?



Dublin social housing portfolio guiding at €21m





https://www.irishtimes.com/business/commercial-property/dublin-social-housing-portfolio-guiding-at-21m-1.4549153

JimmyVik wrote: »

They cant tap the tax payer for the money all in one go. Easier to bleed them for years instead.

As explained earlier today, EU fiscal rules mean we cant borrow as much as we like to build housing. If you agree a 25year lease it doesnt show up as 25years of spending in one go, its spread across years.

That said, I dont know why the state doesnt try take advantage of the pandemic finance available & finance as many social builds as possible within this window before the taps are turned off and EU spending rules back in place.

MacronvFrugals

timmyntc wrote: »

As explained earlier today, EU fiscal rules mean we cant borrow as much as we like to build housing. If you agree a 25year lease it doesnt show up as 25years of spending in one go, its spread across years.

That said, I dont know why the state doesnt try take advantage of the pandemic finance available & finance as many social builds as possible within this window before the taps are turned off and EU spending rules back in place.

I would also describe anything that forces us into these wreckless lease deals as "dangerous"

Economists Philippe Martin, Jean Pisani-Ferry and Xavier Ragot said in a policy paper that the 3% cap, along with a rule requiring governments to work towards keeping debt to 60% of GDP, are obsolete and the deficit cap could even spur dangerously unnecessary budget rigour after the crisis.

https://www.reuters.com/article/us-eu-budget-france-idUSKBN2C018I

Bass Reeves

timmyntc wrote: »

As explained earlier .

We have been through many of these same debates for the last 12 months. Props continually bring up the Sisk 2018 house build price for a one off development for Dublin LA. He has ignored price rises since. He continually cannot grasp that you can pay any trades person less in Rural Ireland than in Urban situation or especially in Dublin's.

It's the same with a number of other contributors they cannot seem to grasp rules and regulations. They cannot seem to understand that we have a limited labour supply and how that limit housing supply. You can explain again and again and again but Props will quote the Sisk figure ignoring that the pricing is about 4 years out of date. Some other contributor will come on about the number of vacant houses ignore where they are situated and whether they need refurbishment.

This time last year as we came out of the first wave we had lads predicting a 20-70% price collapse and telling people buying to low ball bid, play hard ball as well as peudo advice to drop sales. Some continued predict not just price drop but price collapse right out into Autumn predicting a price collapse in 3-4 months time from there prediction

1percent

MacronvFrugals wrote: »

Is it not significantly better value for the council just to buy these?



Dublin social housing portfolio guiding at €21m






https://www.irishtimes.com/business/commercial-property/dublin-social-housing-portfolio-guiding-at-21m-1.4549153

Running the rule across that it has a proposed yield of 4.5% with an average rent of €1322/unit. Is the rent that cheap or may it be a case that not all units are occupied?

hmmm

MacronvFrugals wrote: »

Is it not significantly better value for the council just to buy these?

From the report, this costs the council €952,000 a year versus having to pay €21 million up front.

It might be better value in the longer term, but I can understand where the council are coming from if they've been told to go out and maximise their current budgets.

MacronvFrugals

hmmm wrote: »

From the report, this costs the council €952,000 a year versus having to pay €21 million up front.

It might be better value in the longer term, but I can understand where the council are coming from if they've been told to go out and maximise their current budgets.

Even with the council on the hook for maintenance and upward only rent reviews?

Index-linked rent reviews are provided for in every third year.

All that money and the state has no asset to show for it is what i find just crazy

PropQueries

Bass Reeves wrote: »

We have been through many of these same debates for the last 12 months. Props continually bring up the Sisk 2018 house build price for a one off development for Dublin LA. He has ignored price rises since. He continually cannot grasp that you can pay any trades person less in Rural Ireland than in Urban situation or especially in Dublin's.

It's the same with a number of other contributors they cannot seem to grasp rules and regulations. They cannot seem to understand that we have a limited labour supply and how that limit housing supply. You can explain again and again and again but Props will quote the Sisk figure ignoring that the pricing is about 4 years out of date. Some other contributor will come on about the number of vacant houses ignore where they are situated and whether they need refurbishment.

This time last year as we came out of the first wave we had lads predicting a 20-70% price collapse and telling people buying to low ball bid, play hard ball as well as peudo advice to drop sales. Some continued predict not just price drop but price collapse right out into Autumn predicting a price collapse in 3-4 months time from there prediction

Well, given that the affordable housing bill puts a maximum price of c. €225k on a Co. Tipperary A-rated new build home and once you remove land costs, VAT, levies, builders profit etc. etc., the building costs today appear to match up closely with Sisk Livings cost of build 3 years ago, unless that bill is going to be amended to a higher price level.

And if the price of Co. Tipperary homes were to be amended upwards, would they also have to amend the Dublin affordable house prices upwards to the c. €500k - €600k price range?

hometruths

Bass Reeves wrote: »

It's the same with a number of other contributors they cannot seem to grasp rules and regulations. They cannot seem to understand that we have a limited labour supply and how that limit housing supply. You can explain again and again and again but Props will quote the Sisk figure ignoring that the pricing is about 4 years out of date. Some other contributor will come on about the number of vacant houses ignore where they are situated and whether they need refurbishment.

And as sure as night follows day some other contributor will bring up that old canard that the vacant properties are actually derelicts situated in areas where there is no demand.

Seems as good a time as any to repost Timingbelts excellent local breakdown for Dublin city:



Vacancy rate of 9% in Dublin City, with some of the highest demand areas showing vacancy rates of well over double what you'd expect in a normal housing market, never mind a housing shortage crisis?!!

Some contributors indeed ignore the fact a shocking amount of the vacancies are situated in Dublin. And they ignore the fact that Dublin is one of the few locations where the vacancies are rising.

Amadan Dubh

Ronan Lyons writing in The Currency today, of the opinion that the extraordinary situation the past year in the housing market is likely to be a temporary state of affairs. Well, I don't think anyone would dispute that the price rises were unlikely to be sustainable given supply crashed while demand exploded, but it is interesting that his view is that the primary reason for the collapse in supply was due to second hand homes not being put on the market as opposed to construction being shuttered.

https://thecurrency.news/articles/46503/lockdown-liquidity-and-respite-for-homebuyers-what-the-data-tells-us-about-the-outlook-for-house-prices/

Supply has collapsed for two reasons. The first, and less important, is the obvious one: if you’re not allowed build, because of public health restrictions, that will clearly have an impact on the supply of newly built homes. As it happens, and not least because Ireland was not building enough homes anyway pre-covid, this has been secondary. (Indeed, figures out in early May suggest the completion of new homes was surprisingly high in the first quarter of 2021.)

The far more important reason is in the collapse of the second-hand market. If you can’t go see properties, you’re far less likely to put your own home on the market. And of course the longer the pandemic restrictions went on, the clearer it became that prices were rising – so why not wait a little bit longer, even if you were able to list now?

The total number of homes put on the market in the first two months of 2021 was down almost 40 per cent on the same two months in 2020. This pattern is repeated in every market across the country. With strong demand and such weak supply, there were fewer than 12,000 homes available to buy online in Ireland on the 1st of March this year. That figure is simply incomparable to anything in the internet age. The average number of homes for sale online between January 2007 and December 2019 was over 40,000. And while that number had been falling pre-covid, there were still over 20,000 homes for sale on February 1st.

The impact of the first lockdown is obvious: barely 4,000 homes listed for sale over the course of April and May, compared to 12,000 in the typical year. But so is the bounce-back in the following three months. Between June and August, there were 16,000 homes listed last year – almost exactly in line with the 2015-2019 average.

Perhaps surprisingly, given how often you hear commentators claim that the laws of supply and demand don’t apply to housing, the market has been sending us very clear signals over the past fifteen years. When there are fewer homes available to buy, prices increase. When there are between about 4,000 and 5,000 homes on the market, there is little pressure – up or down – on Dublin sale prices. And when there are lots of homes for sale – in some cases up to 7,000 – prices fall rapidly.

It will probably amaze those under the age of 40 to learn that, as recently as the 1980s, a home in Dublin didn’t cost anything more, on average, than a home in rural Ireland. Over the past three decades, however, as the country has found its economic model and entered a prolonged phase of growth, its housing system has been unable to respond at the right scale. Once again, this is supply and demand in action.

The metaphor of staying in shape is probably an apt one. Staying fit is an endless battle. Every day, every week, every month, you have to put the effort in – otherwise the needle will start to shift in the wrong direction.

Keeping housing affordable is the same. It means getting sufficient new housing built, month after month, year after year – decade after decade. Ireland has failed to do that now for three decades. Its housing market is totally out of shape. Here’s hoping that once policymakers have some headspace post-covid, they can finally put in place the long-term systemic housing policy the country needs to enable its growth and its residents to have the home they need.

Now I see why Props talks of seeing big things happening in August - covid restrictions will be all but dusht at that stage and the floodgates of second hand homes hitting the market will be opened (let's not forget Brexit as well, minimal to no fallout)!

timmyntc

MacronvFrugals wrote: »

Even with the council on the hook for maintenance and upward only rent reviews?





All that money and the state has no asset to show for it is what i find just crazy

It is crazy, make no mistake.
But if they are to abide by EU deficit rules then there isnt massive scope for social housing building by govt unless we get spending cutbacks elsewhere.

Really it should be pushed back against rather than accepting it and trying to farm it all out to private sector

AlmightyCushion

MacronvFrugals wrote: »

I would also describe anything that forces us into these wreckless lease deals as "dangerous"




https://www.reuters.com/article/us-eu-budget-france-idUSKBN2C018I

I think it would be a good idea to alter it so that infrastructure spending can be excluded from it. Specifically housing, public transport and green infrastructure. It would stop countries running up debts on tax cuts and things like that but still allow them to provide necessary infrastructure.

fliball123

Amadan Dubh wrote: »

Ronan Lyons writing in The Currency today, of the opinion that the extraordinary situation the past year in the housing market is likely to be a temporary state of affairs. Well, I don't think anyone would dispute that the price rises were unlikely to be sustainable given supply crashed while demand exploded, but it is interesting that his view is that the primary reason for the collapse in supply was due to second hand homes not being put on the market as opposed to construction being shuttered.

https://thecurrency.news/articles/46503/lockdown-liquidity-and-respite-for-homebuyers-what-the-data-tells-us-about-the-outlook-for-house-prices/



Now I see why Props talks of seeing big things happening in August - covid restrictions will be all but dusht at that stage!

Do I point out the obvious again with this train of thought. Zero sum game for every 2nd hand property put up for sale the demand for a 2nd hand property will go up by one as the seller now needs to buy

Hubertj

schmittel wrote: »

And as sure as night follows day some other contributor will bring up that old canard that the vacant properties are actually derelicts situated in areas where there is no demand.

Seems as good a time as any to repost Timingbelts excellent local breakdown for Dublin city:



Vacancy rate of 9% in Dublin City, with some of the highest demand areas showing vacancy rates of well over double what you'd expect in a normal housing market, never mind a housing shortage crisis?!!

Some contributors indeed ignore the fact a shocking amount of the vacancies are situated in Dublin. And they ignore the fact that Dublin is one of the few locations where the vacancies are rising.

0.4% increase in vacancy rate for Dublin if the postmen are to be relied on.

timmyntc

fliball123 wrote: »

Do I point out the obvious again with this train of thought. Zero sum game for every 2nd hand property put up for sale the demand for a 2nd hand property will go up by one as the seller now needs to buy

Some people downsize, others sell their home to finance the building of a new one. Some leave the country.

It's not a massive effect, but its far from zero sum.