Irish Property Market chat II - *read mod note post #1 before posting*

The Student

https://www.boards.ie/discussion/comment/117798494#Comment_117798494

If the price of raw materials are increasing who do you expect to pay for the increased costs?

Jmc25

https://www.boards.ie/discussion/comment/117798494#Comment_117798494

It's only natural that these ideas are suggested at this point . We've had years upon years of this housing model - an entire adult life for many people - and multi general mortgages etc is the logical next step if we continue to follow the model of ever increasing prices, where each generation purchases at significantly higher real costs than the last, in the hope that they'll look back in 20 years and consider the price a bargain compared to the prices of the day.

We had one crash, sure, but that was very much the exception. The underlying trend of the housing market in Ireland and most of the western world has been increases above the rate of inflation and wage growth over a prolonged period.

It's not sustainable, but if you were to try and sustain it, loosening the lending rules (a resounding success last time) longer/multi-generational mortgages would be the things you'd be suggesting.

Essentially I think where we are at the moment is something of a crossroads. Where we go from here will come down to is whether there's more votes to be gotten by maintaining the status quo and keeping homeowners happy, or explicitly pursuing a policy of reductions in house prices, and obviously making those who don't own a home at the moment happy.

enricoh

I finished a big extension and revamp on my house 4 years ago, around 700sq ft ground floor with a bedroom+ ensuite upstairs. Not willy waving but it cost sod all to get it to a builders finish with direct labour and I appreciate labour and materials have taken a fair jump since.

It seems to me government policy is to get prices to go as high as possible. more requirements, a2 ber rating etc etc. Its nuts- inter generational mortgages, sod off we're being sold a pup methinks.

Littleredcar

I pulled out of investor sale last week - investor dragging heels despite being sale agreed a long time. I originally went on the market in October 2020 - had a few viewings. One couple didn’t want house wanted a different area - anyway had first viewing last night - much more interest - same couple turned up and are making a bid today . One lady who’s local actually asked agent to not go to bidding war and for me to basically name a price

PommieBast

https://www.boards.ie/discussion/comment/117799273#Comment_117799273

I am skeptical of the extent that raw material costs are responsible for the increase in prices. Has there been any actual research into this by people who don't have a conflict of interest?

Jmc25

https://www.boards.ie/discussion/comment/117802492#Comment_117802492

I would have assumed that developers would charge the max they feel they can achieve, regardless of their costs.

If they can't make money at the market rate due to increased costs then I'd expect to see a slowdown in building activity rather than houses going up at prices beyond what people will pay for them.

Similarly if costs went down I wouldn't expect to see a reduction in prices - developers would continue to charge the max the market will pay and simply pocket the reduced costs.

SummerK

https://www.boards.ie/discussion/comment/117802492#Comment_117802492

I don't think its just the raw materials driving up the price but instead demand-supply gap.

A friend bought a house for 369k when HTB was 5%. I remember he bought the house couple of months before HTB was increased. Price of that house was revised to 379k the day HTB was increased to 10%.

I also got to know a couple of other developers raised prices by 10k in the following week of increasing HTB %. To me HTB is not 'Help to Buy' but instead 'Help to Builder'.

timmyntc

We already know the pre-pandemic house prices were well above the cost to build.

We also know that the most expensive part of house builds is labour - not materials. I very much doubt that the increase in material costs have eroded that massive profit margin that was there pre-pandemic for new builds.

awec

https://www.boards.ie/discussion/comment/117802694#Comment_117802694

This was the whole point of help to buy.

That house you mentioned with HTB at 369k, your friend would have needed a deposit of 36,900. Minimum 18,450 of their own money, combined with the 18,450 from HTB.

With the 10% HTB at 397k, they needed a deposit of 39,700. But they could get up to 30k from HTB, and therefore only needed 9,700 of their own money, half of what they needed to save before.

This has been the case since day 0 of HTB, it has never been much of a secret. Developers raising prices in line with increases was the whole point, the main purpose of HTB was to increase prices so developers would build more.

Buyers pay a bit more for the property, and therefore have slightly higher monthly mortgage payments, but the amount of their own money they need to put in at the very start drops massively and in many cases will result in people being able to buy years in advance of when they otherwise would be able to.

L1011

https://www.boards.ie/discussion/comment/117799015#Comment_117799015

Good luck finding anywhere 3km from another house in Ireland that isn't in absolute wild countryside. Sewage treatment plants have to be near where the sewage is being produced.

Bass Reeves

https://www.boards.ie/discussion/comment/117802724#Comment_117802724

Labour costs have increased as well as materials. As well labour efficiency had declined on larger sites.

Plumbers and electricians cannot be got for love or money even in rural areas. Other trades are scarce as well.

jill_valentine

So here's a hypothetical situation based on a relative's dilemma (single, single income)

a) Buy a shoebox apartment now in a fairly grim town that they could have paid off in five years, but would more or less guarantee being stuck in a not nice town and their horrible job until then - this is a limited time offer though, because the seller is a friend.

b) Try going through Rebuilding Ireland, which would boost buying power to about 180-190k in Dublin County somewhere, putting other work options on the table - but would be at least next year before the app was processed.

Prices aren't coming down or stock going up in a hurry so I'd be inclined to say a), go with the bird in the hand, and at least build equity. And having tried going through RIHL myself, it's a long and messy process and I wouldn't be at all confident that vendors would be willing to accept it even if it was the best offer. I'm dubious you'll get anything in Dublin for 180k by then at all tbh.

I've toyed with the idea of a) myself here before on and off, but it's different when it's you going to be living it I suppose. And it would mean losing your first time buyer privileges.

Just curious for other thoughts seeing as I haven't been on the board for a while.

MacronvFrugals

FF are getting fairly drastic at this point, they may sense an opportunity with their recent bounce in poll numbers

"Vacant property tax likely under Housing For All proposals"

https://www.irishtimes.com/news/environment/vacant-property-tax-likely-under-housing-for-all-proposals-1.4656246

Mad_maxx

https://www.boards.ie/discussion/comment/117802724#Comment_117802724

The most expensive part of house builds is land

yagan

https://www.boards.ie/discussion/comment/117804266#Comment_117804266

Here's another hypothetical, the average Irish town can actually a better quality of life than many suburbs in Dublin. Actually it's not a hypothetical, it's a fact from my own experience.

cnocbui

https://www.boards.ie/discussion/comment/117802724#Comment_117802724

What is the profit margin? Got any links?

cnocbui

https://www.boards.ie/discussion/comment/117804874#Comment_117804874

Possibly in Dublin in exceptional cases, but still unlikely.

jill_valentine

That's not a hypothetical, it's an opinion that's not really relevant to the question. Fairly tired of the "Just move out of Dublin!" thing, people have reasons for doing that beyond just forgetting that's an option.

Myself and my family are all from the country or small towns, nobody's labouring under illusions. In this specific case it would very definitely represent a drop in quality of life. The question is whether the trade off is worth it.

_Brian

https://www.boards.ie/discussion/comment/117804874#Comment_117804874

Maybe in major urban areas, but outside that it isnt the case.

Marius34

https://www.boards.ie/discussion/comment/117805602#Comment_117805602

I would say in most part of Dublin, residential land would cost more than labor. But it as well depends what we consider Dublin. I would agree that overall country wise, residential land would be lower than labor costs.

drogon.

https://www.boards.ie/discussion/comment/117804827#Comment_117804827

You really have to think what the loop hole will be, perhaps all vacant property, other than ones owned by REIT ? 🤔

mcsean2163

https://www.boards.ie/discussion/comment/117803728#Comment_117803728

In Iraq, waste water plant has to be 3km from residential houses. Houses do not need to be 3km from each other 🤗

Is there any similar rule in EU, i.e. 300m etc?

Underground

The association of auctioneers / valuers earlier in the week and today the CEO of Glenveagh calling for a loosening of the LTI limit rule. Quelle surprise, turkeys vote unanimously that Christmas should be cancelled.

Why are these self serving c*nts allowed to spew this sh*te unchallenged?

MacronvFrugals

https://www.boards.ie/discussion/comment/117809392#Comment_117809392

The countries run by lobbyists is it any surprise, in saying that it would be shocking if Makhlouf went ahead with this knowing it would overheat the market further.

L1011

https://www.boards.ie/discussion/comment/117808801#Comment_117808801

You miss my point. There would be nowhere to put the waste water plant anywhere near where it is needed. We have massively dispersed one-off housing; Iraq has deserts directly outside cities.

There is no equivalent rule here. There is housing maybe 50m from the perimeter of Leixlip WWTP.

Balluba

Justin Trudeau has promised to put a 2 year ban on foreign investors buying property in Canada if he is re-elected in an effort to solve the affordability issue there.

Another Canadian party has promised a 20% tax on foreign investors in property.

I wonder if a similar approach would work here?

mcsean2163

https://www.boards.ie/discussion/comment/117813247#Comment_117813247

I didn't miss your point but rather tried to politely point out the logic deficit.

The answer appears to be zero regulations as you state. Truly appalling given the poor health outcomes experienced by those in close proximity as per the study I previously referenced.

mcsean2163

Property fy sale in Ireland - 12062 Results

Interesting, supply back above 12k and this is the wrong time of year to sell given x4.5 exemptions are likely used up

L1011

https://www.boards.ie/discussion/comment/117816929#Comment_117816929

There is absolutely no logic deficit. To find somewhere with no houses for 3km around it to handle Dublins sewage would basically be impossible

MacronvFrugals

If we're talking optics this looks absolutely shocking!

Investors lease former social housing properties back to state

"Large institutional investors have started to lease former social housing properties, originally built by the state, back to the state for use as social housing under lengthy lease arrangements.

The Business Post has learned that second-hand homes in old council estates are now being rented to South Dublin County Council at an estimated rent of €1,500 a month, with no option for purchase at the end of the 25-year lease."

https://www.businesspost.ie/houses/investors-lease-former-social-housing-properties-back-to-state-87f002d5