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

Villa05

https://www.boards.ie/discussion/comment/122167197#Comment_122167197

https://www.boards.ie/discussion/comment/122167291#Comment_122167291

So builders have no access to finance and the State has so much they decided to broadcast to the world they were setting up a sovereign wealth fund

Some solutions

Private market

State provide a guarantee they would buy unsold units at a pre determined price a little under market rates, sure beats paying half a million for 1 bed units in Limericks most expensive area

Social and affordable

Fund the developments and reap the gains of developer margin removal, significant difference in cost of finance, removal of risk premium. Looking at a 25 to 30% saving on those 3 alone. Add in the potential of the state building on own land and you have significant savings on the private market price

State saves on current spending policies while likely generating significant income from rental income to allow further investment

spillit67

https://www.boards.ie/discussion/comment/122168998#Comment_122168998

Sorry but I never said it was all fine.

I said we had a six figure shortage.

Please actually debate the points, don’t misrepresent what is said.

The “youngest population” stuff is all about the household size stuff.

As I said, I expect this to fall, but just not to Scandinavian levels.

We cannot ignore that the housing stock in Ireland is significantly larger in unit size than the rest of Europe.

The average Irish housing unit consists of 5.5 rooms, while the EU average is 3.7 rooms.

My contention is that we end up at OECD averages rather than distorted EU ones. That’s it.

spillit67

https://www.boards.ie/discussion/comment/122168999#Comment_122168999

More made up twaddle.

What is it with people unable to actually debate and bringing in emotional gibberish to the fray? I’m a renter myself looking to buy, so get off the stage with this BS.

A 100,000 unit shortfall is not “fine”. It is an extraordinary deficit built on years of under supply.

I didn’t say I knew better, I said I disagree with some members and their assumptions. Forecasting is extremely difficult to do, as proven by the consistent underestimates by the ESRI of our population growth for 30 years.

I think it should be noted that one of the outcomes of the report is that we spend the most in Europe but need to improve outcomes. My assessment is that we need to ensure a consistent supply of social and affordable housing along with reducing costs where we can to make it more desirable. The market then must be allowed to “work”. This makes all of our estimates moot as it can respond to peaks and troughs in demand. Personally I think if we had 100,000 extra units now along with our current output that we’d have a far more normalised market. That doesn’t mean every young adult rents a studio, that’s a policy and culture point that we need to grapple with.

Timing belt

https://www.boards.ie/discussion/comment/122169234#Comment_122169234

builders do have access to finance just not small builders (who even if they did are unlikely to take on the risk)

Plus what you are suggesting is happening at present via housing bodies. Could more of this be done yes probably but it’s painfully slow and inefficient with projects constantly stopping and starting. It’s a similar mentality to the trade unions in the 70’s.

PommieBast

https://www.boards.ie/discussion/comment/122168342#Comment_122168342

AirBNB is already de-facto illegal so don't see any scope for much more stick. As for the carrot that was compost long ago.

SharkMX

Its optional to pay your rent in Ireland.

Even the state cant get the rent for the homes it provides. Its just sinking money into a black hole.

Id like to know how the housing charities are doing collecting their rent too.

danfrancisco83

https://www.boards.ie/discussion/comment/122169383#Comment_122169383

"Id like to know how the housing charities are doing collecting their rent too."

That's the bit I don't understand also. If the councils failed at collecting rent, how are charities going to be any different? Is it somehow a different model?

timmyntc

https://www.boards.ie/discussion/comment/122170186#Comment_122170186

Housing "charities" can access private market financing, that's the difference.

They can get loans and use the houses in their portfolio as collateral, councils I believe cannot do this.

Much of housing charities day to day cashflow is provided by the state though iirc

danfrancisco83

https://www.boards.ie/discussion/comment/122170354#Comment_122170354

Thanks. So if they have non-paying tenants, they just hit up the government for more money I presume. In that case, wouldn't there be even less incentive to pay rent if you were a tenant of a housing charity? They're not going to inititiate expensive legal proceedings that could last years, when they can just poor mouth the government for more money.

Or am I wrong?

hometruths

https://www.boards.ie/discussion/comment/122169328#Comment_122169328

you are saying we have a 100,000 shortfall in housing stock right now.

Fair play. I wish more people would attempt to estimate the current deficit.

No shortage of people making confident assertions on how short we might be in the future based on assumption about housing size and migration etc.

But astonishingly nobody is prepared to state what they think the current shortfall is right now.

Bass Reeves

https://www.boards.ie/discussion/comment/122168942#Comment_122168942

I have explained to how as the religious orders exited tge education sector ( you can add health provision as well) that cost within the sector exploded. You choose to ignore these facts.

Since 1970 education costs have increased from 107 million to virtually 10 billion while general inflation only catered for 1.5 billion of it.

Now as I already explained RS and RAS are specific payment that exist as they are emergency rental payments. RS is for those already in rental accommodation who for circumstances beyond there control fall.on hard times, example a person who gets seriously ill with something like cancer, a mental health issue and needs support with there rent for in the short term. Social housing is not a necessity for them as its a short term issue. Social housing will not be applicable to situations like this.

RAS is a scheme where LA contract accommodation for specific medium term rental support. For instant those on RS can move onto RAS, (example long term illness, moment that have left abusive and violent relationships), I think some Ukranians and other refugees are also accomodated under it.

You heaped both these schemes in with HAP and only now are starting to see the difference. HAP itself which I am defending is a very cheap scheme for the government. It is costing about 9k per tenancy and there are about 65k tenancies. Other schemes have nothing to do with it

timmyntc

https://www.boards.ie/discussion/comment/122170509#Comment_122170509

But astonishingly nobody is prepared to state what they think the current shortfall is right now.

The housing commission report literally does state this, it's in the order of 250k units

You've been singing this time for a while now in this thread about how nobody has put a figure on pent up demand, and implying there really isn't a housing shortage at all.

Well now there is a figure, put together by an expert panel. Now what?

Villa05

https://www.boards.ie/discussion/comment/122169357#Comment_122169357

From the report, the government appears to be the problen

In the area of social housing, it recommends that the Department of Housing urgently reform current procedures to remove barriers to delivering social housing.

This includes making funding approval and procurement procedures easier

They appear to be calling for a push away from rural McMansions to more centralised town and village developments

It also calls for reform of the planning system to provide clear, consistent and equitable protocols for sustainable rural housing

A familiar complaint from our FFG governmet(s)

It also finds that "Ireland has, by comparison with our European partners, one of the highest levels of public expenditure for housing, yet one of the poorest outcomes".

Impressive array of contributers to this report including property developer Michael O Flynn and Ronan Lyons of Daft. Maybe if government moved from industry lobbyists and implemented the recommendations in this report we might have far better outcomes

It believes that while specific details in relation to housing delivery can be "complex, the overall strategy to successfully achieve a sustainable housing system is not complicated".

Hope it did not cost too much as many of the recommendations have been suggested here

https://www.rte.ie/news/ireland/2024/0521/1450318-housing-commission/

spillit67

https://www.boards.ie/discussion/comment/122170509#Comment_122170509

I think longer term we will move towards 2.4. The HC reports suggests 2 as a possibility by 2050. I don’t see that happening unless we see a fundamental change in approach to going to third level in Ireland and a change in attitude to studio apartments.

Having read the HC report, I have criticisms of their assessment on household size.

They use blunt numbers and assumptions, one of which is the flawed E.U. SILC survey on young people staying at home rather than the more important CSO data. They don’t take account that our housing stock on average is significantly larger than the E.U. average.

So as a result of that, we largely meet in the middle in the terms of our estimates of deficits.

For me deficit is about having stable liquidity of supply and pricing ranges of 25% to 35% of net household income going on housing.

I have a long term issue with how Lyons runs some of his numbers, including his quarterly Daft reports. This dates back to the Celtic Tiger. I think he is often simplistic, although I also think he gets things right at a high level.

Even last year he was wildly off on his estimates of house completions for 2023, to the order of underestimating them by 11,000!

These numbers absolutely come from him. Varadkar quoted the 250,000 deficit number a couple of years ago. It’s a Lyons number.

I’ll be frank, anyone who hangs themselves on that number is going to crucify themselves. There is absolutely no way that level of deficit is ever getting bridged unless we completely liberalise planning and regulations. Or if the State decides to pump 50% of spending into housing per annum.

spillit67

https://www.boards.ie/discussion/comment/122173140#Comment_122173140

Are you trying to be ironic here talking about lobbyists and mentioning Lyons/O’Flynn?

hometruths

https://www.boards.ie/discussion/comment/122172577#Comment_122172577

Now what indeed. It's great to see that the Housing Commission have put a figure on the current deficit:

as of April 2022, the best estimate of Ireland’s housing deficit was between 212,500 and 256,000 homes. For the
remainder of this section, we take the (rounded) mid-point of this range, a deficit of 235,000 dwellings.

The reason they say "as of April 2022" is because that was when the most recent census was taken - so their estimate is based on a precise moment in time, allowing for the fact it may have changed since then, due to movements in population and housing stock.

So they're to calculate the housing deficit in April 2022, a point in time when they had an accurate figure of a) population, b) habitable housing stock and c) average household size.

Obviously from these figures anybody can calculate what the total housing capacity of the country is at that point in time, and use that figure as your starting reference point to calculate deficit, or indeed surplus.

But surprisingly none of the many experts on the housing commission thought to use these three figures to calculate the deficit.

Instead predictably enough they preferred to focus on assumptions based on various long term trends eg population growth, household size, fertility, life expectancy etc.

I suspect the reason is that it is much to harder, if not impossible, to spin the figures we know are accurate into showing a housing shortage of crisis proportions.

Much easier to do that using assumptions. Very difficult to challenge assumptions in the same way as hard figures.

https://www.gov.ie/en/publication/f3551-report-of-the-housing-commission/

hometruths

https://www.boards.ie/discussion/comment/122173292#Comment_122173292

They use blunt numbers and assumptions, one of which is the flawed E.U. SILC survey on young people staying at home rather than the more important CSO data. They don’t take account that our housing stock on average is significantly larger than the E.U. average.

This is it exactly. The composition of our housing stock is the biggest driver of the larger household size. It is the most logical explanation, yet none of the experts ever mention it. Sure they cite European trends and say we will be heading in the same direction, but the only way that is going to happen is if we prioritise building 1 and 2 bed apartments.

In fairness Lyons he was mentioning this a few years ago, that any deficit we had was a deficit in the type of housing units rather than the number - i.e a deficit of apartments and a surplus of 3+ bed houses. But he seems to have gone quiet on this.

The problem is, those people (voters) crying out loudest for new supply, want to buy 3 bed houses not 1 or 2 bed apartments. There is no way the government will say we're going to incentivise apartment building over house building, which is exactly what's needed.

As ever it is a political problem rather than a structural housing problem.

timmyntc

https://www.boards.ie/discussion/comment/122173347#Comment_122173347

So you agree on the 235k deficit from housing commission then, at least you do for April 22 and not after that. Ok.

Tell me then, why is it that prices have risen since April 22 in spite of our building approx 30k new builds per annum. That to me suggests the deficit has remaining static if not increased.

It certainly doesn't lend itself to the idea that we no longer have a sizeable deficit. Easily in excess of 220k still at this point. And the population continues to grow

hometruths

https://www.boards.ie/discussion/comment/122173508#Comment_122173508

So you agree on the 235k deficit from housing commission then, at least you do for April 22 and not after that. Ok.

No I don't agree with it. I think any credible calculation of housing deficit in April 22 needs to be based on the known habitable housing stock and known population in April.

In the absence of any good reason not to at least these figures at least as a starting, IMO their estimates are questionable at best.

Of course perhaps there is a good reason not to use the figures we know are accurate in favour of estimates, but I can't think of one. Can you?

Tell me then, why is it that prices have risen since April 22 in spite of our building approx 30k new builds per annum. That to me suggests the deficit has remaining static if not increased.

Because we have a liquidity and turnover problem with our existing housing stock, not a shortage of existing housing stock.

Of course you can make assumptions and estimates that indicate we have a deficit of housing stock, but those assumptions and estimates do not stand up to scrutiny next the facts and figures that we know to be correct - a) current population, b) current housing stock and c) current average household size.

Gary_dunne

https://www.boards.ie/discussion/comment/122173416#Comment_122173416

CSO statistics on construction figures last year. https://constructionnews.ie/ireland-housing-output-2023/#:~:text=However%2C%20the%20Central%20Statistics%20Office,a%20more%20conservative%2029%2C890%20units. Lovely headline for the piece.

The CSO, which uses new connections to the electricity network as the basis for statistics on new dwelling completions, reports that there were 15,505 scheme dwelling completions in 2023 (up 2.4%), 11,642 apartment unit completions (up 28%), and 5,548 single dwellings completions (up 0.9%), resulting in 47.4% of completions being scheme dwellings; 35.6%, apartments; and 17%, single dwellings.

Apartment completions were drastically on the rise up 28% from the previous year and making up just over 1/3 of all completions. I agree that as a % apartment completions need to continue to increase and preferably outstrip scheme dwelling and single dwellings combined.

However it still doesn't mean that we aren't in a sever deficit of available stock, 200k for arguments sake (low end of the report) and therefore need to drastically increase the supply.

Villa05

https://www.boards.ie/discussion/comment/122173292#Comment_122173292

They use blunt numbers and assumptions, one of which is the flawed E.U. SILC survey on young people staying at home rather than the more important CSO data. They don’t take account that our housing stock on average is significantly larger than the E.U. average

Larger homes may have fewer inhabitants

We are subsidising one off McMansions (20%+ of total new housing output) that may only home one or two people, instead for every McMansion we could build 2 3 bed terraced homes in the local village that could home up to 8 people.

Housing supply is driven by young couples at close to max earnings, there is little supply of units for people that wish to downsize thus allowing more efficient housing

There is no deterent to leaving property empty or removing it from the market for which it was granted permission for to stl

Dav010

https://www.boards.ie/discussion/comment/122173642#Comment_122173642

I understand the derogatory term “mcmansion” as applied to owner built, huge houses, but how does it apply to housing developments, and how are they subsidised?

timmyntc

https://www.boards.ie/discussion/comment/122173595#Comment_122173595

No I don't agree with it. I think any credible calculation of housing deficit in April 22 needs to be based on the known habitable housing stock and known population in April.

It is based on census data from last census, April 22. And most accurate information we do have about habitable stock as of that date.

It seems like your complaint is that the housing commission are not omniscient and don't have a figure accurate to the unit of how many houses there are in the country suitable to live in.

Do you have any evidence to support your own thesis that we only have a liquidity issue and not a supply shortage?

hometruths

https://www.boards.ie/discussion/comment/122173607#Comment_122173607

Apartment completions were drastically on the rise up 28% from the previous year and making up just over 1/3 of all completions. I agree that as a % apartment completions need to continue to increase and preferably outstrip scheme dwelling and single dwellings combined.

We're in total agreement on this then. But I think in order for apartment building to increase and surpass house building, the developers will need incentives to prioritise apartments. I cannot see the government saying we want more apartments and less houses and this is how we're going to achieve it. Politically that is a difficult policy, no matter the need for it.

However it still doesn't mean that we aren't in a sever deficit of available stock, 200k for arguments sake (low end of the report) and therefore need to drastically increase the supply.

The data we know to be correct does not support the severe deficit thesis. The idea of a current severe deficit of over 200k+ is only supported by assumptions and estimates.

It is intuitively preferable to rely on the correct data we have. Quite why everyone is so reluctant to do so is a mystery.

AdamD

Apartment completions are good for the rental market, but none of them are going up for sale.

hometruths

https://www.boards.ie/discussion/comment/122173745#Comment_122173745

It is based on census data from last census, April 22. And most accurate information we do have about habitable stock as of that date.

For the purposes of calculating/estimating their 250k deficit they do not take into account the total population nor the total habitable housing stock at April 2022. These are obviously 2 of the 3 most important figures that would influence the calculation of any surplus or deficit.

If I am wrong, by all means correct me and point out the bit that I missed.

It seems like your complaint is that the housing commission are not omniscient and don't have a figure accurate to the unit of how many houses there are in the country suitable to live in.

Quite the opposite. They have this accurate figure. My complaint is simply why do they not use it for the starting point as an illustration of the accurate current surplus or deficit with regard to the known population size, housing stock and average household size.

Do you have any evidence to support your own thesis that we only have a liquidity issue and not a supply shortage?

Yes, plenty. Not least the consistently low turnover rate of the past decade. I've posted this many times on here.

timmyntc

https://www.boards.ie/discussion/comment/122173822#Comment_122173822

The low turnover rate is a symptom of shortage of supply. In any market ever, shortage of supply impacts liquidity/turnover.

Unlike monetary markets, you cannot just use QE for housing

hometruths

https://www.boards.ie/discussion/comment/122173845#Comment_122173845

The low turnover rate is a symptom of shortage of supply. In any market ever, shortage of supply impacts liquidity/turnover.

Which came first, the chicken or the egg?

Turnover collapsed in aftermath of 08 and it has never recovered since to anything approaching long term historical norms. Nobody was complaining a crisis shortage of supply when the turnover rate first collapsed. Quite the opposite in fact.

Problem back then was principally people weren't buying as they couldn't sell, problem now is principally people aren't selling because they cannot buy.

Either way that low turnover rate represents almost 15 years of pent up supply as much as it represents pent up demand.

The market has become increasingly clogged up, and it needs to be unclogged. Building an extra 10k houses a year won't do that.

Unlike monetary markets, you cannot just use QE for housing

Oddly enough, proposing the building 250k houses as quickly as possible to solve a liquidity problem is tantamount to an attempt at QE for housing.

combat14

great news today with ICS mortgages now allowing lending up to 80 - looks like government old age renters problem is set to go away

arctictree

https://www.daft.ie/for-sale/detached-house-57-fairfield-greystones-co-wicklow/5706364

1.275M for a house now in an estate in Greystones. Market has officially gone mad...