Builders say apartment construction is basically non-viable without funds involved

According to an article "Builders say apartment construction is basically non-viable without funds involved".

How can this be tackled considering the huge number of people in Dublin paying between €15,000 and €20,000 a year in rent when the mortgage on the same apartment would be less and who would gladly be paying a mortgage instead of rent?

*

https://www.irishtimes.com/news/ireland/irish-news/housing-plan-q-a-will-new-reforms-help-the-current-crisis-1.4569442

JimmyVik

All the people who were anti-apartment over the years, especially myself, need to think about buying even a 1 bed apartment at this rate to get out of the rent trap.
In another couple of years all you will be able to afford is a co-living apartment. And a few more years after that and you are doomed to rent forever because you wont even be able to buy a co-living space.
Next comes inter-generational mortgages.
Yes, it really is looking that bleak.

antoinolachtnai

Solution to this is simple. Government agrees to buy these apartments if other suitable buyers can’t be found.

antoinolachtnai

antoinolachtnai wrote: »

Solution to this is simple. Government agrees to buy these apartments if other suitable buyers can’t be found.

Builders would absolutely gouge the government and by extension us taxpayers on the price. It is a disaster whenever the government gets involved in construction projects as everything automatically doubles or triples in price.

JimmyVik

JimmyVik wrote: »

All the people who were anti-apartment over the years, especially myself, need to think about buying even a 1 bed apartment at this rate to get out of the rent trap.
In another couple of years all you will be able to afford is a co-living apartment. And a few more years after that and you are doomed to rent forever because you wont even be able to buy a co-living space.
Next comes inter-generational mortgages.
Yes, it really is looking that bleak.

100% agree. I was very anti buying an apartment but at the moment I am throwing away a huge amount of money each year in rent which is stopping me from saving for a deposit. Myself and my girlfriend are paying just under €20,000 per year in rent for a 2 bed apartment on the northside of Dublin!

is_that_so

Isn't there still a requirement to give over a complete floor to car parking in a block? Most of the construction claims seem to be about levies.

antodeco

I'm paying close to €24k a year for a 2 bedroom apartment on my own. I need the second bedroom for my kids when they're here. It's horrible as I could get a decent mortgage with ownership of a home, for less than my rent, but banks say I can't pay a mortgage as I don't have enough saved (due to rent!)

Murph85

Their claim could stack up. The government are creaking.g off 50k in vat on a 450k ish apartment ket them cut the vat...

Iguarantee

whatnow! wrote: »

100% agree. I was very anti buying an apartment but at the moment I am throwing away a huge amount of money each year in rent which is stopping me from saving for a deposit. Myself and my girlfriend are paying just under €20,000 per year in rent for a 2 bed apartment on the northside of Dublin!

My view on renting, and in particular the scenario you’ve described yourself in, is that the €20k pa is the price you pay for the lifestyle you want to live (or are living whether you want it or not).

If you want to live in the capital city then rent will be more. The closer you get to the nucleus the more expensive it’ll be.

I wanted a house in area X, I couldn’t afford it so I bought a house in area Y, was lucky enough to get a job that was right beside Y. I previously worked abroad, taking circa. 100 airline flights a year, 3 to 4 hour commute each day etc etc.

Perhaps I’m fortunate that I have in demand professional skills that offer some degree of flexibility but if I was living in Dublin and had had enough of the rent/location/setup then I’d make a plan and get the hell out of there.

I bought a house about 18 months ago. The prices in general were very high i.e. I didn’t see the value I’d get matching the price they charged. I saw new build 4-bed detached houses for nearly €800k in Cork city about 18 months ago. Lunacy! People are paying these prices so that’s what the houses are worth. When people stop paying them then people will stop charging them.

I can empathise with your situation. I wish you luck.

antoinolachtnai

whatnow! wrote: »

Builders would absolutely gouge the government and by extension us taxpayers on the price. It is a disaster whenever the government gets involved in construction projects as everything automatically doubles or triples in price.

You’re highlighting problems but not coming up with any resolutions!

The government isn’t buying the apartment. The punter is. The government is giving a ‘put option’ at a price that punters can afford. The price is fixed at the outset. It is up to the debeloper’s financiers to make sure the property is built to spec in order for the option to be available.

This is a minimalist intervention for the government. The alternative is that the government builds directly.

JimmyVik

whatnow! wrote: »

100% agree. I was very anti buying an apartment but at the moment I am throwing away a huge amount of money each year in rent which is stopping me from saving for a deposit. Myself and my girlfriend are paying just under €20,000 per year in rent for a 2 bed apartment on the northside of Dublin!

Imagine if we had all bought 1 bed apartments a few years ago, how much (the difference between rent and the interest on the mortgage) we could be putting away each month now towards a bigger house down the line.
Instead we would rather not buy the apartment and keep paying rent through the nose in the "hope" that some day we could save enough, but sure we are spending the potential savings on rent instead.

JimmyVik

antodeco wrote: »

I'm paying close to €24k a year for a 2 bedroom apartment on my own. I need the second bedroom for my kids when they're here. It's horrible as I could get a decent mortgage with ownership of a home, for less than my rent, but banks say I can't pay a mortgage as I don't have enough saved (due to rent!)

Start by buying a 1 bed apartment. Put a mattress or a sofabed in the living room for the kids when they are over. Save the extra over €1k a month that you are saving in rent. In a few years trade up again.
This needs to be done in steps now. Because waiting doesnt work anymore.

hmmm

The problem for the builders is they need a ton of money upfront to build an apartment block. Building an individual house is not so bad.

The banks aren't going to lend builders 40 million to build apartments. They might lend them 2 million to build a few houses. In the first case, the builder requests 40 million, it's tied up for 2 years, then repaid. In the case of the houses they get 2 million, build 10 houses, and repay it in a few months.

I generally dislike state interference, but in this case I think there is something to be said for the state providing funding as there is a market failure. Unfortunately then you'd hear the opposition going on about the state funding private developers and taking risk won't anyone think of the banking crisis, etc etc etc. I don't know why to be honest a FF/FG government seems to be taking their instructions from SF - get out there and do what they know needs to be done.

selassie

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

FromADistance

hmmm wrote: »

The problem for the builders is they need a ton of money upfront to build an apartment block. Building an individual house is not so bad.

The banks aren't going to lend builders 40 million to build apartments. They might lend them 2 million to build a few houses. In the first case, the builder requests 40 million, it's tied up for 2 years, then repaid. In the case of the houses they get 2 million, build 10 houses, and repay it in a few months.

I generally dislike state interference, but in this case I think there is something to be said for the state providing funding as there is a market failure. Unfortunately then you'd hear the opposition going on about the state funding private developers and taking risk won't anyone think of the banking crisis, etc etc etc. I don't know why to be honest a FF/FG government seems to be taking their instructions from SF - get out there and do what they know needs to be done.

Also add in building regulations like dual aspect apartments which increases costs and limits design & its no wonder we are where we are.

antoinolachtnai

antoinolachtnai wrote: »

You’re highlighting problems but not coming up with any resolutions!

The government isn’t buying the apartment. The punter is. The government is giving a ‘put option’ at a price that punters can afford. The price is fixed at the outset. It is up to the debeloper’s financiers to make sure the property is built to spec in order for the option to be available.

This is a minimalist intervention for the government. The alternative is that the government builds directly.

Give 100% mortgages based on ability to pay a rent that is 80% of the rent that is currently being paid. Retain the income limits. Put a bit extra on the interest rate if it will compensate for the risk. Anything to avoid a situation where someone is paying €20,000 in rent and can't save a deposit as a result when a 100% mortgage would cost 80% of the rent amount. If there is a ready stream of buyers approved by a bank then that bank can lend the money to the developers to build and get paid on both ends.

The problem in 2007/08 was that they were giving mortgages grater than 3.5x income and giving 2 and 3 mortgages to someone on €60k to get the bonuses.

Bring back 100% mortgages but with added restrictions so that things don't go crazy again.

listermint

FromADistance wrote: »

Also add in building regulations like dual aspect apartments which increases costs and limits design & its no wonder we are where we are.

There are rules like this in other countries. We act like it's unique. There are builders in other countries building apartments.

What I will say is builders are a lobby group they have self interest always at the fore front..so any claims they come out with have to be heavily scrutinized.

antoinolachtnai

I fear that this would drive prices up to unsustainable levels without doing much to stimulate supply.

Heraclius

selassie wrote: »

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

This is the question I wish the media would ask more.

FromADistance

whatnow! wrote: »

Give 100% mortgages based on ability to pay a rent that is 80% of the rent that is currently being paid. Retain the income limits. Put a bit extra on the interest rate if it will compensate for the risk. Anything to avoid a situation where someone is paying €20,000 in rent and can't save a deposit as a result when a 100% mortgage would cost 80% of the rent amount. If there is a ready stream of buyers approved by a bank then that bank can lean the money to the developers to build and get paid on both ends.

The problem in 2007/08 was that they were giving mortgages grater than 3.5x income and giving 2 and 3 mortgages to someone on €60k.

Bring back 100% mortgages but with added restrictions so that things don't go crazy again.

Mortgage lending is restrictive enough as it is without adding more barriers. FTB's effectively are already getting 100% finance for new homes. What maybe helpful would be a scheme to help people who want to purchase a secondhand house and who are first time buyers. How in ever what you are suggesting would invariable mean breaking current income multiples. Other costs, such as land, need to be examined. Also the culture of increased costs per property phase needs to be examined - in the Netherlands, the cost of a new house is the same no matter how many phases are in the development. The cost of land is also regulated.

javaboy

JimmyVik wrote: »

Start by buying a 1 bed apartment. Put a mattress or a sofabed in the living room for the kids when they are over. Save the extra over €1k a month that you are saving in rent. In a few years trade up again.
This needs to be done in steps now. Because waiting doesnt work anymore.

Can't speak for antodeco but this may not be an acceptable option for custody arrangements etc.

FromADistance

FromADistance wrote: »

Mortgage lending is restrictive enough as it is without adding more barriers. FTB's effectively are already getting 100% finance for new homes. What maybe helpful would be a scheme to help people who want to purchase a secondhand house and who are first time buyers. How in ever what you are suggesting would invariable mean breaking current income multiples. Other costs, such as land, need to be examined. Also the culture of increased costs per property phase needs to be examined - in the Netherlands, the cost of a new house is the same no matter how many phases are in the development. The cost of land is also regulated.

I think that mortgage lending is quite restrictive but with good reason.

A mortgage should not be a noose around the neck of someone for 25-30 years where they (a couple) are constantly struggling to meet the monthly payment for a 3 bed semi when they work full time and have skilled jobs because they had to borrow 6x their income to get a home.

The cost needs to be tackled from every angle but renters also need a place to live.

I don't have the answers but the current situation has to change and I'm not seeing anything from our government that will make a noticeable difference.

paul71

listermint wrote: »

There are rules like this in other countries. We act like it's unique. There are builders in other countries building apartments.

What I will say is builders are a lobby group they have self interest always at the fore front..so any claims they come out with have to be heavily scrutinized.

Quick google found me a nice new 1500 sq meter for 250k in Berlin. We must have very expensive concrete here.

jimmycrackcorm

selassie wrote: »

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

Because banks in other countries don't have the disastrous history the Irish banks have from the boom, don't have the heavy capital reserve requirements, and actually can repossess properties without significant legal costs taking years.

There's a reason banks are pulling out of Ireland and not those other countries.

Other factors - Irish people prefer semi-d's; Apartment blocks here always seem to get objections that lead to lower density and have planning restrictions.

Browney7

hmmm wrote: »

The problem for the builders is they need a ton of money upfront to build an apartment block. Building an individual house is not so bad.

The banks aren't going to lend builders 40 million to build apartments. They might lend them 2 million to build a few houses. In the first case, the builder requests 40 million, it's tied up for 2 years, then repaid. In the case of the houses they get 2 million, build 10 houses, and repay it in a few months.

I generally dislike state interference, but in this case I think there is something to be said for the state providing funding as there is a market failure. Unfortunately then you'd hear the opposition going on about the state funding private developers and taking risk won't anyone think of the banking crisis, etc etc etc. I don't know why to be honest a FF/FG government seems to be taking their instructions from SF - get out there and do what they know needs to be done.

They're already doing this and leasing it back off the developer once finished. ISIF backed Activate Capital which backed Bartra which rented to DCC http://www.activatecapital.ie/backing-enhanced-lease-social-housing/

c.p.w.g.w

paul71 wrote: »

Quick google found me a nice new 1500 sq meter for 250k in Berlin. We must have very expensive concrete here.

Apartment or house

paul71

c.p.w.g.w wrote: »

Apartment or house

Apartment.

Fred Cryton

JimmyVik wrote: »

All the people who were anti-apartment over the years, especially myself, need to think about buying even a 1 bed apartment at this rate to get out of the rent trap.
In another couple of years all you will be able to afford is a co-living apartment. And a few more years after that and you are doomed to rent forever because you wont even be able to buy a co-living space.
Next comes inter-generational mortgages.
Yes, it really is looking that bleak.

Or you could just move out of Dublin. That's how most people in most countries cope with things, they react to the market and change their circumstances.

Fred Cryton

selassie wrote: »

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

Other countries have a functional banking system, where if people don't pay their mortgage the bank can take back possession of home. This allows banks to lend much more freely and you don't have the reliance on funds for finance.



Ireland has a dysfunctional banking system due to lefty populist rhetoric which says basically the bank can never get their asset back.



Now those same people are voting even more left. They'll never learn, they're only hurting themselves.

Outkast_IRE

The quantity surveyors report published earlier this year on apartments was quite telling. It is currently costing over 300k to build a 2 bed apartment in Dublin and similar in many other areas. If it's costing them that much to build it then the rents need to be maintained at current levels to make it viable . This is where it gets dangerous as it's now in the REITs interest to buy everything in sight and maintain current prices or higher or they will fail.

A quick Google or search on the chartered quantity surveyors website will find the report for you.

selassie

selassie wrote: »

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

Who knows lower cost base, functional banking system, lower standards etc.


Building lobby is only out for itself like the rest of us, but when an industry completely controlled by the government grinds to a halt then I think we need to look at it more closely.


But all we get now are builders saying it can't be done and no one knows enough to be able to refute this. Academics and journalists who've never built anything have failed us for some reason in unraveling this conundrum.

hmmm

Deleted User wrote: »

But all we get now are builders saying it can't be done and no one knows enough to be able to refute this. Academics and journalists who've never built anything have failed us for some reason in unraveling this conundrum.

There seems to be straitjackets every way the developer moves. Too many requirements, too much change in regulations.

If it was me I'd remove all requirements except basic safety/fire requirements. I lived in a dark 50 square metres apartment when I first left home and loved it - I hated the idea of sharing a house. If developers want to build blocks with people packed in let them, and people will decide if they want to rent/buy them or not.

The quality might not be great at first for those who want bigger apartments, but over time as the supply problem is solved things will improve and the developers will be forced to build to meet market requirements. If we keep insisting that every apartment has to be suitable for a family and their pony we'll be forever wondering why none are being built.

Pete_Cavan

selassie wrote: »

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

The standard in many developed world cities is for people to rent long term, even for ever. The obsession with owning property which exists here is not universal. In mature rental markets, most of the apartments are owned by large institutions the likes of which are now buying up whole developments here. These institutions either directly fund the construction themselves or buy from a developer who started the project using other sources of funding.

The situation in Ireland is actually moving towards what is the norm elsewhere. We have still retained aspects of our previous system which are not replicated elsewhere. Our standard 12 month leases need to be replaced with rolling contracts with specified break conditions. This gives the tenant more security that they won't just be turfed out, and also sets the rent at a level and doesn't get renegotiated each year. It is also better for the landlord to ensure continuity of lets, instead having a big turnover of tenants which results in one or more month of lost rent and potentially other costs too (letting, cleaning, etc.). The effective rent roll is less than the total monthly rent x 12 because of lost months and associated costs. Tenants in Ireland pay more each month to cover these costs.

In many places, apartments are let unfurnished and the tenant brings their own furniture, household items, etc. Standard elsewhereis for there to be shared clothes washing/drying facilities and tenants can buy their own if they want. Fitting out hundreds of apartments upfront is an additional cost here, plus then there is ongoing maintenance, replacement, etc. costs. It all gets passed onto the tenant here, and usually the quality is below the price being paid. Other countries have strong second hand furniture markets where people can get items at a good price if they don't want to buy new so can work to their own budget.

Basically, Ireland has adopted some but not all of the system which operates in other countries thus creating a hybrid system which the market has to adapt to while retaining many of our legacy issues.

Markcheese

Fred Cryton wrote: »

Ireland has a dysfunctional banking system due to lefty populist rhetoric which says basically the bank can never get their asset back.

Now those same people are voting even more left. They'll never learn, they're only hurting themselves.

But it's not a populist left that's doing that -
It's the judiciary - and the interpretation of our legal system ...

Browney7

Pete_Cavan wrote: »

The standard in many developed world cities is for people to rent long term, even for ever. The obsession with owning property which exists here is not universal. In mature rental markets, most of the apartments are owned by large institutions the likes of which are now buying up whole developments here. These institutions either directly fund the construction themselves or buy from a developer who started the project using other sources of funding.

The situation in Ireland is actually moving towards what is the norm elsewhere. We have still retained aspects of our previous system which are not replicated elsewhere. Our standard 12 month leases need to be replaced with rolling contracts with specified break conditions. This gives the tenant more security that they won't just be turfed out, and also sets the rent at a level and doesn't get renegotiated each year. It is also better for the landlord to ensure continuity of lets, instead having a big turnover of tenants which results in one or more month of lost rent and potentially other costs too (letting, cleaning, etc.). The effective rent roll is less than the total monthly rent x 12 because of lost months and associated costs. Tenants in Ireland pay more each month to cover these costs.

In many places, apartments are let unfurnished and the tenant brings their own furniture, household items, etc. Standard elsewhereis for there to be shared clothes washing/drying facilities and tenants can buy their own if they want. Fitting out hundreds of apartments upfront is an additional cost here, plus then there is ongoing maintenance, replacement, etc. costs. It all gets passed onto the tenant here, and usually the quality is below the price being paid. Other countries have strong second hand furniture markets where people can get items at a good price if they don't want to buy new so can work to their own budget.

Basically, Ireland has adopted some but not all of the system which operates in other countries thus creating a hybrid system which the market has to adapt to while retaining many of our legacy issues.

All well and good but you'd need your head examined to pay 2k per month for a 2 bed apartment for the rest of your life considering the equivalent mortgage payment

monkeybutter

Pete_Cavan wrote: »

The standard in many developed world cities is for people to rent long term, even for ever. The obsession with owning property which exists here is not universal. In mature rental markets, most of the apartments are owned by large institutions the likes of which are now buying up whole developments here. These institutions either directly fund the construction themselves or buy from a developer who started the project using other sources of funding.

The situation in Ireland is actually moving towards what is the norm elsewhere. We have still retained aspects of our previous system which are not replicated elsewhere. Our standard 12 month leases need to be replaced with rolling contracts with specified break conditions. This gives the tenant more security that they won't just be turfed out, and also sets the rent at a level and doesn't get renegotiated each year. It is also better for the landlord to ensure continuity of lets, instead having a big turnover of tenants which results in one or more month of lost rent and potentially other costs too (letting, cleaning, etc.). The effective rent roll is less than the total monthly rent x 12 because of lost months and associated costs. Tenants in Ireland pay more each month to cover these costs.

In many places, apartments are let unfurnished and the tenant brings their own furniture, household items, etc. Standard elsewhereis for there to be shared clothes washing/drying facilities and tenants can buy their own if they want. Fitting out hundreds of apartments upfront is an additional cost here, plus then there is ongoing maintenance, replacement, etc. costs. It all gets passed onto the tenant here, and usually the quality is below the price being paid. Other countries have strong second hand furniture markets where people can get items at a good price if they don't want to buy new so can work to their own budget.

Basically, Ireland has adopted some but not all of the system which operates in other countries thus creating a hybrid system which the market has to adapt to while retaining many of our legacy issues.

None of that matters

It's all down to supply, rents are high because of it

With supply why would you turf people out if others aren't clammering to replace them

Someone mentioned Berlin, they had massive over supply of apartments and it was dirt cheap, as this has balanced out the price has gone up

People need to be realistic though

If you wait untill you have kids to buy when you need to rent a house to accom them you have missed the boat

You need to save from when you start working for this, you are competing with those who have or who have parents giving them a deposit

In the 1980s there were no jobs so massive immigration, worse than today, 25% deposits, massive interest rates

In 2000s the price of houses was higher than it is now 20 years later and you had negative equity to look forward to for the next 20 years

Worse than today too

1990s was the sweet spot if you were lucky to be the right age, but not normality

You just need to cut your cloth, if you can only afford to live in finglas, that's where you live

People laughed at the thought of the property ladder but this is it, people weren't doing it as a joke

0lddog

antodeco wrote: »

I'm paying close to €24k a year for a 2 bedroom apartment on my own. I need the second bedroom for my kids when they're here. It's horrible as I could get a decent mortgage with ownership of a home, for less than my rent, but banks say I can't pay a mortgage as I don't have enough saved (due to rent!)

Crazy situation

Example of what you could have if you could remote work......


600/month for a 3 bed in a not bad area of the main business town in Tenerife.

https://www.fotocasa.es/es/alquiler/vivienda/santa-cruz-de-tenerife-capital/ascensor-amueblado/160099263/d?tti=3&xtor=EPR-482-[24x7_realtime]-20210519-[cardLink]-1@1

whisky_galore

jimmycrackcorm wrote: »

Other factors - Irish people prefer semi-d's; Apartment blocks here always seem to get objections that lead to lower density and have planning restrictions.

Irish people want the bitta land for the trampoline and labrador.
Add to that bad experiences with shoddy Paddy-built apartments with only transient tenantry in mind.

Marcusm

selassie wrote: »

how do builders in other countries finance apartments? Why isn't it semi D land in every other capital city too if apartments aren't viable.

In the U.K., major apartment developments are financed by presenting huge numbers in Asia (HK, Sing principally) which effectively guarantees the Fiance needed to be raised. Hear apartments are then either flipped for profit at completion (as often happened in Ireland in the past) or are left empty post completion. Neither is a particular solution, especially given that Ireland would not have the same attraction.

Pete_Cavan

monkeybutter wrote: »

None of that matters

It's all down to supply, rents are high because of it

Part of the supply issue is the high cost of providing apartments. The reason supply is not catching up with demand is the high costs of owning apartments. This is not simply the cost of building the block now, its also the cost of owning, maintaining and managing the building and just about everything inside it for the next 30+ years.

The construction element is usually straightforward as the institution buys from a developer at a set price so once bought, that's that. In Ireland, the institution then needs to furnish every unit, maintain all of, eventually write it all off and then replace it all. That's an immediate extra cost passed on to Irish tenants who have no control over whether the quality matches the cost they have to pay.

That's just an example of how the institutional ownership model is being implemented differently in Ireland, therefore Ireland can't expect the same results as elsewhere. High turnover of tenancies is another, Irish tenants will have to pay the high rate of turnover (likely to pay the actual cost and then some) which is not the case in other countries. My point is we can't expect similar results to other countries when we are doing things differently.

FromADistance

Pete_Cavan wrote: »

Part of the supply issue is the high cost of providing apartments. The reason supply is not catching up with demand is the high costs of owning apartments. This is not simply the cost of building the block now, its also the cost of owning, maintaining and managing the building and just about everything inside it for the next 30+ years.

The construction element is usually straightforward as the institution buys from a developer at a set price so once bought, that's that. In Ireland, the institution then needs to furnish every unit, maintain all of, eventually write it all off and then replace it all. That's an immediate extra cost passed on to Irish tenants who have no control over whether the quality matches the cost they have to pay.

That's just an example of how the institutional ownership model is being implemented differently in Ireland, therefore Ireland can't expect the same results as elsewhere. High turnover of tenancies is another, Irish tenants will have to pay the high rate of turnover (likely to pay the actual cost and then some) which is not the case in other countries. My point is we can't expect similar results to other countries when we are doing things differently.

The high cost of apartments (& any type of housing) is determined by the cost of the inputs that make up that cost. I have already given the example, elsewhere on Boards, where the cost of land is overly inflated by the approval of planning permission for residential housing on agriculture land (in the example I discussed the cost increased by 400%). There is no appetite to tackle the high cost of land in this country.

There's also no appetite to regulate the cost of new builds on a phase by phase basis... in the Netherlands the cost per phase is exactly the same. I live in an estate where the cost of a 3 bed has increased from 300k to c385k over the course of 4 years (and for smaller houses at that). Tackle those issues and there maybe a chance of tackling the housing crisis in this country.

Geuze

FromADistance wrote: »

The high cost of apartments (& any type of housing) is determined by the cost of the inputs that make up that cost. I have already given the example, elsewhere on Boards, where the cost of land is overly inflated by the approval of planning permission for residential housing on agriculture land (in the example I discussed the cost increased by 400%). There is no appetite to tackle the high cost of land in this country.

+1000%%%%

Geuze

Geuze wrote: »

+1000%%%%

How are they supposed to tackle the price of a privately owned commodity?

antoinolachtnai

Dav010 wrote: »

How are they supposed to tackle the price of a privately owned commodity?

You could tackle it by strategically releasing state land.

But this is not something that can be done quickly. You have to plan five years ahead. If you can’t wait five years, then you need some other approach.

antoinolachtnai

antoinolachtnai wrote: »

You could tackle it by strategically releasing state land.

But this is not something that can be done quickly. You have to plan five years ahead. If you can’t wait five years, then you need some other approach.

It isn’t as simple as releasing state land. The sites would be subject to the same planning laws as everyone else and the market will set the price unless the Government developes the land, which they won’t. When the houses are built, there is no guarantee that developers will not strive to maximise profits by selling at the current market rate.

Land, though important, is only one part of many which contribute to property prices.

Yellow_Fern

New apartments in Germany cities tend to be rentals. The ones that are sold, tend to pricey. The difference is they have a vast stock of old apartments with their prices kept low by rent controls, and they also have a much slower growing population.

HBC08

JimmyVik wrote: »

All the people who were anti-apartment over the years, especially myself, need to think about buying even a 1 bed apartment at this rate to get out of the rent trap.
In another couple of years all you will be able to afford is a co-living apartment. And a few more years after that and you are doomed to rent forever because you wont even be able to buy a co-living space.
Next comes inter-generational mortgages.
Yes, it really is looking that bleak.

I don't necessarily disagree with you but doesn't that all sound a bit like the "you need to get on the property ladder" speil that was being bandied about 20 years ago.

Geuze

Dav010 wrote: »

How are they supposed to tackle the price of a privately owned commodity?

One solution: only rezone land from agri to residential after it is in public ownership.

(this won't really help in city centres)

Geuze

Geuze wrote: »

One solution: only rezone land from agri to residential after it is in public ownership.

(this won't really help in city centres)

But the Government will not enter into large scale development, and even if they did, it would be private contractors doing the building which would drive costs up ala the children’s hospital/schools/roads leading to high unit prices, or huge loses to the exchequer.

If you sell public lands to private developers, they still need planning, same as everyone else, and no developer will speculate on large scale construction if the selling price of houses is capped at the end, so if public land is sold for private development, the market will set the price for the house, and given demand, that will be high. Furthermore, if prices fall due to over supply, developers will not build if profit drops or there is a risk that they will be left with large numbers of unsold units.

As I said, land price is only one of many considerations in cost/price of new residential property and even if a developer buys site low, there is unlikely to be anything to stop the units from being sold high if there is demand.

Wanderer78

Dav010 wrote:

If you sell public lands to private developers, they still need planning, same as everyone else, and no developer will speculate on large scale construction if the selling price of houses is capped at the end, so if public land is sold for private development, the market will set the price for the house, and given demand, that will be high.

Maintaining the land in public ownership may reduce speculation of that land, if a price is agreed between the state and private developers, it should be adhered to, the hospital is obviously a scam, you can be damn sure many knew it was never gonna be done at the price agreed. By not building, it's already costing us, so we better get cracking.....

Wanderer78

Wanderer78 wrote: »

Maintaining the land in public ownership may reduce speculation of that land, if a price is agreed between the state and private developers, it should be adhered to, the hospital is obviously a scam, you can be damn sure many knew it was never gonna be done at the price agreed. By not building, it's already costing us, so we better get cracking.....

Should, but will not. Building materials costs have increased 30% this year. No developer will agree a contract without contingency for increases in costs.