Some reasons why houses are more expensive in 2024 than years ago

SharkMX

Over Christmas a friend of my Dads came over and we got to talking about property prices, surprise, surprise.

And it opened my eyes to a few things I hadnt actually thought about.

He is a quantity surveyor in the UK the last 20 years.

He said its much the same over there as it is here. Everything is simply more expensive and the end buyer has to pay for it. When asked how prices to build could be so high he came out with a flood of costs that have changed for the worse in the last years that the person at the end must pay for, and i'll write the ones i can remember down year.

Various environmental charges like carbon taxes, Levies, other taxes.

The workers have to pay these on everything too as well as eat more expensive lunches, more expensive transport and in general make more money now to cover all these costs that their predecessors woudlnt have had.

Then these higher wages, the environmental taxes and costs of various regulations that never existed before go into the cost of the materials. Shipping and transport has gone up significantly.

At the design stage there are regulations now that cost a fortune when they are all designed in.

When it all arrives at the site, all the previous costs plus workers and site costs and connections etc have to be added.

Then taxes upon taxes upon taxes.

Marketing and sales costs are to be added now too.

At the end of the chain is the the poor mug who has to pony up for the money that goes into the pockets of everyone down the line in order that they may live.

Anyway, i couldnt put an amount on it, but hew did make it clear that everything costs money and it travels up to the buyer at the end of the day. If you want nice environmentally friendly houses with the best of regulated materials and building codes, you have to pay for them. Most of these costs wouldnt have been there many years ago and are really only a thing in the last 20 years or so.

SharkMX

Cant edit that post but one of the things also mentioned that we have here too is the allocation of a certain percentage of the properties to councils too.

MrMusician18

Demand. That is the number one reason, and really the only reason why houses are more expensive to buy now.

In absolute terms, more people have more money available which has resulted in prices increasing.

The cost to build too has increased. Houses are harder to construct and have to meet hard to cheaply achieve regulations on insulation and air tightness. Shortcut taking has resulted in increased professional involvement resulting in an administrative overhead that wasn't there previously.

But as I said the main reason that house prices have increased is because people can afford to pay more.

Dav010

More people have more money.

https://m.independent.ie/business/personal-finance/rise-in-100000-earners-is-driving-property-surge/a1743590826.html?gaa_at=la&gaa_n=AZsHK_lMjM3kK1Iq-aRzrtfxocp7N57JdsetQtC6wVfuF-mAP36kgmVpQTGFw_CTs_7_C5_FvjBljXzAZHdQkBmvQDxxh5DV1Q%3D%3D&gaa_sig=Ol01iuFQlVDJzp6sn9zU9tqR6B2-rXbLrp3MjVOornF5iINRC0K3DC0k0aFulbN0FgpLbUifY5u5iM-TsIumYg%3D%3D&gaa_ts=659c0644&utm_campaign=CDAqDwgAKgcICjCx7J8JMMzIbzD7gZcC&utm_content=rundown&utm_medium=gnews&utm_source=newsshowcase

SharkMX

https://www.boards.ie/discussion/comment/121586682#Comment_121586682

I dont think i explained it as well as it was explained to me. The point he was making was that all these extra costs have to be paid for, so dont be surprised at how high build costs have got.

RichardAnd

https://www.boards.ie/discussion/comment/121586682#Comment_121586682

Because there IS more money. What one must understand is how fiat currency works. Currency is not backed by anything, which seems crazy, but it's actually true. When loans are issued, more currency is created. By March 2021, the money printing to fund lockdowns had reached over 5 trillion (that's 5,000,000,000,000) USD. That's more than was printed for WW2 adjusted for inflation. Ireland alone "borrowed" (i.e., created) something close to 50 billion euros, and a lot of that was let loose into the domestic economy.

This is why assets exploded during the lockdowns. Bitcoin reached 55k euro in 2021, soaking up billions in funny-money. Stocks exploded too, so many people cashed out on investments with huge profits. If you have an extra 300k sitting in your bank account, why in god's name would you NOT use it to buy an apartment, second home or whatever. After all, housing is just one more asset to in this infinite growth nightmare.

This, of course, happened at a time when lockdowns were fudging up supply chains the world over. However, as always, the people making these decisions were not affected by them, and in many cases, they probably profited directly from their personal investment. Let the country be run by compradores, and this is what you get...

Iguarantee

I don’t want to oversimplify the issue that there is a shortage of housing in the most populated areas of Ireland, however, I want to highlight that the increase in house prices has NOT been met with an inversely proportional change is people’s expectations RE property type, cost and location.

20 or 25 years ago a €50k salary could likely buy someone a 3-bed semi-detached house that wasn’t on fire, or surrounded by caravans

Thus far, in 2024, a €50k salary can’t buy someone a 1-bed apartment in Cork or Dublin (the most populous cities/towns in Ireland).

Regardless, people complain that it’s financially impossible to buy a house. For some people, that’s very true. However, for others it’s just a case that they have a 10% deposit, a relatively low income and want to buy a €400k+ house down the road from their parents regardless.

The housing crisis has an (missing) element of managing consumer expectations as well as sorting out the supply and demand issues.

ec18

https://www.boards.ie/discussion/comment/121587014#Comment_121587014

the last point is something that is often missing from the current debate. Is that people will have to move to where their budget allows. Renting and than buying in an area that's in high demand just because it's near you parents isn't going to attainable for everyone. Some of that needs to be injected into the debate around housing availability rather than the 'it's just gone mad joe'

rob316

Meeting A rated building standards now is incredibly expensive. The efficiency of a new build now is leagues apart from a house 20 years ago, that has to be paid for.

Iguarantee

https://www.boards.ie/discussion/comment/121587197#Comment_121587197

Indeed.

Complexity costs money.

The level of quality that can be achieved nowadays is very high.

I’m not in the market for a house at present. I bought in 2019 for €180k and signed a 10-year fixed rate mortgage in 2022. My monthly repayments are <€700. The housing market can do whatever it wants for the next 8 years, I’m protected because I bought a house that was both immediately and sustainably affordable.

RichardAnd

https://www.boards.ie/discussion/comment/121587132#Comment_121587132

There are plenty of things left out of the debate in polite circles. Namely, immigration, money-printing and social housing and the state's endless fiddling with laws to drive up prices. Until recently, investment funds weren't spoken about in the mainstream. The only acceptable solutions allowed on places like RTE is "build more" and "more grants".

rob316

https://www.boards.ie/discussion/comment/121587280#Comment_121587280

I'm pretty much in the same boat, but near half a million for a 3 bed semi in Cork city is unreachable for many. The only solution it seems is giving the state equity in your house.

orangerhyme

https://www.boards.ie/discussion/comment/121587132#Comment_121587132

The silver lining of this is that huge areas of Dublin are in the process of gentrification eg Cabra, East Finglas, Crumlin, Drimnagh, East Tallaght, East Ballyfermot, South Clondalkin, East Blanchardstown, Inchicore, Donnycarney etc. Mixed areas make for better neighbourhoods.

thinkabouit

Greed greed & more greed

garnished with government policy’s.

RichardAnd

https://www.boards.ie/discussion/comment/121587383#Comment_121587383

Wow. In fifty years, could we hearing people speak of getting the "dort to Clooondaaaawlkin"

I don't think that there's much silver lining to the housing crisis. It's going to permanently change Ireland, and not for the better IMHO.

fartooreasonable

https://www.boards.ie/discussion/comment/121587197#Comment_121587197

It certainly is impressive but leads to the question that if these requirements drive home ownership out of the affordability for the average buyer is that fair for our society?

whisky_galore

Lots of money; bank of mom and pop and/or high double income couples, chasing too few houses.

Society was never "fair".

Geuze

Here is a breakdown of costs in the GDA in 2023:

Geuze

Here is a more detailed breakdown:

rob316

https://www.boards.ie/discussion/comment/121587465#Comment_121587465

I'd add to that our house building techniques haven't moved on, we are still building brick by brick on site. In this day and age of technology shouldn't we be building houses at a far greater pace?

Buddy Bubs

https://www.boards.ie/discussion/comment/121587925#Comment_121587925

Yeah I often thought a few large precast concrete parts could be constructed in a huge factory and transferred to site and put together much quicker than brick by brick.

Of course it would take someone to build the factory first and then ensure there was always demand, so it's probably just economically unviable rather than technologically unviable.

zg3409

https://www.boards.ie/discussion/comment/121587925#Comment_121587925

Very few real red brick houses are built these days. Brick layers are too expensive. Many houses are timber frame with "fake" brick facade. Land prices are also high in terms of the farmers field is now worth 200,000 per plot that used to have cows or scrub or flooding.

I am all for minimum insulation requirements on new builds as cost of heating homes is only going to rise.

In terms of tackling the issues it's hard because if you help builders they will still try keep prices high to maximise profit. Giving free money to buyers also drives up prices.

fartooreasonable

https://www.boards.ie/discussion/comment/121587925#Comment_121587925

30k or so houses per year it would be more cost effective to partner with a UK based company for it in that case given their population for the economy of scale.

herbalplants

https://www.boards.ie/discussion/comment/121587785#Comment_121587785

Vat should be obsolete and that alone would save the buyer 48k. Why do we have such a high Vat!! Ffs.

Between levies and Vat the guts of 66k. A house could be considerably cheaper for the buyer by 66k if Government is willing to do something!!!

Geuze

Note that you are presuming that if VAT is abolished, the seller will pass that on.

There are loads of cases when that has not happened.

Furze99

https://www.boards.ie/discussion/comment/121587197#Comment_121587197

And why local authorities can't just lash up council houses like they famously did in the 1950s/60s. An oft repeated solution that is just a soundbite.

Padre_Pio

https://www.boards.ie/discussion/comment/121587991#Comment_121587991

Cost of concrete is usually high, which is why timber frame is preferred. Much cheaper for about the same performance.

JohnnyChimpo

https://www.boards.ie/discussion/comment/121587925#Comment_121587925

While I think newer construction elements like SIPs and ICFs are cool and should be implemented for large builds (much like the Corpo used shuttered concrete pours for all the social housing of the 30s-50s), I don't actually see laying block as much of a bottleneck in small-scale residential construction. With newer aerated concrete bricks those lads can fly along. All the brick for my extension was laid by one lad by himself in a day and a half

foxsake

https://www.boards.ie/discussion/comment/121587014#Comment_121587014

You arent wrong?

But Id ask what is wrong with wanting to live in or near your locality?

What type of society do we want when we sneer at this as goal?

As a relatively well of country this shouldn't be a dream but a reality

Its not moral nor practical to say to a young couple in dublin or cork to move to leitrim.

J_1980

https://www.boards.ie/discussion/comment/121591122#Comment_121591122

Location shouldn’t be “inherited” in a meritocratic society. If 1000 people want to live in 100 houses the highest earner gets it. Simple as.

ELM327

https://www.boards.ie/discussion/comment/121591122#Comment_121591122

It may not be practical but sometimes it's what reality dictates. We moved from Dublin to Meath and now to Wexford - with much hesitance. But it was the reality as we couldnt afford what we wanted, where we wanted. I was not prepared to live in a 3 bed semi in clondalkin or something just to live in Dublin. So for less than the price of that, we have a 6 bed house in Wexford.

Others will b1tch and moan about how expensive houses are, while not accepting the reality that is they simply cant afford to live where they want in the house they want and have to pick either house type or location. We picked house type. And we're not on bad money either, household income is comfortably 6 figures.