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.

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.

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.

foxsake

https://www.boards.ie/discussion/comment/121591187#Comment_121591187

we can disagree on that I guess. Well its' not as straightforward as that so we probably agree mostly with qualifiers.

https://www.boards.ie/discussion/comment/121591226#Comment_121591226

I think many young people would take the 3 bed in clondalkin - unless youre on welfare the prices are huge.

and thats fine you made a choice but its not right that you were forced .

The point is sure - you may not have the right to live on your parents road but you shouldnt be forced to move to wexford from dublin either.

our society has failed if that is the case.

ELM327

https://www.boards.ie/discussion/comment/121591252#Comment_121591252

I wasn't forced. I/we had the straight choice of a perfectly serviceable house in many a perfectly serviceable (but "bad") area in Dublin, or a lovely house with some land around in wexford. What I did not have, was the lovely 6 bed house in Dublin. Because they were more expensive, reflective of demand.

I don't see a problem. Sure, some folks would pick the Ballymun, Clondalkin etc house but it wasn't for us. We work from home so the location isnt an issue anyway.

Choice driven by market pricing is not "forced".

Donald Trump

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

Would that mean that there should be a massive discount on a 2-year old house that was never upgraded? Relative to the price of a new build?

ec18

https://www.boards.ie/discussion/comment/121591268#Comment_121591268

no because there isn't enough houses for people to be able to make the choice and the older house usually has other advantages such as larger garden etc. So no the only time there will be a 'discount' massive or otherwise on housing will be if everything goes tits up again

Donald Trump

https://www.boards.ie/discussion/comment/121591319#Comment_121591319

That's the point. People justifying the house prices as being solely, or mainly, due to increases in standards etc are not correct. It will have some impact of course, but not to the extent being presented

ec18

https://www.boards.ie/discussion/comment/121591330#Comment_121591330

The cost to build doesn't have any direct correlation to the price of second hand stock. It's not tvs or phones we're talking about where the older models become heavily discounted. Housing can be both be more expensive to build thus making newer builds more expensive and older houses maintain value. There will always be a level of demand for older houses whether based on area, plot size or any number of other reasons that mean value will be maintained. (if not increase in some areas)

RichardAnd

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

I don't think that this is entirely accurate. New builds are timber frames over which layers of insulation and cladding are placed. I'm not even sure that blocks are used in all builds. There is a new block of apartments under construction up the road from me, and I can't see any brick-work. I could be wrong about that as I'm not a builder. However, if you wanted real red-brick on the outside of your house, you would pay an arm and a leg for it.

Just as a slight tangent, I do genuinely worry about the longevity of timber-frame houses in Ireland. The air here is very, very damp, and wood is traditionally not used overmuch as a building material for this reason. Given that many Celtic Tiger builds are already decaying after just 20 years, I wonder how the current generation of builds will hold up. We'll see, I suppose.

ballyharpat

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

This has been replied to by many others and I agree that we cannot expect to be able to live close to our parents or any other area that we choose. I have no idea how you can see this as plausible. I want to live in Dublin , D6 or whatever are the expensive areas. Why can't I? I can't afford it. No one who's parents or friends live there or grew up there should be entitled to live their either. They can live there. if they can afford it and want to, just like I can, if I can afford it and want to.

In your ideal, everyone that grew up there or has ties, should be able to live there, let's take it on a basic level, let's say all the people that lived there had 3 children, all those children want to live there now, and by your reckoning, that's their right, where do they live? who gets to say which children can live there? Is it no a better system that the ones that can afford to and have a desire to, get to live there?

Padre_Pio

https://www.boards.ie/discussion/comment/121591567#Comment_121591567

Yep, that's just reality. Unless the population density in the area where you grew up has increased, or at least can increase, then chances are you're not going to live in the place you grew up.

Ray Palmer

https://www.boards.ie/discussion/comment/121591713#Comment_121591713

I understand your logic and what you are saying but the opposite is actually true. Houses built 60 odd years ago have much lower occupancy rates now than the did from when they were built. Houses that had families in them are now occupied by single residents or couples as their children or gone and their partners have died. Dublin is circled by housing estates filled with OAPs. The social aspect of Ireland means people don't downsize and retain the family home. On my mother's road taking 10 of her neighbours used to have 60 individuals living in them (including children) now there are 13.

Dublin has an occupancy rate issue for existing stock not a shortage of housing.

ballyharpat

https://www.boards.ie/discussion/comment/121600625#Comment_121600625

That's a fact, but, do you have any solution for this?

orangerhyme

https://www.boards.ie/discussion/comment/121600625#Comment_121600625

I had an idea of incentisizing older people to downsize to one and two bed apartments to free up their houses.

JCN12

I guess when the economy slows again, it will ease the pressure somewhat.

I often wonder do people in Ireland realise the reality of economic cycles, or do they just think previous downturns will not occur again?

RichardAnd

https://www.boards.ie/discussion/comment/121601388#Comment_121601388

Well the way things are going, I wouldn't be surprised to see CPOs places on houses wherein an older person lives alone.

Personally speaking, I think that this could be handled within families with the state kept out of it. Maybe a family could group together to buy an apartment for an elderly grandmother and free up the house for a younger member of the family. I doubt that this would catch on however; it would require sacrifice and thinking beyond oneself, both of which are in short supply these days.

orangerhyme

https://www.boards.ie/discussion/comment/121601617#Comment_121601617

It's difficult to know.

Ideally the downsize apartment would be in the same community which isn't possible really in a lot of cases.

Maybe it's better to incentivise older people to house share but that would be a tough sell.

I wonder if the government has data on the amount of older people living in decent sized houses.

When you walk around Dublin suburbs sometimes you see loads of old people.

I was in a coffee shop in Stillorgan shopping centre a few weeks ago and it was full of old people. Then the cafe upstairs was the same.

I think lots of the houses there were built in the 70s and 80s, so it makes sense.

If you search property prices in Genoa, Italy you can get perfect small apartments for 30,000. It's demographic decline. All the old people dying off and no young people to replace them.

I don't think they'll happen here as Italy's population is actually shrinking, but maybe a similar effect will happen in Dublin suburbs as lots of them were built in the 70s.

It would be interesting to see a map of Dublin with estates colour coded by the decade they were built.

lawred2

https://www.boards.ie/discussion/comment/121586804#Comment_121586804

FIAT currency is backed by sentiment and trust. Money is just a tool to make things happen.

Backing money by something that is finite is simply unworkable and/or useless.

RichardAnd

https://www.boards.ie/discussion/comment/121601672#Comment_121601672

Hmm. Here's the thing, when the word "incentivise" is used, it usually means that the state will punish or shame people into doing something. It is my very strongly held opinion that what a private citizen does with their property is absolutely no business of the state. End of.

That said, you are quite correct. My late grandmother (God rest her) was the sole occupant of a 5-bedroom house in Stillorgan until she went into a home a few years before her death. My mother (60s) lives alone in a D5 house, and my still living grand mother is the same. This is problematic, but as I mentioned above, there are ways that it could be dealt with within the family.

Using myself as an example. I'm a single, childless man in my late 30s, and I live alone in a 3-bedroom townhouse in Wexford. If my nephew (when he's older) were unable to house himself and his family, I would be open to pooling resources to buy a small apartment that I would take whilst giving him my house. N state involvement needed.

RichardAnd

https://www.boards.ie/discussion/comment/121601713#Comment_121601713

Yes, trust in banks and the state. If you trust either entity, I have magic beans to sell you.

lawred2

https://www.boards.ie/discussion/comment/121601724#Comment_121601724

Ridiculous response.

Irrelevant who I trust. Maybe your magic beans can back some currency somewhere.

orangerhyme

https://www.boards.ie/discussion/comment/121601718#Comment_121601718

By incentivise I just mean some type of financial incentive. Or Maybe just offer them a straight swap and the government pays the difference, either to the old person or the developer.

I know loads of old people will be like "I'm staying put, you'll have to drag my body out". But who knows, maybe a modern A rated apartment in the same community would be attractive. Those older houses can be very cold. Much cheaper heating bills, easier to clean and maintain, safer etc. There's definitely plenty of upsides.