Property Market 2020

hometruths · 19-05-2020 05:43PM

Mic 1972 wrote: »

are you going to repeat this line on every page now?

Apologies. Typo.

I meant 'Bye now.'

JJJackal · 19-05-2020 06:06PM

schmittel wrote: »

Ok lets assume that the vacancy data was so flawed it should be completely ignored. So we can forget about the 110,000 oversupply figure and subsequent calculation

But presumably the CSO can count the number of housing units correctly whether they are vacant or not and that their figures of the total population are reliable?

If so we know that the dwellings per 1000 people in 2011 was 435.

We know that there was massive oversupply in 2011 as prices were falling off a cliff.

History tells us that a figure of 435 houses per 1000 people can lead to property market conditions of massive oversupply.

My argument is that current policies are leading us back into a situation of oversupply.

Central Banks says we need 34,000 new homes a year for the next decade.

So thats 340,000 new homes by end of 2030. Making a total of 2,393,500 housing units for a projected population of 5,248,041

Or to put it another way 456 houses per 1000 population.

So at some stage over the next 10-15 years we are going to go way past the 2011, 435 massive oversupply figure and it is going to happen at the same time that a number of rapidly evolving demographic and social changes are converging with immoveable economic theories.

As far as I am aware I have no flawed CSO data in the above. If I do, let me know what it is.

If I don't, can you let me know the flaw in my logic?

One flawed assumption is that we will reach 34,000 homes per year in the next few years.

I believe that this year it is expected that 16,000 will be complete (pre-COVID 21,000 or so predicted). Next year will likely be better as COVID will have bedded in.

LJ12345 · 19-05-2020 06:11PM

“The Construction Industry Federation has also warned that Covid-19 safety measures could add 5-10% to the cost of a house.”

https://www.rte.ie/news/ireland/2020/0519/1139398-construction-coronavirus/

Brianmwalker · 19-05-2020 06:53PM

LJ12345 wrote: »

“The Construction Industry Federation has also warned that Covid-19 safety measures could add 5-10% to the cost of a house.”

https://www.rte.ie/news/ireland/2020/0519/1139398-construction-coronavirus/

Mr Parlon said he had spoken to a substantial house builder this morning, who had forecast that implementing the measures, including social distancing, could add €10,000-15,000 to the cost of a house.

If 15k is 10% I'll take 3!

Villa05 · 19-05-2020 06:56PM

LJ12345 wrote:

â€œThe Construction Industry Federation has also warned that Covid-19 safety measures could add 5-10% to the cost of a house.â€

Aahh no better man to extract money out of stone, notice how the cost goes up based on the size of the wallet

Up to 40% extra on the children's hospital.
Good man, Tom, you have form

The_Conductor · 19-05-2020 07:02PM

The suggestion of an additional 40% on the price of the Children's Hospital- is nothing short of appalling and should, in any sane country, herald the death knell of the project. Keep in mind- Brendan Howlin is on the record stating that €350m of the €405m that we got for selling the National Lottery to the Ontario Teacher's Pension Fund- would pay for the Children's Hospital (Google it if you don't believe me).

If it adds 10-15k onto the price of a house currently under construction- where the average price is 350k- this represents an additional 3-4.5% on the cost of an average unit- which I think the market is capable of bearing.

It sounds like Mr. Parlon is kite flying for massive inflation in delivering public projects- and someone seriously needs to shoot down his kite ASAP- his suggestions are shocking.

Villa05 · 19-05-2020 07:25PM

The_Conductor wrote:

It sounds like Mr. Parlon is kite flying for massive inflation in delivering public projects- and someone seriously needs to shoot down his kite ASAP- his suggestions are shocking.

No man has cost the state more than this guy and that is saying something giving our history

cnocbui · 19-05-2020 07:59PM

The_Conductor wrote: »

The suggestion of an additional 40% on the price of the Children's Hospital- is nothing short of appalling and should, in any sane country, herald the death knell of the project. Keep in mind- Brendan Howlin is on the record stating that €350m of the €405m that we got for selling the National Lottery to the Ontario Teacher's Pension Fund- would pay for the Children's Hospital (Google it if you don't believe me).

If it adds 10-15k onto the price of a house currently under construction- where the average price is 350k- this represents an additional 3-4.5% on the cost of an average unit- which I think the market is capable of bearing.

It sounds like Mr. Parlon is kite flying for massive inflation in delivering public projects- and someone seriously needs to shoot down his kite ASAP- his suggestions are shocking.

In Perth, Western Australia, they recently built a 298 bed children's hospital:

The cost was about €2.4 M per bed. If the NCH only costs €1.7 B, it will have cost €4.5 M per bed.

What a country this is.

Empty_Space · 19-05-2020 08:13PM

The_Conductor wrote: »

If it adds 10-15k onto the price of a house currently under construction- where the average price is 350k- this represents an additional 3-4.5% on the cost of an average unit- which I think the market is capable of bearing.

Why would it add 15k to the price of the house?
Supposedly it adds 15k to building cost but cost at sale is dictated by what buyer can or will pay.

This is just another pathetic example of an effort to artificially inflate prices, but that road is run.
Prices will crash and the years of lies around housing will be exposed.

Hubertj · 19-05-2020 08:18PM

Villa05 wrote: »

Aahh no better man to extract money out of stone, notice how the cost goes up based on the size of the wallet

Up to 40% extra on the children's hospital.
Good man, Tom, you have form

Take 50% off those estimates and it might be more believable

Graham · 19-05-2020 08:23PM

cnocbui wrote: »

The cost was about €2.4 M per bed. If the NCH only costs €1.7 B, it will have cost €4.5 M per bed.

What a country this is.

Not entirely sure I'd hold that up as a shining example.

"after three years of delays, lead and asbestos contamination and two legionella disease scares" followed by a A$300,000,000 claim from the contractor

The_Conductor · 19-05-2020 08:26PM

Graham wrote: »

Not entirely sure I'd hold that up as a shining example.

"after three years of delays, lead and asbestos contamination and two legionella disease scares" followed by a A$300,000,000 claim from the contractor

After all those ridiculous happenings- Ireland's cost per bed is still double that of Perth (so far)- and its suggested it could increase by a further 40%.........?

The cost of the National Children's Hospital is nothing short of a national disgrace. Just because we have already thrown money at it (a staggering amount of money)- doesn't mean we should keep throwing good money after bad.

cunnifferous · 19-05-2020 08:38PM

Graham wrote: »

Not entirely sure I'd hold that up as a shining example.

"after three years of delays, lead and asbestos contamination and two legionella disease scares" followed by a A$300,000,000 claim from the contractor

If anything it's a perfect example. It's been beset by delays and mishaps and it's STILL coming in and half the price per bed!!

theballz · 19-05-2020 08:49PM

Ozark707 wrote: »

Without giving too much away are you able to give a range what % the 20k was?

It was 5% below asking price.

cnocbui · 19-05-2020 10:04PM

Graham wrote: »

Not entirely sure I'd hold that up as a shining example.

"after three years of delays, lead and asbestos contamination and two legionella disease scares" followed by a A$300,000,000 claim from the contractor

Imagine what it would have cost if it had been smooth sailing. It would only have made the contrast even greater.

smurgen · 19-05-2020 10:53PM

LJ12345 wrote: »

“The Construction Industry Federation has also warned that Covid-19 safety measures could add 5-10% to the cost of a house.”

https://www.rte.ie/news/ireland/2020/0519/1139398-construction-coronavirus/

If anything I think this nonsense is definitely a sign of them trying to get ahead of the curve on a drop.pretty soon these lads will be price takers,not setters.

Hubertj · 19-05-2020 11:09PM

smurgen wrote: »

If anything I think this nonsense is definitely a sign of them trying to get ahead of the curve on a drop.pretty soon these lads will be price takers,not setters.

I don’t think he is talking nonsense that delays will increase costs. That is obvious if it takes longer to complete a job. However putting a cost or % on it so soon sounds like a serious exaggeration. As with all industries you paint the worst possible picture hoping to get more government assistance - grants, VAT reductions etc....

smurgen · 19-05-2020 11:16PM

Hubertj wrote: »

I don’t think he is talking nonsense that delays will increase costs. That is obvious if it takes longer to complete a job. However putting a cost or % on it so soon sounds like a serious exaggeration. As with all industries you paint the worst possible picture hoping to get more government assistance - grants, VAT reductions etc....

Delays might mean increased costs.there is nothing indicating this cost is going to be or will be absorbed by the end consumer/purchaser.

Villa05 · 20-05-2020 05:54AM

Marius34 wrote: »

Regarding the inflation, are you selectively choosing 2013? Or how do you get that house price inflation is greater than wage inflation? It's interesting because in many countries it is a case, due to regulations, quality of house and etc.. But I'm not sure about Ireland.

As well you would need to compare likes with likes.. Saying that nowadays houses are smaller then before is already wrong, houses are bigger in fact, whereas regarding the gardens you might be right. But again you need to compare similar size cities/towns.

Overpriced - is kind of subjective thing to speak about...

House price inflation 1996 to 2005
Average Annual inflation 14.9%
Total house price inflation in time period 270%
Highest inflation Wicklow 310%

1998 saw 30% inflation in one year

House price inflation 2006 to 2020 average annual growth rate 3.8%

House size
Average Irish house size lowest of EU's wealthy countries

What is striking about average dwelling floor space is that despite Ireland’s low population density and the large ratio of houses, we are among the lowest in the EU.
Ireland has an average floor space of 81 square metres compared with 115 in Denmark, 124 in Belgium and 107 in the Netherlands. The EU 28 average was 95

Villa05 · 20-05-2020 06:25AM

GreeBo wrote: »

Rigged? Well if you call people having babies rigged then sure, its rigged.
Who is suffocating the supply? Is there someone buying up properties and boarding them up or knocking them down? Who is doing this? It should be easy for you to prove this, if its true.

While it was apparent that we were in a housing crisis zoned land was sold to vulture funds without any obligation to build. Vacant site levy postponed
Interest rates charged to developers for building was set at rate that was prohibitive

Housing developments opposed at every opportunity by politicians.
Costly and ineffective self regulation requiring sign off at different stages of construction, costing between an estimated 38k and 60k per unit.

An independent effective system is in place in Northern Ireland costing 730 euro per unit

The housing crisis is the collateral damage of Govt policy to push up prices. However we are now in a position that the Government is paying 1 billion a year in housing and creating an artificial floor in rent prices. This is unsustainable going forward

Govt policy placed barrier after barrier to inhibit supply, this artificialy pushed up prices and rents. As more and more people are caught in this trap, they vote against the Govt.
If the new Govt don't act, it wont be long before we see significant political change in this country

Villa05 · 20-05-2020 06:36AM

GreeBo wrote: »

Because we are a small nation, if you are expecting Wexford to have a bustling financial hub I fear you will be forever mistaken.

Its far easier to solve one problem (Dublin) than solve 25 problems.
Unless of course your plan is that everyone who moves out of Dublin moves to the same place?

Sure, some people will, but try to put a number on it before you decide its going to impact the property market.

1 Wexford like many other locations can help to reduce the burden on Dublin through work from home. It does not need to be a bustling financial hub to achieve this.

Northern trust have had a very successful move to Limerick and is on course to be biggest employer in the area

2 My post was with regard to efficient use of current infrastructure, If WFH can aid this process I'm sure it will be encouraged

3 I suspect the 20 to 30 year olds would like to live and work in Dublin for the choice it gives them

The 40 plus cohort may well stay also as has been said here they may have put down roots, have family in schools

The most likely to move out are the family forming demographic that have been priced out of family homes in Dublin

Assetbacked · 20-05-2020 09:12AM

Colony Capital looking to offload its commercial property interests in Ireland, a few weeks after some of its hotel and healthcare portfolio companies defaulted on some of their debt obligations in the US.

"Colony’s most significant assets include a 75 per cent stake in the Burlington Plaza office complex on Burlington Road and a 72 per cent share in the headquarters of Three Ireland on Sir John Rogerson’s Quay."

"Outside of its various interests in the capital’s existing office infrastructure, Colony Capital is the funding partner for the numerous developments being delivered currently by Johnny Ronan’s Ronan Group Real Estate (RGRE). These include Salesforce’s new European headquarters at Spencer Place and the Project Waterfront site in the Dublin docklands, the 23-storey Aqua Vetro tower on Tara Street, Fibonacci Square, and the 350,000sq ft of office space RGRE is delivering as part of Facebook’s new European headquarters in Ballsbridge. It remains unclear, what impact, if any, Colony’s efforts to dispose of its other Irish interests will have on its arrangements with RGRE. "

https://www.irishtimes.com/business/commercial-property/colony-capital-seeks-buyer-for-stakes-in-prime-dublin-offices-1.4257498?mode=amp

Not a great time to be looking to dump office space! And just to add, Green REIT selling up last year was a stroke of genius.

Hubertj · 20-05-2020 10:14AM

Villa05 wrote: »

While it was apparent that we were in a housing crisis zoned land was sold to vulture funds without any obligation to build. Vacant site levy postponed
Interest rates charged to developers for building was set at rate that was prohibitive

Housing developments opposed at every opportunity by politicians.
Costly and ineffective self regulation requiring sign off at different stages of construction, costing between an estimated 38k and 60k per unit.

An independent effective system is in place in Northern Ireland costing 730 euro per unit

The housing crisis is the collateral damage of Govt policy to push up prices. However we are now in a position that the Government is paying 1 billion a year in housing and creating an artificial floor in rent prices. This is unsustainable going forward

Govt policy placed barrier after barrier to inhibit supply, this artificialy pushed up prices and rents. As more and more people are caught in this trap, they vote against the Govt.
If the new Govt don't act, it wont be long before we see significant political change in this country

all sounds very plausible. However, socialism isn't the solution to the problems caused by government policy. It would make them worse. Ideological socialist boll*xology will not fix polotics / policy / systemic failures in any part of our society.....

JimmyVik · 20-05-2020 10:17AM

smurgen wrote: »

If anything I think this nonsense is definitely a sign of them trying to get ahead of the curve on a drop.pretty soon these lads will be price takers,not setters.

I think you are right.
But I think that that will slow down construction to a crawl too.

Billythekid19 · 20-05-2020 10:48AM

smurgen wrote: »

If anything I think this nonsense is definitely a sign of them trying to get ahead of the curve on a drop.pretty soon these lads will be price takers,not setters.

Logic would dictate that if theres an increase in the cost of building that at least some proportion of that amount will be passed onto the purchaser. If costs rise it will A. lead to an increase in new builds, or B. will lead to a decline in the construction of new builds if consumers (not suprisingly) are not prepared to pay more for a new build in the midst of a global depression.

Claw Hammer · 20-05-2020 11:26AM

Billythekid19 wrote: »

Logic would dictate that if theres an increase in the cost of building that at least some proportion of that amount will be passed onto the purchaser. If costs rise it will A. lead to an increase in new builds, or B. will lead to a decline in the construction of new builds if consumers (not suprisingly) are not prepared to pay more for a new build in the midst of a global depression.

that has already happened in Dublin. Most new builds are funded by vulture funds because it is too expensive for builders to construct spec builds.

Cyrus · 20-05-2020 11:32AM

Billythekid19 wrote: »

Logic would dictate that if theres an increase in the cost of building that at least some proportion of that amount will be passed onto the purchaser. If costs rise it will A. lead to an increase in new builds, or B. will lead to a decline in the construction of new builds if consumers (not suprisingly) are not prepared to pay more for a new build in the midst of a global depression.

indeed,

that logic seems to be lost on a few posters however.

Browney7 · 20-05-2020 11:48AM

Cyrus wrote: »

indeed,

that logic seems to be lost on a few posters however.

It's all a game at the minute. The builders know they will struggle to get the price pre Covid so they either stop building or drop prices and reduce their margin.

There is of course another option where they lobby like crazy and keep prices the same or a small reduction but negotiate a bigger reduction in development levies or VAT or building standards in order to keep their margins intact.

Of course if they stop building the government could always make use of the extra capacity from idle tradesmen and builders and contractors and embark on an ambitious affordable/social housing scheme on state land but availability of money to finance and willingness and ability to add to the national debt will come into play. The next year will be interesting to see what plays out

Cyrus · 20-05-2020 12:00PM

Browney7 wrote: »

It's all a game at the minute. The builders know they will struggle to get the price pre Covid so they either stop building or drop prices and reduce their margin.

There is of course another option where they lobby like crazy and keep prices the same or a small reduction but negotiate a bigger reduction in development levies or VAT or building standards in order to keep their margins intact.

Of course if they stop building the government could always make use of the extra capacity from idle tradesmen and builders and contractors and embark on an ambitious affordable/social housing scheme on state land but availability of money to finance and willingness and ability to add to the national debt will come into play. The next year will be interesting to see what plays out

i think people over estime the scope for builders to drop their margins, they may not have a choice with existing builds but future phases will struggle to get funding if margins are eroded.

Assetbacked · 20-05-2020 01:21PM

The ESRI report discussed a few days ago has now been published and IT are leading with a clickbait headline

https://www.irishtimes.com/business/construction/house-prices-to-fall-by-12-over-next-18-months-esri-says-1.4258075?mode=amp

12% wouldn't seem too bad for the next 18 months but there is a possibility that this is just when prices start to climb down as data in 18 months will reflect activity in 12-18 months, when the market will only be restarting properly. Until then, people are more concerned about their job still existing, kids going to school and whether they can get a holiday at some point this year.

Property Market 2020

Comments