Irish Property Market 2020 Part 2

awec · 03-12-2020 5:00pm

thefridge2006 wrote: »

No i disagree, banks have nothing to lose by offering as many people approval in principle to keep the show on the road, to keep a buzz about the place.

Its in the draw downs and sales that you'll see the reduction

Well, banks will only give people AIP if:

1. They apply for it
2. They meet the criteria.

While we may see drop offs in drawdowns or sales, the data still shows the is still a huge cohort of people in a position to buy (at least in a position where they want to buy).

And a drop in sales or drawdowns is not definitive either. We know for example that supply is very low right now, so lower sales will not be surprising for anyone.

TheSheriff · 03-12-2020 5:04pm

thefridge2006 wrote: »

No i disagree, banks have nothing to lose by offering as many people approval in principle to keep the show on the road, to keep a buzz about the place.

Its in the draw downs and sales that you'll see the reduction

Have your applied for AIP recently by any chance?

I have, it's not simply handed out. You need to submit a significant amount of documentation and meet criteria.

This is not some conspiracy theory.

brisan · 03-12-2020 5:05pm

thefridge2006 wrote: »

No i disagree, banks have nothing to lose by offering as many people approval in principle to keep the show on the road, to keep a buzz about the place.

Its in the draw downs and sales that you'll see the reduction

https://www.bpfi.ie/wp-content/uploads/2020/10/BPFI-Mortgage-Drawdowns-Report-Q3-2020.pdf

thefridge2006 · 03-12-2020 5:13pm

woejus wrote: »

Demand outstrips supply of €1m-plus Dublin homes

50+ €1,000,000 plus homes sold in Dublin by DNG alone.

"This has probably been the best year I’ve had since 1975"

Looks like we're heading straight for that 75% fall in prices in SoCoDu alright... :pac:

Hershal, 180 Butterfield Avenue, Rathfarnha.. ⇨ €2,950,000 | 5 Bed Detached House 5225 ft.. | http://myhome.ie/4212071 | #rathfarnham

Sold for €1,600,000.00 last year....that's some drop and thats before Covid

cnocbui · 03-12-2020 5:14pm

Cyrus wrote: »

yes or generally any house down the country built on its on site, they tend to be cheaply built and poorly finished (at least in my experience when we toyed with moving out of dublin a few years back)

Seriously? i'm in such a house and there are many more local to me. is this poorly finished? http://claretipp.ie/656914/Sellernaun_West_Mountshannon_Clare

Seems reasonable to me, but perhaps i have low standards.

I'm hoping to put my house on the market next year and I'm shocked by how few properties there are with the local RA. I hope that bodes well for getting a good price and easy sale.

Cyrus · 03-12-2020 5:32pm

cnocbui wrote: »

Seriously? i'm in such a house and there are many more local to me. is this poorly finished? http://claretipp.ie/656914/Sellernaun_West_Mountshannon_Clare

Seems reasonable to me, but perhaps i have low standards.

I'm hoping to put my house on the market next year and I'm shocked by how few properties there are with the local RA. I hope that bodes well for getting a good price and easy sale.

no that looks a nicely designed and well finished house to be fair. Nice views too although id argue the landscaping (and im guessing the drive way, they say gravel which people do because its cheap) leave a lot to be desired and you could easily spend 10s of thousands putting in a tarmac drive and landscaping the house.

i was more referring to this kind of thing

https://www.myhome.ie/residential/brochure/homelea-kilmuckridge-wexford/4332951

https://www.myhome.ie/residential/brochure/lilanber-inch-co-wexford-inch-wexford/4436905

https://www.myhome.ie/residential/brochure/st-judes-sinnottstown-lane-drinagh-wexford-town-wexford/4469729

Cyrus · 03-12-2020 5:33pm

thefridge2006 wrote: »

Hershal, 180 Butterfield Avenue, Rathfarnha.. ⇨ €2,950,000 | 5 Bed Detached House 5225 ft.. | http://myhome.ie/4212071 | #rathfarnham

Sold for €1,600,000.00 last year....that's some drop and thats before Covid

that was for sale since March 2018, the price was clearly unachievable.

Hubertj · 03-12-2020 5:52pm

thefridge2006 wrote: »

Hershal, 180 Butterfield Avenue, Rathfarnha.. ⇨ €2,950,000 | 5 Bed Detached House 5225 ft.. | http://myhome.ie/4212071 | #rathfarnham

Sold for €1,600,000.00 last year....that's some drop and thats before Covid

That’s the question I asked earlier... difference between sold prices and asking price.

HairySalmon · 03-12-2020 6:26pm

When I hear talk about affordable housing, what does that even mean? Affordable to who?

It’s fairly desperate that I’d be happy to get find a new build for under 500k to qualify for the help to buy scheme, but most are well over that in Dublin county.

Cherrywood was being sold as being built for the HTB but when I was talking to a rep from Sherry Fitzgerald she said that 3 bed semis are stating at mid 500’s and duplexes are starting at 400k. Just seems like smoke and mirrors.

House Hunt · 03-12-2020 6:30pm

HairySalmon wrote: »

When I hear talk about affordable housing, what does that even mean? Affordable to who?

It’s fairly desperate that I’d be happy to get find a new build for under 500k to qualify for the help to buy scheme, but most are well over that in Dublin county.

Cherrywood was being sold as being built for the HTB but when I was talking to a rep from Sherry Fitzgerald she said that 3 bed semis are stating at mid 500’s and duplexes are starting at 400k. Just seems like smoke and mirrors.

Surprised with that pricing. Is there any housing stock under the HTB limit? Mid terrace for example?

awec · 03-12-2020 6:35pm

HairySalmon wrote: »

When I hear talk about affordable housing, what does that even mean? Affordable to who?

It’s fairly desperate that I’d be happy to get find a new build for under 500k to qualify for the help to buy scheme, but most are well over that in Dublin county.

Cherrywood was being sold as being built for the HTB but when I was talking to a rep from Sherry Fitzgerald she said that 3 bed semis are stating at mid 500’s and duplexes are starting at 400k. Just seems like smoke and mirrors.

Affordable housing usually means state subsidised housing for low earners.

TheSheriff · 03-12-2020 6:39pm

awec wrote: »

Affordable housing usually means state subsidised housing for low earners.

We got pricing to the email the other day for a new development in dunboyne (castle farm maybe ? I can't remember the exact name).

A two bed, mid terrace with an easy facing garden was 340k I believe (or maybe 330k)... Thought it was an awful lot for what is essentially Meath and not even your three bed semi.

brisan · 03-12-2020 6:40pm

Cyrus wrote: »

no that looks a nicely designed and well finished house to be fair. Nice views too although id argue the landscaping (and im guessing the drive way, they say gravel which people do because its cheap) leave a lot to be desired and you could easily spend 10s of thousands putting in a tarmac drive and landscaping the house.

i was more referring to this kind of thing

https://www.myhome.ie/residential/brochure/homelea-kilmuckridge-wexford/4332951

https://www.myhome.ie/residential/brochure/lilanber-inch-co-wexford-inch-wexford/4436905

https://www.myhome.ie/residential/brochure/st-judes-sinnottstown-lane-drinagh-wexford-town-wexford/4469729

The last one is definitely out of bungalow bliss

brisan · 03-12-2020 6:42pm

HairySalmon wrote: »

When I hear talk about affordable housing, what does that even mean? Affordable to who?

It’s fairly desperate that I’d be happy to get find a new build for under 500k to qualify for the help to buy scheme, but most are well over that in Dublin county.

Cherrywood was being sold as being built for the HTB but when I was talking to a rep from Sherry Fitzgerald she said that 3 bed semis are stating at mid 500’s and duplexes are starting at 400k. Just seems like smoke and mirrors.

North Dublin you will find plenty or are you set on SoCo Du

https://www.myhome.ie/residential/dublin/new-homes/property-for-sale?maxprice=500000&minbeds=3

03-12-2020 7:22pm

HairySalmon wrote: »

When I hear talk about affordable housing, what does that even mean? Affordable to who?

It’s fairly desperate that I’d be happy to get find a new build for under 500k to qualify for the help to buy scheme, but most are well over that in Dublin county.

Cherrywood was being sold as being built for the HTB but when I was talking to a rep from Sherry Fitzgerald she said that 3 bed semis are stating at mid 500’s and duplexes are starting at 400k. Just seems like smoke and mirrors.

West and north Dublin you will find more affordable, even some parts of South Dublin near rathfarnham/tallaght may have new houses under 500K

PropQueries · 03-12-2020 7:26pm

For anyone interested in why DCC hasn't been able to get a handle on the housing crisis in Dublin, there is an excellent article by Mark Keenan in the Irish Independent.

Apparently the person in charge of housing in DCC over the past number of years was also in charge of the Limerick regeneration plan back in 2007 and it also details the reasons the Oscar Traynor Road in Coolock housing plan was recently voted down by the councillors.

He then goes on to say: "Is it somehow left wing to suggest the tax/rate payer shouldn’t always get screwed? That people should perhaps be housed in a manner that is most cost and resource effective?"

Link to Irish Independent article here (free to read): https://www.independent.ie/life/home-garden/dublin-city-councils-wine-into-water-housing-policies-39767811.html

Hubertj · 03-12-2020 7:50pm

PropQueries wrote: »

For anyone interested in why DCC hasn't been able to get a handle on the housing crisis in Dublin, there is an excellent article by Mark Keenan in the Irish Independent.

Apparently the person in charge of housing in DCC over the past number of years was also in charge of the Limerick regeneration plan back in 2007 and it also details the reasons the Oscar Traynor Road in Coolock housing plan was recently voted down by the councillors.

He then goes on to say: "Is it somehow left wing to suggest the tax/rate payer shouldn’t always get screwed? That people should perhaps be housed in a manner that is most cost and resource effective?"

Link to Irish Independent article here (free to read): https://www.independent.ie/life/home-garden/dublin-city-councils-wine-into-water-housing-policies-39767811.html

There’s a surprise. Institutionalised incompetence. And people think the state could build at scale.

Cyrus · 03-12-2020 8:07pm

brisan wrote: »

The last one is definitely out of bungalow bliss

Yes that’s what I meant ! houses built from plans in books

PropQueries · 03-12-2020 8:28pm

Hubertj wrote: »

There’s a surprise. Institutionalised incompetence. And people think the state could build at scale.

But he does say “Other local authorities do it and do it well. South Dublin Council hired Sisk to provide houses in Tallaght at an average cost of €177,000. So what gives?”

So, it appears to be all down to the few people at the top in just DCC as many of the other councils in Dublin and across ireland manage it fairly well.

fliball123 · 03-12-2020 9:41pm

PropQueries wrote: »

But he does say “Other local authorities do it and do it well. South Dublin Council hired Sisk to provide houses in Tallaght at an average cost of €177,000. So what gives?”

So, it appears to be all down to the few people at the top in just DCC as many of the other councils in Dublin and across ireland manage it fairly well.

That 177k does not include what the cost of land would be I take it?

Hubertj · 03-12-2020 9:46pm

PropQueries wrote: »

But he does say “Other local authorities do it and do it well. South Dublin Council hired Sisk to provide houses in Tallaght at an average cost of €177,000. So what gives?”

So, it appears to be all down to the few people at the top in just DCC as many of the other councils in Dublin and across ireland manage it fairly well.

There’s the problem, systemic failure. It’s not ideological as some conspiracy theorists would believe.

brisan · 03-12-2020 9:55pm

fliball123 wrote: »

That 177k does not include what the cost of land would be I take it?

Council already own the land and the land at the Oscar Traynor road was been given for free

Sweet.Science · 03-12-2020 10:23pm

Not many houses were built on that tallaght site by cisk

Less that what would be social houses on the oscar traynor road if it had gone through like planned

Smouse156 · 03-12-2020 10:45pm

woejus wrote: »

Demand outstrips supply of €1m-plus Dublin homes

50+ €1,000,000 plus homes sold in Dublin by DNG alone.

"This has probably been the best year I’ve had since 1975"

Looks like we're heading straight for that 75% fall in prices in SoCoDu alright... :pac:

Yet prices in the top bracket 950k plus fell 4% in the last year...at least sellers getting more realistic

https://www.irishtimes.com/business/economy/high-end-property-prices-in-capital-softening-1.4403639

PropQueries · 03-12-2020 11:35pm

Sweet.Science wrote: »

Not many houses were built on that tallaght site by cisk

Less that what would be social houses on the oscar traynor road if it had gone through like planned

But isn’t that the thing. If the council can hire Sisk to build a few A-rated houses for less than €180k each, imagine the discount they could achieve if they ask them to build 20,000 on state land around the country. They’d probably get them for c. €100k each if the councils pushed it.

Building 3-bed houses today is no different to building 3 bed houses 100 years ago. It’s four walls and a roof with a bit of added insulation so no matter what some people may believe, it’s actually not rocket science or any more expensive to build today.

This is proven by Cairn Homes reports showing the cost of building their a-rated houses for c. €130k each.

Graham · 04-12-2020 12:04am

PropQueries wrote: »

This is proven by Cairn Homes reports showing the cost of building their a-rated houses for c. €130k each.

I'm surprised Cairn Homes publish that amount of detail in their reports.

Smouse156 · 04-12-2020 12:18am

PropQueries wrote: »

But isn’t that the thing. If the council can hire Sisk to build a few A-rated houses for less than €180k each, imagine the discount they could achieve if they ask them to build 20,000 on state land around the country. They’d probably get them for c. €100k each if the councils pushed it.

Building 3-bed houses today is no different to building 3 bed houses 100 years ago. It’s four walls and a roof with a bit of added insulation so no matter what some people may believe, it’s actually not rocket science or any more expensive to build today.

This is proven by Cairn Homes reports showing the cost of building their a-rated houses for c. €130k each.

Why is their margin not way way higher then given their average site cost is €32k as the CEO stated recently. At €162k they should be making over 100% margin

PropQueries · 04-12-2020 12:21am

Graham wrote: »

I'm surprised Cairn Homes publish that amount of detail in their reports.

So was I. Came across it on their website recently. It was for some capital day market report and they were trying to raise capital by showing how much cheaper they can build their houses for than their competitors. It’s on page 67.

Link to report here: https://www.cairnhomes.com/f/42974/x/73df7387d0/cmd-17112018_combined.pdf

Graham · 04-12-2020 2:08am

PropQueries wrote: »

So was I. Came across it on their website recently. It was for some capital day market report and they were trying to raise capital by showing how much cheaper they can build their houses for than their competitors. It’s on page 67.

Link to report here: https://www.cairnhomes.com/f/42974/x/73df7387d0/cmd-17112018_combined.pdf

I don't think we're seeing the full picture there for a couple of reasons.

1) report is 2 years old
2) report is based on a data set that started in 2015
3) figures are a benchmark against other builders with no indication what costs are/are not included.

While I have no reason to suspect the figures are incorrect, they're clearly not intended to say we can build a house for a 100k. Their conclusion is when we compare our costs for X, we're Y% cheaper than our competitors. What we don't know is what is included in X.

Let's delve further into more recent/relevant numbers.

All back of a napkin calculations here:

Cairn 2019 Annual Report

Revenue €453 million
Gross Profit €82 million
1080 units delivered
€369,555 avg selling price ex vat.
€82,211 gross profit per unit

€369,555 - €82,211 = €287,343 cost per unit

Cairn land bank was acquired at a cost of €900 million for c. 17,000 units;

Approx land cost €53k/unit.

€287,343 - €53,000 = €249,843

€234,343 per unit excluding land.

SCSI report 2020 "The Real Cost of New Housing Delivery" suggests

Sales, Marketing & Legal Fees €8,400 per unit
Finance Costs €16,716 per unit

€234,343 - €8,400 - €16,716 =

€209,227 costs per unit delivered excl. VAT, land, profit, sales, marketing and legal fees.

Cairn already build at scale so I'm not convinced there are significant volume savings left to be had.

If LAs subcontract out the construction work you have to add the developer margin back on top of your €209,227 cost per unit.

So, back to your original hypothesis:

They’d probably get them for c. €100k each if the councils pushed it.

How?

*feel free to check my calculations, it was getting late as I posted.

Sweet.Science · 04-12-2020 8:22am

PropQueries wrote: »

But isn’t that the thing. If the council can hire Sisk to build a few A-rated houses for less than €180k each, imagine the discount they could achieve if they ask them to build 20,000 on state land around the country. They’d probably get them for c. €100k each if the councils pushed it.

Building 3-bed houses today is no different to building 3 bed houses 100 years ago. It’s four walls and a roof with a bit of added insulation so no matter what some people may believe, it’s actually not rocket science or any more expensive to build today.

This is proven by Cairn Homes reports showing the cost of building their a-rated houses for c. €130k each.

Considering how long it took them to build this amount could you imagine how long it would take a large volume

Yes it would cost less , but it would more than likely mean less social homes being built yearly .

Irish Property Market 2020 Part 2

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