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Irish Property Market 2020 Part 2

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    #10112
    combat14
    Registered Users Posts: 2,099 ✭✭✭combat14


    Pixlated Potatoe wrote: »
    If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long
    Houses are not overpriced

    perhaps if the average single person or couple has a combined salary of €115,000


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    #10113
    Smouse156
    Registered Users Posts: 529 ✭✭✭Smouse156


    Pixlated Potatoe wrote: »
    If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long
    Houses are not overpriced

    Houses are ridiculously overpriced! Way beyond average incomes. Land is the most overpriced of the lot. They are mainly over priced due to the Brickie paying too much for land and government taxes & levys


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    #10114
    Pixlated Potatoe
    Registered Users Posts: 9 ✭Pixlated Potatoe


    The same principle applies to houses that cost €100k to build plus land profit ect... their worth 150-180k all day long


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    #10115
    Idbatterim
    Registered Users Posts: 17,843 ✭✭✭✭Idbatterim


    What absolute comedy, a2 ber, a3 ber... but commute from 40k. out by car, instead of forty floors up and short walk or cycle to work!


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    #10116
    Pixlated Potatoe
    Registered Users Posts: 9 ✭Pixlated Potatoe


    combat14 wrote: »
    perhaps if the average single person or couple has a combined salary of €115,000

    That’s irrelevant

    If you were a builder and it costs you 300k to build the house and 50k for the land do you sell it for 400k or 300k


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    #10117
    Pixlated Potatoe
    Registered Users Posts: 9 ✭Pixlated Potatoe


    Smouse156 wrote: »
    Houses are ridiculously overpriced! Way beyond average incomes. Land is the most overpriced of the lot. They are mainly over priced due to the Brickie paying too much for land and government taxes & levys

    I agree with some of that however
    The average tradesman is being paid say €1000 per week
    Let’s say there is 10 tradesmen on site for 12 weeks
    There’s 120k
    then material most likely another 120k then insurances, machinery, cost of land , profit ,selling fees ,engineers ,architects, quantity surveyors
    People still live in 1996 in this country house price wise
    Inflation happened since then ,builders don’t have huge margins and most of the costs come from materials and labour


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    #10118
    Who2
    Registered Users Posts: 2,050 ✭✭✭Who2


    The current building requirements have added a minimum of 30k to the average 3 bed from what it would cost to build 10 years ago. If there was as much money in it as everyone thinks then it would be like 2005 again and there would be houses thrown up everywhere.


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    #10119
    Smouse156
    Registered Users Posts: 529 ✭✭✭Smouse156


    Pixlated Potatoe wrote: »
    I agree with some of that however
    The average tradesman is being paid say €1000 per week
    Let’s say there is 10 tradesmen on site for 12 weeks
    There’s 120k
    then material most likely another 120k then insurances, machinery, cost of land , profit ,selling fees ,engineers ,architects, quantity surveyors
    People still live in 1996 in this country house price wise
    Inflation happened since then ,builders don’t have huge margins and most of the costs come from materials and labour

    It’s true that actual hard construction costs are high , however, it is the soft costs that could be addressed. Heavy taxation of development land and a reduction in government levys would lower construction costs about 20%.

    There is no point in lowering levy’s unless land is taxed aggressively as the benefit of lower levy’s will only make land even more overpriced.


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    #10120
    cnocbui
    Registered Users Posts: 19,814 ✭✭✭✭cnocbui


    Pixlated Potatoe wrote: »
    That’s irrelevant

    If you were a builder and it costs you 300k to build the house and 50k for the land do you sell it for 400k or 300k

    This is a thread where the majority think there is no intrinsic value to a house and only the market value that someone is prepared to pay matters.

    The correct answer to your question is €250K Every third person on here is hoping to snag a crisis sale bargaing that's 40% less than it's intrinsic value.


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    #10121
    Pixlated Potatoe
    Registered Users Posts: 9 ✭Pixlated Potatoe


    The construction costs make up most of the value ,levies taxes ect...that you suggest are not going to make Jane and joe on a combined salary of €60k per year able to afford the 400k house
    After the last crash when these 400k houses where selling for 250k they where under valued
    Some one else rightly pointed out the new regs have added a huge chunk to building costs ,but also health and safety in construction has easily added another large chunk to this since the 2000s.
    I honestly don’t know what the answer is for Jane and joe maybe more 50/50 government help to buy schemes
    But what I do know is that the value of a property is always going to float + or- around the cost of build plus land


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    #10122
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Pixlated Potatoe wrote:
    The construction costs make up most of the value ,levies taxes ect...that you suggest are not going to make Jane and joe on a combined salary of €60k per year able to afford the 400k house After the last crash when these 400k houses where selling for 250k they where under valued Some one else rightly pointed out the new regs have added a huge chunk to building costs ,but also health and safety in construction has easily added another large chunk to this since the 2000s. I honestly don’t know what the answer is for Jane and joe maybe more 50/50 government help to buy schemes But what I do know is that the value of a property is always going to float + or- around the cost of build plus land


    There are plenty of homes selling for below 250k. Regulation costs can be reduced to 800euro as is the case in Northern Ireland and there system is more independent, effective and accountable, unlike our system here.


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    #10123
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Villa05 wrote: »
    Regulation costs can be reduced to 800euro as is the case in Northern Ireland and there system is more independent, effective and accountable, unlike our system here.

    The regs relate to additional construction/material costs to improve energy efficiency. Not the costs of somebody with a clipboard.

    The local authority contributions here are much higher than any NI equivalent, largely because they're used in lieu of higher property tax.


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    #10124
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Would forfeiting construction taxes for a recurring property tax similar to UK be a workable solution for all new builds in aiding affordablity.

    Significant savings in heating an A rated house would help cover the increased annual tax

    Implement measures that prevent the developer from soaking up the construction taxes as increased profit


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    #10125
    mcsean2163
    Registered Users Posts: 1,839 ✭✭✭mcsean2163


    Cyrus wrote: »
    im open to correction on this but afaik the state pays close enough to the going rate for those houses, i think they can specify lower cost F&F etc to bring the price down etc but it would be single digit percentages.

    thats why they have done deals with developers in more expensive estates to take units elsewhere.

    That should be illegal.


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    #10126
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Villa05 wrote: »
    Would forfeiting construction taxes for a recurring property tax similar to UK be a workable solution for all new builds in aiding affordablity.

    It would also make sense from the perspective of giving LAs a more consistent income.

    Have you seen the protestations when anything like that is suggested though.

    Probably heading a bit OT there though.


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    #10127
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Graham wrote:
    The regs relate to additional construction/material costs to improve energy efficiency. Not the costs of somebody with a clipboard.


    I think the person with the clipboard would be one of the more expensive labour costs on the building site

    A phenomenon not exclusive to the construction industry of course


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    #10128
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Graham wrote:
    Have you seen the protestations when anything like that is suggested though.


    I have not heard it suggested before.

    Any FTB thoughts out there. Would you pay a higher recurring tax annually if you could knock 30/40k of the price of a new build house.

    The savings on reduced mortgage and reduced heating costs would easily cover the increased tax


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    #10129
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Villa05 wrote: »
    I have not heard it suggested before.

    Any FTB thoughts out there. Would you pay a higher recurring tax annually if you could knock 30/40k of the price of a new build house.

    I was actually referring to increased LPT across the board, I don't think the LAs are in a position to allow a 30 year payment plan for a small number of FTBers.


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    #10130
    Cyrus
    Registered Users Posts: 19,744 ✭✭✭✭Cyrus


    mcsean2163 wrote: »
    That should be illegal.

    Social housing in expensive estates ?

    Yes I tend to agree .


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    #10131
    combat14
    Registered Users Posts: 2,099 ✭✭✭combat14


    Pixlated Potatoe wrote: »
    That’s irrelevant

    If you were a builder and it costs you 300k to build the house and 50k for the land do you sell it for 400k or 300k

    you can try sell the same house for a million if you like but if no one can afford it that wont work either

    perhaps the builders should look at reducing the cost of the build, factor in actual real peoples wages i.e. what people in a real world can actually afford given so many cant save as much now with rents sky high .. and we can all meet in reality in the real world


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    #10132
    PropQueries
    Registered Users Posts: 2,203 ✭✭✭PropQueries


    combat14 wrote: »
    you can try sell the same house for a million if you like but if no one can afford it that wont work either

    perhaps the builders should look at reducing the cost of the build, factor in actual real peoples wages i.e. what people in a real world can actually afford given so many cant save as much now with rents sky high .. and we can all meet in reality in the real world

    Last week, the Irish Housebuilders Association said:

    “The fact is policy-influenced and soft costs account for 50pc-52pc of the cost of any home, said the report. A homebuilder building for the State can do so for 50pc cheaper because these additional soft costs are not in play."

    Link to article in Irish Independent here: https://www.independent.ie/business/irish/builders-blame-government-soft-costs-for-social-housing-expense-39798455.html

    Also, on MyHome today, there are over 70 listings for A-Rated houses in Ireland with asking prices of less than €250k.

    So, construction material costs can’t be the reason for the higher price of new built homes in Dublin. I also don’t believe it’s labour costs as otherwise construction workers would commute to Dublin if the wage differential was indeed that high.


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    #10133
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 67,846 Mod ✭✭✭✭L1011


    PropQueries wrote: »
    I also don’t believe it’s labour costs as otherwise construction workers would commute to Dublin if the wage differential was indeed that high.

    They do. Huge proportion of construction workers in Dublin are from Northern Ireland, commuting daily or weekly.


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    #10134
    Marius34
    Registered Users Posts: 1,173 ✭✭✭Marius34


    combat14 wrote: »
    you can try sell the same house for a million if you like but if no one can afford it that wont work either

    perhaps the builders should look at reducing the cost of the build, factor in actual real peoples wages i.e. what people in a real world can actually afford given so many cant save as much now with rents sky high .. and we can all meet in reality in the real world

    In real world private companies won't produce if there is no profit to make. And if there is good profits, supplies will ramp up.


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    #10135
    PropQueries
    Registered Users Posts: 2,203 ✭✭✭PropQueries


    Marius34 wrote: »
    In real world private companies won't produce if there is no profit to make. And if there is good profits, supplies will ramp up.

    Sisk built 90 houses for the council in Tallaght for under €180k each 2 years ago. House prices haven't increased in Dublin in the last 2 years so the figures should be comparable to today.

    According to the article: “The new homes, which will be used for social housing, were built as part of a design and build contract worth c. €16million and were completed by Sisk Living in less than 37 weeks.”

    They then went on to say: “This project proves that builders on a design, build and where necessary finance basis can deliver homes at a far lower cost than developers who seek enhanced margins for the enhanced risk of speculatively purchasing land up front and building on it. Thus Builders as opposed to developers will deliver homes on state owned land achieving savings of over €100k per unit when compared to the price of purchasing similar units on the open market in areas such as this. The savings the Local Authorities achieve on developments of this nature as a result are considerable.”

    Link to article in Irish Building Magazine here: https://www.irishbuildingmagazine.ie/2018/11/01/sisk-living-delivers-90-social-houses-in-tallaght/


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    #10136
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    PropQueries wrote: »
    Last week, the Irish Housebuilders Association said:

    “The fact is policy-influenced and soft costs account for 50pc-52pc of the cost of any home, said the report. A homebuilder building for the State can do so for 50pc cheaper because these additional soft costs are not in play."

    The other side to that equation is those soft-costs currently pay for 'stuff'.

    If soft costs are eliminated from new builds, that 'stuff' has to be paid for by increases in revenue from other sources:

    Water charges
    Electricity bills
    Local property charges
    VAT
    Taxation

    I'm not suggesting soft costs shouldn't be reduced/removed. I think there should be a reorganisation to lower the burden on FTBers but let's not kid ourselves about how that would be achieved.


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    #10137
    PropQueries
    Registered Users Posts: 2,203 ✭✭✭PropQueries


    Graham wrote: »
    The other side to that equation is those soft-costs currently pay for 'stuff'.

    If soft costs are eliminated from new builds, that 'stuff' has to be paid for by increases in revenue from other sources:

    Water charges
    Electricity bills
    Local property charges
    VAT
    Taxation

    I'm not suggesting soft costs shouldn't be reduced/removed. I think there should be a reorganisation to lower the burden on FTBers but let's not kid ourselves about how that would be achieved.

    Or if I could suggest a rewording of that argument. FTBs should pay more for housing to subsidise the PAYG pension scheme for the public sector?


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    #10138
    Marius34
    Registered Users Posts: 1,173 ✭✭✭Marius34


    PropQueries wrote: »
    Sisk built 90 houses for the council in Tallaght for under €180k each 2 years ago. House prices haven't increased in Dublin in the last 2 years so the figures should be comparable to today.

    According to the article: “The new homes, which will be used for social housing, were built as part of a design and build contract worth c. €16million and were completed by Sisk Living in less than 37 weeks.”

    They then went on to say: “This project proves that builders on a design, build and where necessary finance basis can deliver homes at a far lower cost than developers who seek enhanced margins for the enhanced risk of speculatively purchasing land up front and building on it. Thus Builders as opposed to developers will deliver homes on state owned land achieving savings of over €100k per unit when compared to the price of purchasing similar units on the open market in areas such as this. The savings the Local Authorities achieve on developments of this nature as a result are considerable.”

    Link to article in Irish Building Magazine here: https://www.irishbuildingmagazine.ie/2018/11/01/sisk-living-delivers-90-social-houses-in-tallaght/

    And, why you referring to my comment? You think they build it because they wanted to be nice to social people, and analyzed their incomes?
    I'm quite confident there was conditions todo this with some kind of financial profit, and that's what matters the most for private companies.


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    #10139
    PropQueries
    Registered Users Posts: 2,203 ✭✭✭PropQueries


    Marius34 wrote: »
    And, why you referring to my comment? You think they build it because they wanted to be nice to social people, and analyzed their incomes?
    I'm quite confident there was conditions todo this with some kind of financial profit, and that's what matters the most for private companies.

    Of course they made a profit. But it does point us in the direction of the true cost of building A-Rated houses in Dublin. Their design and build contract built them for less than €180k each as they didn’t have land or finance costs. Then take out their profit margin and at least we have an idea of the true cost of building A-Rated houses in Dublin which would bring it below the €150k mark in this example.


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    #10140
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Graham wrote:
    I was actually referring to increased LPT across the board, I don't think the LAs are in a position to allow a 30 year payment plan for a small number of FTBers.

    The suggestion is an attempt to reduce cost of construction,

    Revenue handle property tax collection, so LAs don't have to do anything.

    Might be an idea to increase lpt across the board. It is govt policy to upgrade existing housing to a high standard. I'd pay UK rates if my house was brought up to an A or B standard of insulation.

    Invest, create jobs, generate increased income

    It's an idea that can be developed to solve multiple issues.


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    #10141
    Marius34
    Registered Users Posts: 1,173 ✭✭✭Marius34


    PropQueries wrote: »
    Of course they made a profit. But it does point us in the direction of the true cost of building A-Rated houses in Dublin. Their design and build contract built them for less than €180k each as they didn’t have land or finance costs. Then take out their profit margin and at least we have an idea of the true cost of building A-Rated houses in Dublin which would bring it below the €150k mark in this example.

    Not sure what a those 150K. It doesn't say anything about it.
    I believe developers looking for 5% profits, where the profits are guaranteed (very low risk projects), and around ~10% profits for other projects.
    So housing selling for 400K, you can expect the full costs with taxes and administration on average 360K-380K


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