2021 Irish Property Market chat - mod warnings post 1

fliball123 · 20-01-2021 04:44PM

PropQueries wrote: »

I don't believe for one second c. 5,000 existing dwellings in and around the counties of Dublin, Cork, Limerick and Galway (the counties where people want to live and where the majority of demand will be going forward, WFH or no WFH) need to knocked down and replaced each and every year i.e. 50,000 units would need to knocked down and rebuilt, primarily in these four counties over the next 10 years.

I also don't believe using the 2011 - 2016 estimated level of housing obsolescence and applying it going forward would be appropriate given the unique circumstances of that time period.

This, according to your link is how they calculate it:

"For the intercensal period, 2011-2016 in this case, the number of dwellings that became obsolete each year can be obtained by taking the change in the stock of dwellings between Censuses and subtracting this figure from the numbers of dwellings built over the relevant period. Comparing the 2011 to the 2016 Census shows an increase of 8,800 permanent housing units. At the same time, completions in the intercensal period, between the second quarter of 2011 and the first quarter of 2016, amounted to 29,319 dwellings. The difference between these two figures provides an estimate of obsolete dwellings: a total of 20,519 or 4,104 per annum. This results in an obsolescence rate (obsolete dwellings compared to the total housing stock) of 0.20 per cent"

There is definitely additional supply of at least c. 30,000 additional units entering the market each year when adding up new builds, refurbishments, re-connections, probate sales etc.. That's enough new additional supply entering the market to house c. 90,000 persons each year (average of a couple and one child).

We definitely do not require enough additional housing supply to accommodate an additional 90,000 persons each year going forward IMO.

So you dont believe what the experts think. I think I will believe experts over you with your track record. Sorry but 4/6% Obsolescence is the norm for this country. Houses have to be knocked down in order to build new devs.

https://www.housing.eolasmagazine.ie/the-challenge-of-housing-obsolescence/#:~:text=According%20to%20Sirr's%20figures%2C%20a,19%2C000%20is%20due%20to%20obsolescence

Did you even read the above it explains how your theory is flawed with regard to stock coming online here. The above link was actual figures not an estimate of over 6k that had to be knocked down in 2016 alone.

There are no figures for new builds out yet for last year lets see if they hit the 21k new builds promised. It has been pointed out that build commencements are way down during 2020 and 2021 has hardly got off to a flying start with regard to construction again. So we are no where near your 30k that you keep going on about. Also your theory depends on international travel and people emigrating back in here will not pick back up pre covid. I guess I cant say it will pick back up to the levels seen in the years from 2015 to 2019 but then again you cant say that it wont (unless your looking in your crystal ball again)

Timing belt · 20-01-2021 04:45PM

PropQueries wrote: »

In relation to obsolescence, not many people would have had the funds between 2008 and 2013 to maintain their vacant properties especially if they thought there was little value in them at the time. Such properties would fall into disrepair fairly quickly in such a scenario. Extrapolating the obsolescence figures during that period and applying them going forward is wrong and overestimating the future levels of obsolescence IMO

The figures are from 2011 - 2016 so yet again you are moving the goal posts.

If people now had money to prevent a building from being obsolescent then they would also have money to bring back vacant properties to the market. yet this is not being seen in the ESB re-connection figures which you have totally ignored.

Can't find figures on probate sales (maybe someone can find them), but stands to reason it's definitely in the 5,000 - 10,000 figure annually IMO.

If deaths are included in the population growth then why are you double counting with probate sales? Can you explain your logic.

Marius34 · 20-01-2021 04:52PM

PropQueries wrote: »

There is definitely additional supply of at least c. 30,000 additional units entering the market each year when adding up new builds, refurbishments, re-connections, probate sales etc.. That's enough new additional supply entering the market to house c. 90,000 persons each year (average of a couple and one child).

We definitely do not require enough additional housing supply to accommodate an additional 90,000 persons each year going forward IMO.

If there were 10 houses in 2019.
In 2020 one got obsolescence, 1 got disconnected, 1 got reconnect, and there was 1 new build.
I know the result for you would be 2 new houses. That can house additional 2 families.
It might be to complex to solve this equation, but believe or not, result is still 10 houses at the end of 2020.

beauf · 20-01-2021 04:56PM

PropQueries wrote: »

And I have no idea why they fret about the value of their home. The state is just going to take whatever value exists in their homes from them through some future version of the fair deal scheme, lower inheritance tax thresholds etc.

The bigger issue will that there won't be enough people working to pay for all the people not working and their housing.

PropQueries · 20-01-2021 05:02PM

Timing belt wrote: »

The figures are from 2011 - 2016 so yet again you are moving the goal posts.

If people now had money to prevent a building from being obsolescent then they would also have money to bring back vacant properties to the market. yet this is not being seen in the ESB re-connection figures which you have totally ignored.

If deaths are included in the population growth then why are you double counting with probate sales? Can you explain your logic.

The logic being that if an old couple's house goes into probate, it's not likely to be bought by another old couple. I'm looking at the actual demand for additional housing required each and every year going forward and that generally means young couples with children or hoping to have children who don't already have an existing home bought or rented.

If people believe we need enough additional supply each and every year for c. 90,000 additional persons going forward, so be it. We're far too small a country, population wise, for this level of future demand to exist IMO

Timing belt · 20-01-2021 05:09PM

Idbatterim wrote: »

we have a marginal tax rate of FIFTY percent over a pittance after two booms and the party of early risers being at the helm for the last one. How much worse can it get?

This rip off prices is all well and good, until their kids emigrate or emigrate long term OR they need financial assistance from the parents, who may struggle to afford it...

Tax rates have been as high as 65% in the past in Ireland.

L1011 · 20-01-2021 05:12PM

Idbatterim wrote: »

we have a marginal tax rate of FIFTY percent over a pittance after two booms and the party of early risers being at the helm for the last one. How much worse can it get?

The marginal rate does not reach 50% until you earn over 70k.

Your posting style/tone here is exceptionally aggressive and not acceptable. Tone it down significantly.

Timing belt · 20-01-2021 05:17PM

PropQueries wrote: »

The logic being that if an old couple's house goes into probate, it's not likely to be bought by another old couple. I'm looking at the actual demand for additional housing required each and every year going forward and that generally means young couples with children or hoping to have children who don't already have an existing home bought or rented.

The housing Stock figure remains the same and there is no increase in supply.

It is irrelevant who buys it as lets say it could be rented out to a young couple or could be bought by a couple upgrading who's house would then become available for FTB's.

You are double counting by including this in your figures.

If people believe we need enough additional supply each and every year for c. 90,000 additional persons going forward, so be it. We're far too small a country, population wise, for this level of future demand to exist IMO

Lets take a step back and count in housing stock as the 90k people is your figure which is calculated differently to how everyone else (ERSI,CSO etc) calculates it and results in no of people being over estimated.

You are staying well clear from ESB re-connections do I take it that you agree that this is not additional supply now.

hometruths · 20-01-2021 05:23PM

PropQueries wrote: »

If people believe we need enough additional supply each and every year for c. 90,000 additional persons going forward, so be it. We're far too small a country, population wise, for this level of future demand to exist IMO

We have huge number of people living in underoccupied properties - way above average.
We have tiny number of people living in overcrowded properties - way below average.
We have huge number of properties with nobody living in them - considerably above average.

We may want huge additional supply every year, but we definitely don’t need it.

Timing belt · 20-01-2021 05:25PM

L1011 wrote: »

The marginal rate does not reach 50% until you earn over 70k.

Your posting style/tone here is exceptionally aggressive and not acceptable. Tone it down significantly.

The 70k could be lowered if the government wanted to increase the tax intake. To say that people won't see tax increases if SF get in power because they are already high is a mistake.

Timing belt · 20-01-2021 05:27PM

schmittel wrote: »

We have huge number of properties with nobody living in them - considerably above average.

It is not above average compared to most Cities in Europe and USA.

beauf · 20-01-2021 05:34PM

schmittel wrote: »

We have huge number of people living in underoccupied properties - way above average.
We have tiny number of people living in overcrowded properties - way below average.
We have huge number of properties with nobody living in them - considerably above average.

We may want huge additional supply every year, but we definitely don’t need it.

Average compared to where?

hometruths · 20-01-2021 05:35PM

Timing belt wrote: »

It is not above average compared to most Cities in Europe and USA.

Ok, rather than argue that point, I’ll rephrase it to something you can agree with:

We have huge number of people living in underoccupied properties - way above average.
We have tiny number of people living in overcrowded properties - way below average.
We have a rising number of properties with nobody living in them.

We may want huge additional supply every year, but we definitely don’t need it.

hometruths · 20-01-2021 05:39PM

beauf wrote: »

Average compared to where?

EU.

70% of people live in houses that are too big for their needs. Twice the EU Average.

Only 3.2pc of the Irish population were classified as living in overcrowded households in 2019 - the EU average is 17.2%

https://www.independent.ie/business/personal-finance/property-mortgages/almost-7-in-10-people-in-ireland-are-living-in-homes-too-big-for-their-needs-39958654.html

Timing belt · 20-01-2021 05:47PM

schmittel wrote: »

EU.

70% of people live in houses that are too big for their needs. Twice the EU Average.

Only 3.2pc of the Irish population were classified as living in overcrowded households in 2019 - the EU average is 17.2%

https://www.independent.ie/business/personal-finance/property-mortgages/almost-7-in-10-people-in-ireland-are-living-in-homes-too-big-for-their-needs-39958654.html

Even in a low migration scenario the ERSI are saying we need 23k housing units each year to meet demand. Are you saying that this can be accommodated without building new properties and instead looking to better utilise our existing housing stock.

hometruths · 20-01-2021 05:52PM

Timing belt wrote: »

Even in a low migration scenario the ERSI are saying we need 23k housing units each year to meet demand. Are you saying that this can be accommodated without building new properties and instead looking to better utilise our existing housing stock.

I’m not sure if the entire demand can be met from existing housing stock, so I assume some level of new build is required.

I’m saying a lot of the future demand can be met by better utilizing our existing housing stock.

The most important thing I am saying is it is blatantly untrue to say there is nothing we can do, the only solution is to build more.

PropQueries · 20-01-2021 05:53PM

Timing belt wrote: »

The housing Stock figure remains the same and there is no increase in supply.

It is irrelevant who buys it as lets say it could be rented out to a young couple or could be bought by a couple upgrading who's house would then become available for FTB's.

You are double counting by including this in your figures.

Lets take a step back and count in housing stock as the 90k people is your figure which is calculated differently to how everyone else (ERSI,CSO etc) calculates it and results in no of people being over estimated.

You are staying well clear from ESB re-connections do I take it that you agree that this is not additional supply now.

Not staying clear of the ESB re-connections. I stated in my original post "5,000, maybe half that?" which is near enough your c. 2,000 per annum figure. Just to get that out of the way as you've asked me several times

MacronvFrugals · 20-01-2021 06:01PM

IMF warns State's Help-to-Buy scheme adding to pressures on housing market

From 2017 but i wonder what they would've thought of it being increased from 20k to 30k

In relation to the Help-to-Buy scheme, Michelle Shannon - the current IMF head of mission to Ireland - said: "We have cautioned that this could contribute to demand pressures."

The Department of Finance last year announced that there would be a review of the scheme which is to begin soon.

Ms Shannon said the IMF welcomed this review as it could provide an evidence-based opportunity to assess the impact of the scheme.

https://www.independent.ie/irish-news/politics/imf-warns-states-help-to-buy-scheme-adding-to-pressures-on-housing-market-35710046.html

Timing belt · 20-01-2021 06:02PM

PropQueries wrote: »

Not staying clear of the ESB re-connections. I stated in my original post "5,000, maybe half that?" which is near enough your c. 2,000 per annum figure. Just to get that out of the way as you've asked me several times

But you are claiming it is additional supply when it is not!!!

PropQueries · 20-01-2021 06:08PM

Timing belt wrote: »

But you are claiming it is additional supply when it is not!!!

It's most definitely additional supply in the sense that they weren't occupied for a minimum of 2 years previously and are now most likely occupied which means that's c. 2,000 less new build units required each year.

But, to me, it does raise the question. Is there a way to look at ESB connections and calculate how many of the vacant properties, housing estates etc. after the last bust have re-entered supply and then calculate (by a rough estimate) how many are still vacant?

Timing belt · 20-01-2021 06:08PM

schmittel wrote: »

I’m not sure if the entire demand can be met from existing housing stock, so I assume some level of new build is required.

I’m saying a lot of the future demand can be met by better utilizing our existing housing stock.

The most important thing I am saying is it is blatantly untrue to say there is nothing we can do, the only solution is to build more.

I respect that opinion as it is backed up fact's.

I may not necessarily agree 100% with your conclusion but I will agree that housing supply can also be addressed via other solutions than just building.

I also recognise that to address these you would need a comprehensive housing plan that incentivised people to better utilise property which may be more difficult than building new properties.

beauf · 20-01-2021 06:10PM

schmittel wrote: »

EU.

70% of people live in houses that are too big for their needs. Twice the EU Average.

Only 3.2pc of the Irish population were classified as living in overcrowded households in 2019 - the EU average is 17.2%

https://www.independent.ie/business/personal-finance/property-mortgages/almost-7-in-10-people-in-ireland-are-living-in-homes-too-big-for-their-needs-39958654.html

I suspect thats because we have far more people in houses than apartements.

91.7 per cent of the population living in house

Probably we have a lot of rural houses, one off housing compared to the EU.

Marius34 · 20-01-2021 06:13PM

schmittel wrote: »

EU.

70% of people live in houses that are too big for their needs. Twice the EU Average.

Only 3.2pc of the Irish population were classified as living in overcrowded households in 2019 - the EU average is 17.2%

https://www.independent.ie/business/personal-finance/property-mortgages/almost-7-in-10-people-in-ireland-are-living-in-homes-too-big-for-their-needs-39958654.html

It's due to the dwelling types. It would be different if it would be based on square meters. Irish bedrooms are very small, living rooms too. Many families with kids live in 3 bed houses, which means they live in under-occupied property.
As well apartments typically has living room integrated with kitchen, which results in less rooms, versus the Irish typical property.

hometruths · 20-01-2021 06:14PM

beauf wrote: »

I suspect thats because we have far more people in houses than apartements.

Probably we have a lot of rural houses, one off housing compared to the EU.

No doubt there is a reason for it. But it still suggests we don’t need to build 30k new properties a year.

Timing belt · 20-01-2021 06:14PM

PropQueries wrote: »

It's most definitely additional supply in the sense that they weren't occupied for a minimum of 2 years previously and are now most likely occupied which means that's c. 2,000 less new build units required each year.

Yes they are vacant for 2 years because the banks held onto the properties after repossession. Just because they have entered the housing market does not mean no other properties exited with new repossessions. If you look at the actual figures there is minimal housing supply generated.
i.e.
Between 2011 and Q3 2020 14k properties entered the housing market after banks sold the properties. For the same period the banks took new possession of 15k properties. Source CBI

But, to me, it does raise the question. Is there a way to look at ESB connections and calculate how many of the vacant properties, housing estates etc. after the last bust have re-entered supply and then calculate (by a rough estimate) how many are still vacant?

if you are talking about Ghost estates etc then these are all counted separately by the ESB and 99% of that stock had re-entered the housing market by 2018
https://www.cso.ie/en/releasesandpublications/ep/p-ndc/newdwellingcompletionsq12018/ec/

hometruths · 20-01-2021 06:20PM

Marius34 wrote: »

It's due to the dwelling types. It would be different if it would be based on square meters. Irish bedrooms are very small, living rooms too. Many families with kids live in 3 bed houses, which means they live in under-occupied property.
As well apartments typically has living room integrated with kitchen, which results in less rooms, versus the Irish typical property.

And how would we rank if it was based on sq m?

Can you explain how a family with kids in a 3 bed house means they live in an under occupied property?

PropQueries · 20-01-2021 06:24PM

Timing belt wrote: »

Yes they are vacant for 2 years because the banks held onto the properties after repossession. Just because they have entered the housing market does not mean no other properties exited with new repossessions. If you look at the actual figures there is minimal housing supply generated.

if you are talking about Ghost estates etc then these are all counted separately by the ESB and 99% of that stock had re-entered the housing market by 2018
https://www.cso.ie/en/releasesandpublications/ep/p-ndc/newdwellingcompletionsq12018/ec/

Here's an interesting one IMO.

In 2017, the CSO recorded that 14,354 new residential units were completed.

From the ESB (link below), the number of connections from new dwellings, Unfinished housing estates and re-connections was 18,177.

I guess the point I'm making is that too many commentators are concentrating on new builds when there's other sources of supply that are helping to alleviate the so-called supply problem in the background and over a number of years it adds up to a significant number of additional supply in the market compared to just looking at new build completions.

Throw in probate sales (which to avoid argument I fully understand you object to) and the supply coming on stream over the past 5 years is significantly more than when just looking at new build figures.

Link ESB connections here: https://www.cso.ie/en/releasesandpublications/ep/p-ndc/newdwellingcompletionsq12018/ec/

And here's the only article I could find on potential probate sales each year in Ireland: https://www.thejournal.ie/probate-2-3870061-Feb2018/

Marius34 · 20-01-2021 06:37PM

schmittel wrote: »

And how would we rank if it was based on sq m?

Can you explain how a family with kids in a 3 bed house means they live in an under occupied property?

Because 3-4 people lives in 5 rooms house (3 bedrooms+1living+1dining). This is very common setup in Ireland, but not in other countries. In other countries most common setup is 3 rooms apartment (2 bedrooms + 1 living room integrated with dining). And bedroom typically are much bigger.

Timing belt · 20-01-2021 06:38PM

PropQueries wrote: »

Here's an interesting one IMO.

In 2017, the CSO recorded that 14,354 new residential units were completed.

From the ESB (link below), the number of connections from new dwellings, Unfinished housing estates and re-connections was 18,177.

Yes this is correct there were 2509 reconnections that year as the bank disposed of 2260 properties. At the same time the banks took 3413 new properties into repossession so in 2017 there was a reduction in supply by 1200 properties due to this.

In addition to the ESB reconnections there was 1364 Ghost houses etc were brought back to the market. (This was the last year such a large no were brought back and figures are down do 200/300 for a year now)

Net impact on housing stock for 2017 was an increase of 217 properties and not the 5k (or 2.5k) you are claiming.

This proves that you are over estimating supply when you pick and choose your stats.

PropQueries · 20-01-2021 06:40PM

But back to the big property news story of the day.

Glenveagh has sold their apartments in the Marina Village to the same fund that bought the Herbert Hill development in Dundrum... which means it's most likely social housing is coming to the Marina Village in Greystones IMO

2021 Irish Property Market chat - *mod warnings post 1*

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2021 Irish Property Market chat - mod warnings post 1