2021 Irish Property Market chat - mod warnings post 1

thefridge2006 · 03-03-2021 08:54AM

[PHP][/PHP]

combat14 wrote: »

looks like it is time to cut the dole, HAP payments, COVID payments and business supports the country simply afford all these payments at current rates and borrowing any more

serious crisis on the way if we dont tighten our belt

Fully agree. HAP is the biggest joke I've ever seen not to mention all the scamming that takes place on it. We really do live in the land of milk and honey

Wanderer78 · 03-03-2021 08:57AM

thefridge2006 wrote:

Fully agree. HAP is the biggest joke I've ever seen not to mention all the scamming that takes place on it. We really do live in the land of milk and honey

Absolutely, since we keep inflating property markets, and the funniest part of it is, the longer we play this game, the more taxes it's gonna take to try rectify the problem

Markitron · 03-03-2021 09:48AM

cnocbui wrote: »

This thread has become like the Sweden avoiding lockdown one. Same obsessive personalities at play.

Hasn't it always been like that?

Marius34 · 03-03-2021 09:50AM

thefridge2006 wrote: »

Exchequer deficit swells to €14bn as lockdown hits tax take

https://www.irishtimes.com/business/economy/exchequer-deficit-swells-to-14bn-as-lockdown-hits-tax-take-1.4499249

What happened the money they stuck in the piggy bank in a "worse case scenario super fund" to deal with the twin-threat posed by Covid-19 and Brexit

The truth is, they haven't a scoobies about what's going to happen and things are looking a lot worse than they first thought.

God only knows what's coming down the line. I feel sorry for people who are buying houses in the middle of all this at record prices. I just can't see how it makes sense but that's just me

Why it makes sense to Rent?
How come you so confident that the ones who bought recently are in worst position then the ones Renting?

PropQueries · 03-03-2021 10:06AM

According to the Irish Independent, the Minister for Housing has said that it's only the opposition that are against his affordable housing scheme:

"Speaking on RTE News at One yesterday, Minister Darragh O’Brien flatly denied there had been a notable level of criticism directed at the scheme, other than from the usual suspects. “There hasn’t actually been a lot of criticism, there has been some predictable criticism from the political side – the opposition,”

The article goes on to say:

"To date, the Economic and Social Research Institute (ESRI), the Central Bank, the Institute of Professional Auctioneers and Valuers (IPAV), and a former secretary-general of the Department of Public Expenditure and Reform (DPER) have all criticised the Government’s proposed shared equity scheme."

Link to article in Irish Independent today: https://www.independent.ie/opinion/comment/government-ploughing-on-with-affordable-homes-scheme-despite-what-experts-say-40151749.html

PropQueries · 03-03-2021 10:27AM

combat14 wrote: »

looks like it is time to cut the dole, HAP payments, COVID payments and business supports the country simply afford all these payments at current rates and borrowing any more

serious crisis on the way if we dont tighten our belt

Not sure cutting dole is either a wise move or would save the country much. Dole doesn't cost us much as a percentage of overall government expenditure and there's the social cohesion aspect to think of as well IMO, especially since many are not actually claiming dole, but their insurance i.e. PRSI. We would probably save more money by cutting grants to e.g. farmers.

Cutting PUP payments wouldn't impact the government expenditure either as that's primarily paid from the pre-covid surplus in the PRSI fund which was funded by the very same workers the state put out of work to begin with.

While I am against HAP since I learned what it really was, cutting it now would only hurt the most vulnerable i.e. tenants, who have little to no bargaining power and it is especially wrong to cut HAP now given that it was Government policy that drove rents up to unaffordable levels in the first place.

I would also be against cutting supports to the business sector given that it was the state who forced them to close to begin with. Hardly their fault.

I think we should start by looking at why the Government thought now was the right time to agree pay rises for the public sector IMO

MacronvFrugals · 03-03-2021 10:29AM

PropQueries wrote: »

According to the Irish Independent, the Minister for Housing has said that it's only the opposition that are against his affordable housing scheme:

"Speaking on RTE News at One yesterday, Minister Darragh O’Brien flatly denied there had been a notable level of criticism directed at the scheme, other than from the usual suspects. “There hasn’t actually been a lot of criticism, there has been some predictable criticism from the political side – the opposition,”

The article goes on to say:

"To date, the Economic and Social Research Institute (ESRI), the Central Bank, the Institute of Professional Auctioneers and Valuers (IPAV), and a former secretary-general of the Department of Public Expenditure and Reform (DPER) have all criticised the Government’s proposed shared equity scheme."

Link to article in Irish Independent today: https://www.independent.ie/opinion/comment/government-ploughing-on-with-affordable-homes-scheme-despite-what-experts-say-40151749.html

Elain Loughlin from the IE described well the plan to plough ahead with the scheme despite all the criticism

"Confidence can be a virtue, but blind self-belief is not."

https://www.irishexaminer.com/opinion/commentanalysis/arid-40235960.html

johnnyskeleton · 03-03-2021 10:40AM

PropQueries wrote: »

According to the Irish Independent, the Minister for Housing has said that it's only the opposition that are against his affordable housing scheme:

Eoghan O Broin is making the point that this will interefere with supply and demand and artificially increase house prices. When SF are the ones advocating for a freer market and less government intervention in popular causes, something is amiss.

My prediction for the affordable housing scheme is that they will introduce it, but they will make it very difficulty to access. They might say that it only applies to houses where the building commenced in or after 2021 for example, or they will insist on the government shared equity being the first charge, thus making it unattractive for banks to lend money.

My simple solution to all of this is for the government to provide funding directly to builders to build new houses and have a profit sharing scheme with them and an undertaking to cover any losses they suffer. That is the best way to increase supply without causing dramatic distortions in the price paid by buyers.

jill_valentine · 03-03-2021 10:41AM

thefridge2006 wrote: »

God only knows what's coming down the line. I feel sorry for people who are buying houses in the middle of all this at record prices. I just can't see how it makes sense but that's just me

Because getting out of being a renter in this country is an "at all costs" priority. Whatever happens in the next ten years, I would rather be struggling with a mortgage payment than meeting rent.

PropQueries · 03-03-2021 10:48AM

johnnyskeleton wrote: »

Eoghan O Broin is making the point that this will interefere with supply and demand and artificially increase house prices. When SF are the ones advocating for a freer market and less government intervention in popular causes, something is amiss.

My prediction for the affordable housing scheme is that they will introduce it, but they will make it very difficulty to access. They might say that it only applies to houses where the building commenced in or after 2021 for example, or they will insist on the government shared equity being the first charge, thus making it unattractive for banks to lend money.

My simple solution to all of this is for the government to provide funding directly to builders to build new houses and have a profit sharing scheme with them and an undertaking to cover any losses they suffer. That is the best way to increase supply without causing dramatic distortions in the price paid by buyers.

I get your point. But if developers can build and sell 3 bed semi detached units in the midlands for under €250k (incl. site, VAT, profit margins etc.), that means the c. €100k the state is lending to the purchaser in Dublin is basically a €100k loan to cover the cost of the site i.e. it's a direct subsidy to landowners.

Maybe such a scheme would make sense in pre-China Hong Kong but there's nothing but fields in Co. Dublin so there's obviously no shortage of land to build on.

And the only reason a site cost is so expensive in Dublin to begin with is that the state continues to restrict the overall supply of building land through the planning permission process and gave it that value through the granting of planning permission. That same site currently worth c. €100k in Co. Dublin is probably only worth c. €10k (agri. value) without the state granting them this permission i.e. a stamped piece of paper.

DellyBelly · 03-03-2021 10:52AM

PropQueries wrote: »

I think we should start by looking at why the Government thought now was the right time to agree pay rises for the public sector IMO

I agree although since it includes nurses and other frontline staff I can't see them reversing it. The optics would be awful

johnnyskeleton · 03-03-2021 10:56AM

PropQueries wrote: »

I get your point. But if developers can build and sell 3 bed semi detached units in the midlands for under €250k (incl. site, VAT, profit margins etc.), that means the c. €100k the state is lending to the purchaser in Dublin is basically a €100k loan to cover the cost of the site i.e. it's a direct subsidy to landowners.

Maybe such a scheme would make sense in pre-China Hong Kong but there's nothing but fields in Co. Dublin so there's obviously no shortage of land to build on.

And the only reason a site cost is so expensive in Dublin to begin with is that the state continues to restrict the overall supply of building land through the planning permission process and gave it that value through the granting of planning permission. That same site currently worth c. €100k in Co. Dublin is probably only worth c. €10k (agri. value) without the state granting them this permission i.e. a stamped piece of paper.

Well a scheme where the government provide funding to build houses in areas that need housing. They could then sell the houses privately and have a profit share and then reinvest in other houses, or undertake to buy them at cost as social houses.

So for example, between site and building costs if a house in the suburbs of Dublin cost €450k:

A. They sell it for €500k, developer takes €25k of the profit and the govt takes the other €25.
B. They sell it for €450k. No profit, but you took a gamble and broke even, no harm done.
C. They can't sell it for €450k, so the govt buys it as social housing.

However bad all of the above sounds, it's no worse than the current system where the government subsidises private house building and buys in private developments as social housing, but this way the government has some control over what is built, is likely to see some return on their investment and it also guarantees that houses which might otherwise not be built, will be built.

They could also provide grants and tax breaks to companies willing to relocate from high demand areas to lower demand areas, maybe fill up a few ghost estates instead of bulldozing them.

It's a sort of least worst variant on how the government should intervene. Their coctail of interventions to date are just making property prices more expensive. Then again, maybe that is the real reason behind the government interventions - to support the propertied class rather than to actually solve the housing crisis.

fliball123 · 03-03-2021 10:56AM

Deleted User wrote: »

Banks leaving/closing branches.Third bank anounced changes.
It does not look that economy will recover and there will be bussiness as usual.
The banks representatives could say what they want but things does not look good.
Very bad signs.

I think you will find that this will be happening globally as WFH is on the up why would a large company need so many outlets when it can all be done on line as in buying, selling and working

Villa05 · 03-03-2021 10:59AM

PropQueries wrote: »

According to the Irish Independent, the Minister for Housing has said that it's only the opposition that are against his affordable housing scheme:

"Speaking on RTE News at One yesterday, Minister Darragh O’Brien flatly denied there had been a notable level of criticism directed at the scheme, other than from the usual suspects. “There hasn’t actually been a lot of criticism, there has been some predictable criticism from the political side – the opposition,”

The article goes on to say:

"To date, the Economic and Social Research Institute (ESRI), the Central Bank, the Institute of Professional Auctioneers and Valuers (IPAV), and a former secretary-general of the Department of Public Expenditure and Reform (DPER) have all criticised the Government’s proposed shared equity scheme."

Link to article in Irish Independent today: https://www.independent.ie/opinion/comment/government-ploughing-on-with-affordable-homes-scheme-despite-what-experts-say-40151749.html

Here is the Construction industry federations take on the scheme, judging by the interview it is guarenteed that the scheme will lead to price appreciation based on his supply predictions for the coming years

Villa05 · 03-03-2021 11:05AM

Regular source of dispute here:

David McWilliams talks through why he believes that we need 50,000 units built per year in the last 12 minutes of this podcast: How Ireland really works

PropQueries · 03-03-2021 11:08AM

johnnyskeleton wrote: »

Well a scheme where the government provide funding to build houses in areas that need housing. They could then sell the houses privately and have a profit share and then reinvest in other houses, or undertake to buy them at cost as social houses.

So for example, between site and building costs if a house in the suburbs of Dublin cost €450k:

A. They sell it for €500k, developer takes €25k of the profit and the govt takes the other €25.
B. They sell it for €450k. No profit, but you took a gamble and broke even, no harm done.
C. They can't sell it for €450k, so the govt buys it as social housing.

However bad all of the above sounds, it's no worse than the current system where the government subsidises private house building and buys in private developments as social housing, but this way the government has some control over what is built, is likely to see some return on their investment and it also guarantees that houses which might otherwise not be built, will be built.

They could also provide grants and tax breaks to companies willing to relocate from high demand areas to lower demand areas, maybe fill up a few ghost estates instead of bulldozing them.

It's a sort of least worst variant on how the government should intervene. Their coctail of interventions to date are just making property prices more expensive. Then again, maybe that is the real reason behind the government interventions - to support the propertied class rather than to actually solve the housing crisis.

But that's the thing. Cairn Homes average selling price last year was c. €350k and Glenveagh's average selling prince was c. €311k. And that included site costs, VAT, profit margins etc. etc.

Many new builds in the midlands are currently asking under c. €250k and last year in Co. Waterford they were selling two bed a-rated terraced units for c. €160k.

I don't understand where people pull figures of €500k, €450k or €400k that developers need to break even. Cairn Homes and Glenveagh are not just breaking even, but making decent profits by building and selling their new build units in and around Co. Dublin for an average of under €350k at the moment.

fliball123 · 03-03-2021 11:10AM

PropQueries wrote: »

But that's the thing. Cairn Homes average selling price last year was c. €350k and Glenveagh's average selling prince was c. €311k. And that included site costs, VAT, profit margins etc. etc.

Many new builds in the midlands are currently asking under c. €250k and last year in Co. Waterford they were selling two bed a-rated terraced units for c. €160k.

I don't understand where people pull figures of €500k, €450k or €400k that developers need to break even. Cairn Homes and Glenveagh are not just breaking even, but making decent profits by building and selling their new build units in and around Co. Dublin for an average of under €350k at the moment.

If this is the case why isn't the government using them? Is there anything out there that would stop them from using these companies?

PropQueries · 03-03-2021 11:12AM

fliball123 wrote: »

If this is the case why isn't the government using them? Is there anything out there that would stop them from using these companies?

That's not "if this is the case". That's in their actual 2020 reports to their investors

Villa05 · 03-03-2021 11:14AM

Almost two-thirds of Nama homes offered for social housing 'lost to private sector'

Figures obtained by the Irish Examiner show that in some counties — Limerick, Meath, and South Dublin — upwards of four out of every five, or 80%, of houses offered by Nama were not taken up for social housing.

In Limerick City and County, only 32 of 166 homes identified were taken up by the local authority, while in Meath only 39 of 236 homes identified were accepted, meaning 197 or 83% were not secured.

For Cork City, the documents show that Nama offered 470 properties with just 157 taken up, leaving 313 (66%) behind, while in Cork County a total of 849 properties were offered but just 357 were taken — 492 (57%) were unwanted.

A bit of good journalism would be an investigation in to how many of these same houses were procured through HAP or long term leases from investment funds as most NAMA sales were done in bulk to investment funds

fliball123 · 03-03-2021 11:24AM

PropQueries wrote: »

That's not "if this is the case". That's in their actual 2020 reports to their investors

I am not doubting you I am asking the question if this is the case why are they not using them.

Cyrus · 03-03-2021 11:25AM

PropQueries wrote: »

But that's the thing. Cairn Homes average selling price last year was c. €350k and Glenveagh's average selling prince was c. €311k. And that included site costs, VAT, profit margins etc. etc.

Many new builds in the midlands are currently asking under c. €250k and last year in Co. Waterford they were selling two bed a-rated terraced units for c. €160k.

I don't understand where people pull figures of €500k, €450k or €400k that developers need to break even. Cairn Homes and Glenveagh are not just breaking even, but making decent profits by building and selling their new build units in and around Co. Dublin for an average of under €350k at the moment.

hang on

did you look at the glenveagh annual report?

they made a decent loss

also cairn and glenveagh are sitting on super cheap landbanks hoovered up between 2012 and 2014, if you were starting right now and needed to buy a site to build in dublin the prices being mentioned make sense.

PropQueries · 03-03-2021 11:26AM

fliball123 wrote: »

I am not doubting you I am asking the question if this is the case why are they not using them.

That's quite literally the €1 Billion question

PropQueries · 03-03-2021 11:30AM

Cyrus wrote: »

hang on

did you look at the glenveagh annual report?

they made a decent loss

also cairn and glenveagh are sitting on super cheap landbanks hoovered up between 2012 and 2014, if you were starting right now and needed to buy a site to build in dublin the prices being mentioned make sense.

Which is my original point. The c. €100k the state wants to lend home buyers to buy a home in Dublin is just a direct subsidy to landowners.

Obviously without this scheme, the developer would need to sell their new built homes for c. €100k less in the private market and buy the site for cheaper.

If they overpaid for the land, that is not the taxpayers fault and we have various methods to deal with such developers i.e. liquidation etc.

If I open a jean selling shop and overpay for the jeans, the Government doesn't come in and offer to pay a third of the cost of the jeans for anyone interested in buying them. No, I go bankrupt. Same should apply to developers IMO

HansKroenke · 03-03-2021 12:19PM

PropQueries wrote: »

Which is my original point. The c. €100k the state wants to lend home buyers to buy a home in Dublin is just a direct subsidy to landowners.

Obviously without this scheme, the developer would need to sell their new built homes for c. €100k less in the private market and buy the site for cheaper.

If they overpaid for the land, that is not the taxpayers fault and we have various methods to deal with such developers i.e. liquidation etc.

If I open a jean selling shop and overpay for the jeans, the Government doesn't come in and offer to pay a third of the cost of the jeans for anyone interested in buying them. No, I go bankrupt. Same should apply to developers IMO

This capitalist talk has no place in an Irish housing market discussion.

Graham · 03-03-2021 12:41PM

PropQueries wrote: »

The c. €100k the state wants to lend home buyers to buy a home in Dublin is just a direct subsidy to landowners.

Obviously without this scheme, the developer would need to sell their new built homes for c. €100k less in the private market and buy the site for cheaper.

Only if you're working from the obviously flawed assumption that the houses wouldn't sell for the same price without the scheme.

Villa05 · 03-03-2021 01:41PM

Marius34 wrote:

Why it makes sense to Rent? How come you so confident that the ones who bought recently are in worst position then the ones Renting?

I think both situations are dire. Overpriced housing in a country with massive debt and costly future issues such as health and pensions or even higher rents
Every bubble needs a bit of a push factor to help it blow larger

Rents are that factor and will continue to be unless supply is addressed. If supply is not addressed it will be an added factor as well as health and pensions.
Home owners and renters will then have to pay much higher taxes in the future to cover these 3 issues amongst others

It all could be so very different, we could run the country in a way that helps our citizens or continue to pander to landowner interests to the detriment of everyone else including home owners

Graham wrote:

Only if you're working from the obviously flawed assumption that the houses wouldn't sell for the same price without the scheme.

There's a show on rte called how to be good with money where the presenter uses sugar cubes to explain financial conundrums to viewers

If sugar cubes are used to purchase houses and you give customers more sugar cubes for this specific purpose. What do you think happens houses where supply is restricted

Do you think they need more less or the same amount

hometruths · 03-03-2021 01:44PM

Graham wrote: »

Only if you're working from the obviously flawed assumption that the houses wouldn't sell for the same price without the scheme.

Are you saying you think the scheme will have no impact on prices?! That seems a pretty obviously flawed assumption to me (and the ESRI, Central Bank etc etc)

thefridge2006 · 03-03-2021 01:56PM

jill_valentine wrote: »

Because getting out of being a renter in this country is an "at all costs" priority. Whatever happens in the next ten years, I would rather be struggling with a mortgage payment than meeting rent.

This is all down to terrible government policies such as HAP. This scheme has done nothing but pump up rent and is still pumping it up. FFFG have done absolutely nothing to help the housing situation and i would go as far as saying if they did nothing for the last 10 years we'd be in a better posit6ion with regards to rental prices and selling prices. They are so incompetent

cnocbui · 03-03-2021 01:58PM

Markitron wrote: »

Hasn't it always been like that?

Both threads are dominated by a single individual, and no, it hasn't always been that way on this thread.

fliball123 · 03-03-2021 02:30PM

Villa05 wrote: »

I think both situations are dire. Overpriced housing in a country with massive debt and costly future issues such as health and pensions or even higher rents
Every bubble needs a bit of a push factor to help it blow larger

Rents are that factor and will continue to be unless supply is addressed. If supply is not addressed it will be an added factor as well as health and pensions.
Home owners and renters will then have to pay much higher taxes in the future to cover these 3 issues amongst others

It all could be so very different, we could run the country in a way that helps our citizens or continue to pander to landowner interests to the detriment of everyone else including home owners

There's a show on rte called how to be good with money where the presenter uses sugar cubes to explain financial conundrums to viewers

If sugar cubes are used to purchase houses and you give customers more sugar cubes for this specific purpose. What do you think happens houses where supply is restricted

Do you think they need more less or the same amount

Your first sentence is wrong overpriced housing in the highly sought after areas in the country..Please stop extrapolation Dublin prices for the rest of the country. Also we have discussed the opinion that we are currently in a bubble with relation to house prices, you are yet to prove that we are currently in one. People have been shouting bubble since 2017 and the price of houses have not shown the same trajectory of being in bubble territory.

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

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2021 Irish Property Market chat - mod warnings post 1