2021 Irish Property Market chat - mod warnings post 1

Bass Reeves · 23-04-2021 09:30AM

Villa05 wrote: »

Developers will build where they own/hoard the land. If your hoarding land the current system suits you

Planning is a function of government/councils. Pick sites that are appropriate for high rise with adequate services

Developers build where they can get planning permission and where the houses or apartments they build will turn a profit.

If you have 20 or 50 million to spend on a site you will buy the site that will take the least amount of time to get planning and develop. After that you must consider when you build on it will there be demand for the product you supply.
Developers have sites all over the place it's getting planning is the issue often. They will concentrate on where they can develop and build and try and track the other sites through the system over time

PropQueries · 23-04-2021 09:40AM

Bass Reeves wrote: »

Developers build where they can get planning permission and where the houses or apartments they build will turn a profit.

If you have 20 or 50 million to spend on a site you will buy the site that will take the least amount of time to get planning and develop. After that you must consider when you build on it will there be demand for the product you supply.
Developers have sites all over the place it's getting planning is the issue often. They will concentrate on where they can develop and build and try and track the other sites through the system over time

I'd agree that developers generally want to build. But some of the figures they put out on site costs to justify the end selling/leasing prices to the councils are not very realistic IMO.

The councils should know that many of the sites were purchased for a fraction of current "market prices" just a few years ago and shouldn't allow "current market site costs" to justify whatever end selling/leasing prices they agree to. The state gave these sites their value by the granting or extension of planning permission to begin with.

But, then again, as reported two weeks ago, "Dún Laoghaire-Rathdown County Council signed 25-year lease on 87 Dundrum apartments for use as social housing without seeking opinion other than developer’s on rent levels".

L1011 · 23-04-2021 09:42AM

PropQueries wrote: »

And, they can't use this process for housing?

Link to article here: https://www.breakingnews.ie/ireland/sandymount-cycleway-council-decided-work-did-not-require-planning-permission-1115851.html

No, because there is a list of what types of things are exempted and they can only make a decision on whether something meets that list or not.

Housing is not on it.

Villa05 · 23-04-2021 09:46AM

hmmm wrote:

Government and politicians from every party support a system where people who live in the city centre can oppose development because it might "overshadow them" or "ruin the skyline". Meanwhile young families and young renters are pushed to the outskirts of the city, and are forced to commute for hours every day.

hmmm wrote:

The city is withering away, and WFH will make it worse, and it's places on the outskirts of the city which will be the ones to benefit.

Hard to disagree with anything you've said here which is why Dublin needs to identify 2 to 3 districts that are appropriate for high rise. Put forward the case to the public and choose the best site(s). The player wills site and this site we are talking about this morning seem very odd for the existing infrastructure in the respective areas. The objections do seem to have significant merit

With regard to the rest of Dublin that is withering. Impose a detterent tax on vacancy and a carrot scheme to restore properties to a habitable condition not just for social but moreso for private rentals especially key workers in the area.
Surely restoring existing properties would be far cheaper than knocking and rebuilding especially in the city centre

PropQueries · 23-04-2021 09:46AM

L1011 wrote: »

No, because there is a list of what types of things are exempted and they can only make a decision on whether something meets that list or not.

Housing is not on it.

So, maybe all housing issues can be resolved by opening up that sacred word document and adding ",housing".

fliball123 · 23-04-2021 09:55AM

schmittel wrote: »

Ok I'll explain my logic. According to CB there are approx 100k PDH mortgages in arrears of over 1 year or restructured. These are the houses that should be repoed.

Taking average occupancy of 2.75 per household that is 275,000 people that would require housing support.

Best source I can find for current levels of housing support is a UCD paper which indicates that currently there are about 250,000 supported tenants via the various schemes.

I think it is utterly implausible that the true figure of people in this country who require housing support is double the already high number.

I think it is far more likely that some of this cohort are perfectly capable of supporting their own housing needs, but in the absence of having to do so they chose to spend their money on other things.

And this is back of the envelope stuff assuming the properties and households are broadly similiar. Once you start considering a number of them will be couples in 5 bed high value homes, the idea that repoing is a zero sum game is even more ridiculous.

But lets assume you're correct and the true figure of people in Ireland who cannot afford to provide their own housing is over 500,000 - in that scenario our current high priced market is built on very shaky fundamentals and sooner or later the truth will out.

Either way we are storing up even bigger problems for the future by not tacking arrears/repossessions head on when the problem started to get serious.

Look I think anything over a certain number of months where the homeowner has not paid their mortgage the house should be repo'd I think your still trying go have a go at me (not sure) but I am actually agreeing with you. I did the simple math of one FAMILY being turfed out of the FAMILY HOME will be (currently the way the system is) for not being able to afford the mortgage ergo they wont be able to afford the rent or a new mortgage (also their credit rating would be blown out of the water for any loan in the forseeable future). Now there will be some who are strategic defaulters and may have lots of money and are probably saving a lot of cash and when the house gets repo'd they may well be in a position to buy out right, but once again its one house taken away and a house bought. So if they are not strategic and they get thrown out they need to be housed.

I think you are breaking it down into an individual level I am leaving it at family level as even if there is a 5/6/7 bed house that has been repo's and put up for sale more than likely only one family will go in and there might be only 2 or 3 people in that family unit and there could well be a family of 5/6 coming out.

There are too many variables to measure this which is why the simplest and mode reasonable equation would be one family has the house repossessed a family buys it and moves in and now the family who have been turfed out will need to be housed. The people within the family unit may be different but the number of houses needed is still the same.

Hubertj · 23-04-2021 09:56AM

Villa05 wrote: »

Developers will build where they own/hoard the land. If your hoarding land the current system suits you

Planning is a function of government/councils. Pick sites that are appropriate for high rise with adequate services

Why are you not mentioning NIMBYs in your rant? Significant contribution to the issues. And incompetent public servants.

Bass Reeves · 23-04-2021 10:00AM

PropQueries wrote: »

I'd agree that developers generally want to build. But some of the figures they put out on site costs to justify the end selling/leasing prices to the councils are not very realistic IMO.

The councils should know that many of the sites were purchased for a fraction of current "market prices" just a few years ago and shouldn't allow "current market site costs" to justify whatever end selling/leasing prices they agree to. The state gave these sites their value by the granting or extension of planning permission to begin with.

But, then again, as reported two weeks ago, "Dún Laoghaire-Rathdown County Council signed 25-year lease on 87 Dundrum apartments for use as social housing without seeking opinion other than developer’s on rent levels".

In any business where the time between purchase and sale is lengthy in time you gave to factor replacement costs not purchase cost.

If a developer has a site that cost 10 million that he can develop 200 houses on if he factors in 50k/site that means he has 10 million to purchase next site. However if the replacement site is making 30 million he cannot afford to purchase it. Therefore he has to factor in his replacement site cost of 150k/house.

As most sites are leaveraged the developer has to factor in interest costs as well he needs the percentage value of the new site that a bank/investor will require to fund the rest of the development

The_Conductor · 23-04-2021 10:01AM

Villa05 wrote: »

If they wanted to help the low paid, (or any worker or employer) sorting the housing shortage would be where you would start

Negative only HAP reviews, seeing as the government are the renter of last resort, would immediately create a disincentive for institutional landlords to milk the HAP system.

Some rules limiting the percentage of properties to a set number or a set percentage that could be sold to any single purchaser in new developments- would also be damn helpful (particularly for FTBs).

There is lots that could be done- but moving property out of the rental, or prospective rental, sector and into the market for prospective purchasers- has to be something that critically needs to be addressed- along with making HAP less attractive, particularly to institutional investors.

I'm still in favour of imposing a specific levy, as opposed to a 'tax', on the rental sector- perhaps of 25 or 30% of gross rental income- which would immediately weed out people/companies/REITs who are deliberately loading debt onto rental properties (and sure, why wouldn't you- when the cost of the debt is wholly deductible as an allowable cost against pre-tax income).

The other thing I'd do- is make annual management charges for those living in MUDs wholly deductible against property tax and residential tax- and impose a whole new residential tax on residents of all domestic dwellings.

We need new revenue streams within the next 24-30 months, we could always pull the same stunt again and invite the IMF in to come up with a voluntary programme for us- so the politicians could claim it was imposed on us, rather than something that they were too gormless to come up with. We've already done it once- when we were the only country globally not in an IMF bailout who invited them in for a voluntary programme- from the perspective of the politicians there is a certain degree of preference for having a scapegoat.

L1011 · 23-04-2021 10:05AM

PropQueries wrote: »

So, maybe all housing issues can be resolved by opening up that sacred word document and adding ",housing".

Its primary legislation, not a word document.

Overly simplistic ideas and random guesswork are not solutions.

handlemaster · 23-04-2021 10:27AM

Having a looking on the property websites. It looks as if thr floor in Dublin prices is going to be around 300k. We have some along way from 2008

hometruths · 23-04-2021 10:32AM

fliball123 wrote: »

Look I think anything over a certain number of months where the homeowner has not paid their mortgage the house should be repo'd I think your still trying go have a go at me (not sure) but I am actually agreeing with you. I did the simple math of one FAMILY being turfed out of the FAMILY HOME will be (currently the way the system is) for not being able to afford the mortgage ergo they wont be able to afford the rent or a new mortgage (also their credit rating would be blown out of the water for any loan in the forseeable future). Now there will be some who are strategic defaulters and may have lots of money and are probably saving a lot of cash and when the house gets repo'd they may well be in a position to buy out right, but once again its one house taken away and a house bought. So if they are not strategic and they get thrown out they need to be housed.

I think you are breaking it down into an individual level I am leaving it at family level as even if there is a 5/6/7 bed house that has been repo's and put up for sale more than likely only one family will go in and there might be only 2 or 3 people in that family unit and there could well be a family of 5/6 coming out.

There are too many variables to measure this which is why the simplest and mode reasonable equation would be one family has the house repossessed a family buys it and moves in and now the family who have been turfed out will need to be housed. The people within the family unit may be different but the number of houses needed is still the same.

i'm not trying to have a go at you, I just think it is naive to believe that every house in arrears (or even the vast majority of them) will require state support.

And it is an argument that is used to justify the current situation which is crazy.

And as I say, if it is true that every house in arrears actually needs housing support then we are truly f*cked. Our much vaunted economy is actually a basket case.

Wanderer78 · 23-04-2021 10:32AM

PropQueries wrote: »

“Multiple epicentres”. Good point and haven’t really looked at it like that. Last time it was just property.

Now, it’s property, government debt, pension timebombs, global tax reform and climate change costs.

All pre-flagged for the past several years and nothing done and will most likely cost us a multiple of the last bailout.

These would be difficult enough to pay for even if our national debt was zero and our pensions were fully funded. Read a few weeks ago how the Danish and Dutch pensions are some of the best funded in the world.

We most definitely are not all in this together and we’ve really landed ourselves in it this time IMO

All that additional debt over the past 10 years and we really have nothing to show for it.

to be honest, im more concerned about the continual destabilization occurring globally, politically, economically, socially and environmentally.

we truly need to move on from this idea that public debt is a bad thing, its clearly obvious by now, its not really, private debt is by far the more dangerous, as 08 showed us, and is slowly starting to raise its ugly head, again! yup, pension funds certainly are becoming a serious issue, under current rising costs of living, our current approach to such funds aint gonna cut it. oh and climate change reforms are not a 'cost', theyre actually urgently required for our survivability as a species, but under current political, economic ideologies and structures, we re set to wreck that to.

funnily enough, if we all paid off our national debts, it would more than likely lead to a catastrophic economic crash, as we d significantly reduce the money supply, forcing it entirely over into the private sector, and its money supply, i.e. credit!

so, fun times!!!!

Villa05 · 23-04-2021 10:39AM

Hubertj wrote:

Why are you not mentioning NIMBYs in your rant? Significant contribution to the issues. And incompetent public servants.

I'm a little puzzled on the NIMBYS theory, yes of course it exists, but how come it can be bypassed in the player wills and Carrickmines site where there are very valid reasons for objections.

If it can be overcome at these sites what could possibly be the issue with high rise in an area that may be much more logical and appropriate for high rise with an abundance of the required services close to work centres, parks etc

fliball123 · 23-04-2021 10:43AM

schmittel wrote: »

i'm not trying to have a go at you, I just think it is naive to believe that every house in arrears (or even the vast majority of them) will require state support.

And it is an argument that is used to justify the current situation which is crazy.

And as I say, if it is true that every house in arrears actually needs housing support then we are truly f*cked. Our much vaunted economy is actually a basket case.

How is it naive look at what I am saying I am talking about the point at which a property is repo'd? When they are repo'd anyway you dice this its zero sum for the stock of houses available to Joe Public. Anyone who gets a house repossessed will fall into ont of the 2 below categories.

Strategic defaulters - Probably saved enough money to buy outright. So one house is gained by the property market from the repo and one lost from the by them buying from the property market.

People who cant afford the mortgage - If they cant afford their mortgage they sure as hell will not afford the rents. Average rents are a lot higher than the average mortgage. Even if they are working they will not be able to borrow due to their credit rating and will have to be housed by the state. So one house gained by the property market from the repo and one lost due to our ridiculously left leaning attitude to housing and this family will be housed so house taken away from the social housing stock.

Its naive to think that rich or poor when put in a situation where you cant get access to a house or when the banks come knocking to repossess that everyone will have to be taken out kicking and screaming. You only have to look at the whole "gorse hill" house situation and how that unfolded to give you a taster of how the rich are using the same techniques as the poor to stop their mansions from being repossessed

timmyntc · 23-04-2021 10:46AM

Wanderer78 wrote: »

to be honest, im more concerned about the continual destabilization occurring globally, politically, economically, socially and environmentally.

we truly need to move on from this idea that public debt is a bad thing, its clearly obvious by now, its not really, private debt is by far the more dangerous, as 08 showed us, and is slowly starting to raise its ugly head, again! yup, pension funds certainly are becoming a serious issue, under current rising costs of living, our current approach to such funds aint gonna cut it. oh and climate change reforms are not a 'cost', theyre actually urgently required for our survivability as a species, but under current political, economic ideologies and structures, we re set to wreck that to.

funnily enough, if we all paid off our national debts, it would more than likely lead to a catastrophic economic crash, as we d significantly reduce the money supply, forcing it entirely over into the private sector, and its money supply, i.e. credit!

so, fun times!!!!

Public debt is grand until it has to be paid back. Current and past govts have not had this idea that public debt is intrinsically bad, but you have to factor in your ability to repay. As it stands, the Irish state would be doing very well to ever repay the debt it has outstanding right now.
By end of 2021 we will have a debt to GNI ratio of about 115%. The "positives" from exchequer POV is that our debts have a long maturity and arent due to be repaid for a long time - basically theyve kicked the can down the road in the hope that Ireland inc. is back in the good times in 10 years time.

With corporation tax shortfall looking possible in the medium term, aswell as more health spending necessary for the covid aftermath, and a very dysfunctional property market - the state will have to tighten its belt and reign in the spending. They cannot borrow themselves out of this mess of public debt - and they will struggle in future to borrow for infrastructure and other investments, which will have a negative impact on our future growth.

Mic 1972 · 23-04-2021 10:49AM

handlemaster wrote: »

Having a looking on the property websites. It looks as if thr floor in Dublin prices is going to be around 300k. We have some along way from 2008

I'd say we are back at 2007 prices by now

fliball123 · 23-04-2021 10:51AM

Mic 1972 wrote: »

I'd say we are back at 2007 prices by now

Still a good 20% off 2007

Wanderer78 · 23-04-2021 10:55AM

timmyntc wrote: »

Public debt is grand until it has to be paid back. Current and past govts have not had this idea that public debt is intrinsically bad, but you have to factor in your ability to repay. As it stands, the Irish state would be doing very well to ever repay the debt it has outstanding right now.
By end of 2021 we will have a debt to GNI ratio of about 115%. The "positives" from exchequer POV is that our debts have a long maturity and arent due to be repaid for a long time - basically theyve kicked the can down the road in the hope that Ireland inc. is back in the good times in 10 years time.

With corporation tax shortfall looking possible in the medium term, aswell as more health spending necessary for the covid aftermath, and a very dysfunctional property market - the state will have to tighten its belt and reign in the spending. They cannot borrow themselves out of this mess of public debt - and they will struggle in future to borrow for infrastructure and other investments, which will have a negative impact on our future growth.

yes, we need to get over this inherent fear of deficits, because running an economy on excess credit clearly doesnt work! we need to push this need of growing the money supply out into the public balance sheets, and not become as reliant on the private sector money supply, i.e. credit. yes, long term bonds are the way forward, it allows us time to effectively grow our way out of this debt, effectively repayments look after themselves in the long run, as we service these new long term debts, by doing so.

and again, all this waist watching is pure nonsense, we dont need to do this, this is in fact dangerous for our recovery, as tightening the public money supply, the deficit, forces the need to expand our money supply back out into the only place it can go, i.e. the private sector, and its money supply, i.e. credit! i.e. you borrow now, as much as your economy can take, to try kick start the economy, in particular the private sector, as this is where the majority of our capacity and capabilities are, this belt tightening stuff is lethal during such crisis

MacronvFrugals · 23-04-2021 11:03AM

Wanderer78 wrote: »

yes, we need to get over this inherent fear of deficits, because running an economy on excess credit clearly doesnt work! we need to push this need of growing the money supply out into the public balance sheets, and not become as reliant on the private sector money supply, i.e. credit. yes, long term bonds are the way forward, it allows us time to effectively grow our way out of this debt, effectively repayments look after themselves in the long run, as we service these new long term debts, by doing so.

and again, all this waist watching is pure nonsense, we dont need to do this, this is in fact dangerous for our recovery, as tightening the public money supply, the deficit, forces the need to expand our money supply back out into the only place it can go, i.e. the private sector, and its money supply, i.e. credit! i.e. you borrow now, as much as your economy can take, to try kick start the economy, in particular the private sector, as this is where the majority of our capacity and capabilities are, this belt tightening stuff is lethal during such crisis

People still believe it was the austerity post 2011 that allowed us to recover when in reality it was Draghi saying the ECB will do "whatever it takes" to save the euro thus giving the green light to investors

JimmyVik · 23-04-2021 11:05AM

Mic 1972 wrote: »

I'd say we are back at 2007 prices by now

Probably only a couple of years off 2010 prices now

PropQueries · 23-04-2021 11:09AM

timmyntc wrote: »

Public debt is grand until it has to be paid back. Current and past govts have not had this idea that public debt is intrinsically bad, but you have to factor in your ability to repay. As it stands, the Irish state would be doing very well to ever repay the debt it has outstanding right now.
By end of 2021 we will have a debt to GNI ratio of about 115%. The "positives" from exchequer POV is that our debts have a long maturity and arent due to be repaid for a long time - basically theyve kicked the can down the road in the hope that Ireland inc. is back in the good times in 10 years time.

With corporation tax shortfall looking possible in the medium term, aswell as more health spending necessary for the covid aftermath, and a very dysfunctional property market - the state will have to tighten its belt and reign in the spending. They cannot borrow themselves out of this mess of public debt - and they will struggle in future to borrow for infrastructure and other investments, which will have a negative impact on our future growth.

True that public debt is no problem as long as it's invested in infrastructure etc. that will result in a future strong growing economy that would enable us to repay the debt. Read the last day that the net cost of the bank bailout is now c. €20 billion.

So, our debt levels now have very little to do with either the bank bailout or covid spending as the PUP proportion of the covid spending was near enough funded from the surplus in the PRSI fund pre-covid as far as I know.

Questions will need to be asked post-covid/post Biden tax reforms on where all that excess carbon tax/corporation tax money we collected over the past 5 years really went IMO

And our 115% GNI debt level is a bit misleading as we can probably double that figure when we include our unfunded pension liabilities.

Mic 1972 · 23-04-2021 11:11AM

JimmyVik wrote: »

Probably only a couple of years off 2010 prices now

there is an interesting table in the daft report showing how asking prices compare to 2012, where 2012 is set to 100

2012 = 100
march 2010 = 146.7
march 2021 = 163.3

we are way past 2010, and these are only asking prices. The sales prices are much higher

https://ww1.daft.ie/report/2021-Q1-houseprice-daftreport.pdf?d_rd=1

JimmyVik · 23-04-2021 11:26AM

Mic 1972 wrote: »

there is an interesting table in the daft report showing how asking prices compare to 2012, where 2012 is set to 100

2012 = 100
march 2010 = 146.7
march 2021 = 163.3

we are way past 2010, and these are only asking prices. The sales prices are much higher

https://ww1.daft.ie/report/2021-Q1-houseprice-daftreport.pdf?d_rd=1

Not passed 2010, forward to 2010

hometruths · 23-04-2021 11:29AM

fliball123 wrote: »

How is it naive look at what I am saying I am talking about the point at which a property is repo'd? When they are repo'd anyway you dice this its zero sum for the stock of houses available to Joe Public. Anyone who gets a house repossessed will fall into ont of the 2 below categories.

Strategic defaulters - Probably saved enough money to buy outright. So one house is gained by the property market from the repo and one lost from the by them buying from the property market.

People who cant afford the mortgage - If they cant afford their mortgage they sure as hell will not afford the rents. Average rents are a lot higher than the average mortgage. Even if they are working they will not be able to borrow due to their credit rating and will have to be housed by the state. So one house gained by the property market from the repo and one lost due to our ridiculously left leaning attitude to housing and this family will be housed so house taken away from the social housing stock.

Its naive to think that rich or poor when put in a situation where you cant get access to a house or when the banks come knocking to repossess that everyone will have to be taken out kicking and screaming. You only have to look at the whole "gorse hill" house situation and how that unfolded to give you a taster of how the rich are using the same techniques as the poor to stop their mansions from being repossessed

I totally agree and this is my point exactly. Hence why I say it is naive to assume these people will be a housing burden on the state if they are repoed.

Bass Reeves · 23-04-2021 11:30AM

Mic 1972 wrote: »

there is an interesting table in the daft report showing how asking prices compare to 2012, where 2012 is set to 100

2012 = 100
march 2010 = 146.7
march 2021 = 163.3

we are way past 2010, and these are only asking prices. The sales prices are much higher

https://ww1.daft.ie/report/2021-Q1-houseprice-daftreport.pdf?d_rd=1

Peak was 2008 not 2010. House sales had slowed substantially by 2010. There is still no glut of unsold houses as in 2010.

The present housing market is Dominated by Dublin and the bigger cities nothing being build anywhere else

Wanderer78 · 23-04-2021 11:34AM

Bass Reeves wrote: »

Peak was 2008 not 2010. House sales had slowed substantially by 2010. There is still no glut of unsold houses as in 2010.

The present housing market is Dom nay d by Dublin a d the bigger cities nothing being build anywhere else

building is starting to increase elsewhere, including in my own region, but we re falling foul of old ways again, i.e. primarily credit fueled, and surprise surprise, its leading to rising prices

Bass Reeves · 23-04-2021 11:41AM

Wanderer78 wrote: »

building is starting to increase elsewhere, including in my own region, but we re falling foul of old ways again, i.e. primarily credit fueled, and surprise surprise, its leading to rising prices

Yes it is but there is still no large amount of houses coming on stream and being sold. I am not too far from Limerick city. There is really only two developmemts in progress in the city one is Out Castletroy/Monaleen and the other is Mungretgate development. Other than that there is a builder building in Clarina but that about it. There is no serious development anywhere else in Limerick AFAIK. Ya a few houses here and there but nothing that will cause a glut in the next 2-3 years.

GalwayBmw · 23-04-2021 11:46AM

Mic 1972 wrote: »

there is an interesting table in the daft report showing how asking prices compare to 2012, where 2012 is set to 100

2012 = 100
march 2010 = 146.7
march 2021 = 163.3

we are way past 2010, and these are only asking prices. The sales prices are much higher

https://ww1.daft.ie/report/2021-Q1-houseprice-daftreport.pdf?d_rd=1

what was meant there was - the side effect of getting closer to the peak is - getting closer to the bottom (I think)

Marcusm · 23-04-2021 12:11PM

PropQueries wrote: »

So, they have a building for 8,000 workers (incl. the Chief Executive) and all are hot-desking.

What’s the point as if they’re all hot-desking, where’s the collaboration, brainstorming etc. happening?

Might as well save the cash and anytime they want a meeting, book a meeting room at some local hotel?

Nope, no one there has been hot desking except on the executive floor. Each floor has collaboration spaces, some enclosed as meeting rooms, some in open plan spaces. There are generally no walls except in the central core. Lower 4 floors are 450 people per floor, one enclosed office (for global head of Global Banking & Markets). Other floors are 250 people. Each 10-15 floors is a full floor for collaboration via cafe and similar spaces and more formal meeting rooms.

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

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2021 Irish Property Market chat - mod warnings post 1