2021 Irish Property Market chat - mod warnings post 1

Villa05 · 10-05-2021 11:35AM

AlmightyCushion wrote:

They tried that with all those housing trusts building social housing whilst trying to keep their borrowings off the state's books. It didn't work. That was because all the income for these housing trusts would be coming from the state. if they created a new entity that was renting or selling to non social tenants and thus not using state money, it is possible that would work. They might think that the optics of that are bad. State using money to build houses for people with good jobs when the social housing list is so long. Personally I think that the potential negative press from it this is over stated.

Build to rent/buy for low middle income workers priced out of the market close to their place of work is the obvious solution self financing and scale able.

Price set at % of income and as housing is subsidised qualification for such housing requiring payment deducted from wages avoiding any unnecessary arrears. Sales price must cover replacement cost at a minimum

cnocbui · 10-05-2021 11:50AM

PropQueries wrote: »

I think there is a magic bullet. Copenhagen has c. 600k people living in a similar footprint and in similar low rise buildings as Dublin City has c. 100k people living between the canals.

That’s the solution right there and it’s enough existing, already built space to supply all housing needs in Ireland for the next 20 to 30 years without building one new house/apartment (assuming we do need the projected figures amount).

It’s not a supply problem. It’s a mismanagement of existing supply problem.

They’re going to re-enter the market at some stage (sooner rather than later IMO) given how many of these properties are owned (I assume) by the funds so we might as well get/force them into supply now IMO

Good for people. Good for society. Good for the taxpayer. Good for the environment.

People are looking for more room in their accommodation, not less. If you are advocating tearing down existing buildings to build anew, that is a very expensive non starter. Apartments are more expensive to provide, than houses and they are on the nose after covid lockdowns. I thought you were worried about this countries levels of debt?

The Real Costs of New Apartment Delivery 2020 was published by the Society of Chartered Surveyors Ireland (SCSI).

It found that the all-in cost of delivering medium-rise two-bedroom apartments in the Greater Dublin Area ranged from €411,000 for a low-spec unit in the suburbs, to €619,000 for a high-spec one in the city.

The costs of delivering a low-rise suburban apartment ranges from €359,000 for a low-spec unit – an increase of 8% since the SCSI’s last apartment report in 2017 – to €413,000 for a high-spec one, up 7%.

All these figures are cost prices and sales prices would need to exceed these for developments to be viable.

The latest report is based on data covering almost 10,000 apartments in four different categories in 49 schemes.

Last July, the SCSI’s “Real Cost of New Housing Delivery” found the cost of delivering a three-bed semi in the Dublin area was €371,000.

https://www.thejournal.ie/first-time-buyers-apartment-dublin-5335798-Jan2021/

AlmightyCushion · 10-05-2021 11:51AM

Villa05 wrote: »

Build to rent/buy for low middle income workers priced out of the market close to their place of work is the obvious solution self financing and scale able.

Price set at % of income and as housing is subsidised qualification for such housing requiring payment deducted from wages avoiding any unnecessary arrears. Sales price must cover replacement cost at a minimum

What counts as middle income here? 50k, 60k, 70k? Those people being eligible for this housing will cause opposition to scream and shout about how the most vulnerable will be priced out of it by the 'rich' and all that usual shíte. It shouldn't be the case but it is. It is part of what has got us into this mess. The councils are buying up and renting housing for social housing at huge cost and people not eligible for social housing are getting screwed.

timmyntc · 10-05-2021 11:54AM

cnocbui wrote: »

People are looking for more room in their accommodation, not less. If you are advocating tearing down existing buildings to build anew, that is a very expensive non starter. Apartments are more expensive to provide, than houses and they are on the nose after covid lockdowns. I thought you were worried about this countries levels of debt?

https://www.thejournal.ie/first-time-buyers-apartment-dublin-5335798-Jan2021/

Something seriously wrong if apartments are that expensive to build

Bass Reeves · 10-05-2021 11:55AM

PropQueries wrote: »

I think there is a magic bullet. Copenhagen has c. 600k people living in a similar footprint and in similar low rise buildings as Dublin City has c. 100k people living between the canals.

That’s the solution right there and it’s enough existing, already built space to supply all housing needs in Ireland for the next 20 to 30 years without building one new house/apartment (assuming we do need the projected figures amount).

It’s not a supply problem. It’s a mismanagement of existing supply problem.

They’re going to re-enter the market at some stage (sooner rather than later IMO) given how many of these properties are owned (I assume) by the funds so we might as well get/force them into supply now IMO

Good for people. Good for society. Good for the taxpayer. Good for the environment.

That is still not a solution that will produce 100 k hom s in the next three years. Yes we should be refurbishing as many existing houses as possible. It's not just in Dublin but in every large urban areas and even in rural Ireland. But refurbishment will take labour away from new building. It takes as much labour and costs nearly as much to refurbish as to build new estates. Inside the canals and in most large urban areas developers have been trying to accumulate sites. You even have lads involved in speculation trying to accumulate a number of derelict and semi derelict properties to put together a site to develop. In general they may rent existing houses that are good enough but if the run into disrepair they just let them that way. Often you will find 2-3 being in use and will be in use for the next twenty years.

A carrot and stick approach might bring these into play but you are back to where the labour cones from to go beyond 25k units a year

cnocbui · 10-05-2021 11:57AM

AlmightyCushion wrote: »

It's the fiscal compact. It was brought in after the last crash. Short answer, a country needs to keep their deficit below 3% of GDP whilst keeping their debt to GDP ratio at 60%. If your debt to GDP ratio is over 60% you need to be reducing it. It has been temporarily suspended for Covid related spending.

I got a great idea, lets give Public Sector workers a pay rise! Especially all those who haven't done a lick of work in the last 6-8 months, like those who haven't lifted a finger on my son's citizenship application since it was submitted in Oct 2019.

cnocbui · 10-05-2021 12:05PM

timmyntc wrote: »

Something seriously wrong if apartments are that expensive to build

It's the foundations required, to some extent. Building up is cost inefficient and something normally only pursued in places where land is near non-existent, like Hong Kong, inner Sydney, New York. Ireland is not in that position and neither is Dublin, where there is a farm backing onto DCU, for instance.

PropQueries · 10-05-2021 12:07PM

cnocbui wrote: »

People are looking for more room in their accommodation, not less. If you are advocating tearing down existing buildings to build anew, that is a very expensive non starter. Apartments are more expensive to provide, than houses and they are on the nose after covid lockdowns. I thought you were worried about this countries levels of debt?

https://www.thejournal.ie/first-time-buyers-apartment-dublin-5335798-Jan2021/

Wouldn't cost the taxpayer anything. I believe (and it's only my belief) that the funds own many of these buildings in the city centre (Dublin, Limerick, Cork, Galway and many other small towns around the country).

Slap a 10% derelict property tax (like Washington D.C.) on them and see how imaginative they would get in bringing them to market.

I would be of the belief that many have already or are in the process of being refurbished and many will be entering supply in the very near future. If I'm right that the funds do control many of these type of properties around Ireland, they can see which way the wind is blowing and will be looking to exit very shortly IMO

In relation to the cost of building a house. Why does the proposed affordable housing bill believe that developers in Co. Tipperary can build and sell new build a-rated homes for €225k, but in Dublin they need to sell them for c. €450k to make a profit?

Cairn Homes average selling price per unit in 2020 was c. €350k and Glenveagh's was less (if I'm remembering correctly), so the SCSI cost of building reports are nonsense and are meaningless for bigger developers who have massive economies of scale IMO. They've being spouting similar figures for the past several years and then Sisk Living comes along and designs and builds a-rated houses for South Dublin county council for c. €180k each back in 2018.

All houses and apartments are still what they were in previous decades. They're 4 walls and a roof and nothing has really changed outside the optics of additional USB ports, relatively cheap solar panels, a bit of additional insulation etc. etc. IMO

fliball123 · 10-05-2021 12:10PM

Villa05 wrote: »

We had a spreadsheet of the various councils and many of them were delivering housing at significantly below market prices albeit in low volumes

We have a dedicated division of Sisk for delivering affordable housing.

We have o cualann housing and others that appear to be extremely successful in delivering affordable housing.

Commercial sector appears to be winding down freeing up labour

Finance available at 0% to the state with the EU anxious for states to assist in kick starting economies

The state is the largest landowner in the country and I'm sure their are costs in leaving it idle

Pool the competent sectors of the state and let them focus on the areas most affected by supply issues and let them take advantage of the many circumstances that are beneficial to the state in solving the issue. Focus on housing workers close to where they work. The additional supply will trickle up and down addressing issues there also

It really is not that complicated

Unfortunately it is that complicated and prices for raw materials for building is rocketing up as well as a labour shortage for building. Also there are very few competent sectors in the state.

The o cualann model is based on them paying zero or very little for land. That will not be the case for the majority of developments and its not at 0% that we are borrowing its at near zero and at some point in the future it will have to be paid back and you can be sure as hell with the rollover nature of our debt it will be a lot more than zero % that we will be paying when that time comes.

A better way is to stop all state support FTB grants, welfare housing and tax REITs and vultures the same as an individual. Then see where rents and prices go. After they get rid of all subsidies we can then start looking at a fairer way to do this. Your effectively asking those who have paid through the nose for a house to pay again for others to be housed. The way you want to go at it is the system if fecked and we are paying a lot for a fecked up system so lets borrow more money put the debt on the tax payer and build more. I think the tax payer is on the hook for too much already, better to cut everything and start again and even the playing field between REITS/Vultures and those who have a home. I dont see why I or anyone else should be asked to pay more into this money pit. If they want more tax then the government need to go through the whole of our current spend and cut out the waste. Its gone like the HSE and like the HSE it should be scraped and something new and something that has more control and accountability put in its place. For housing I dont know what that is but you can be sure as hell our public sector do not I repeat do not do cheap when it comes to building or procurement.

What should be done after spend is gone through root and branch as well as all state support for the Rich and poor taken away is to tender out aournd around Europe and asking builders to come here on a yearly basis give them somewhere to rent for the short term and get the cheapest prices in with a track record of good quality builds and incentive the workers not the big companies to build and keep the public sector away from the finances. They are like a horny auld goat in a strip club with a bunch of one dollar bills making it rain when they want to. The Public sector have to have their little pay offs when it comes to the money being doled out.

But I do get your point its frustrating but its not as simplistic as you make it out.

timmyntc · 10-05-2021 12:13PM

cnocbui wrote: »

It's the foundations required, to some extent. Building up is cost inefficient and something normally only pursued in places where land is near non-existent, like Hong Kong, inner Sydney, New York. Ireland is not in that position and neither is Dublin, where there is a farm backing onto DCU, for instance.

To some extent.

As the SCSI report highlights construction costs are ~47% of the overall cost. Which is still a lot, but there is room to cut it. Land costs for example would have scope to decrease a lot particularly in cities, if we had some punitive taxes to stop land hoarding and speculation on land prices.

One of the areas it highlights is the Irish construction industry's resistance to using prefabricated parts/construction off-site for large parts of builds, which is the norm on the continent. We are far from world-leaders in construction techniques thats for sure.

JohnnyChimpo · 10-05-2021 12:14PM

cnocbui wrote: »

where there is a farm backing onto DCU, for instance.

Was walking the dog in Albert Park the other day and accidentally ended up in this secret farmland, crazy that it exists tbh

hometruths · 10-05-2021 12:19PM

AlmightyCushion wrote: »

It's the fiscal compact. It was brought in after the last crash. Short answer, a country needs to keep their deficit below 3% of GDP whilst keeping their debt to GDP ratio at 60%. If your debt to GDP ratio is over 60% you need to be reducing it. It has been temporarily suspended for Covid related spending.

That's slightly worrying if we're in danger of breaching our debt limits relative to GDP given that our GDP per capita is one of the strongest in the EU thanks to our MNC friends.

Villa05 · 10-05-2021 12:22PM

AlmightyCushion wrote:

What counts as middle income here? 50k, 60k, 70k? Those people being eligible for this housing will cause opposition to scream and shout about how the most vulnerable will be priced out of it by the 'rich' and all that usual shÃte. It shouldn't be the case but it is. It is part of what has got us into this mess. The councils are buying up and renting housing for social housing at huge cost and people not eligible for social housing are getting screwed.

Would it matter if rent is set at % of income and do something similar for those who wish to buy. For those who buy the land stays in state ownership

Need an alternative to the private market, because its clearly not working

Marius34 · 10-05-2021 12:30PM

PropQueries wrote: »

Wouldn't cost the taxpayer anything. I believe (and it's only my belief) that the funds own many of these buildings in the city centre (Dublin, Limerick, Cork, Galway and many other small towns around the country).

Slap a 10% derelict property tax (like Washington D.C.) on them and see how imaginative they would get in bringing them to market.

I would be of the belief that many have already or are in the process of being refurbished and many will be entering supply in the very near future. If I'm right that the funds do control many of these type of properties around Ireland, they can see which way the wind is blowing and will be looking to exit very shortly IMO

In relation to the cost of building a house. Why does the proposed affordable housing bill believe that developers in Co. Tipperary can build and sell new build a-rated homes for €225k, but in Dublin they need to sell them for c. €450k to make a profit?

Cairn Homes average selling price per unit in 2020 was c. €350k and Glenveagh's was less (if I'm remembering correctly), so the SCSI cost of building reports are nonsense and are meaningless for bigger developers who have massive economies of scale IMO. They've being spouting similar figures for the past several years and then Sisk Living comes along and designs and builds a-rated houses for South Dublin county council for c. €180k each back in 2018.

All houses and apartments are still what they were in previous decades. They're 4 walls and a roof and nothing has really changed outside the optics of additional USB ports, relatively cheap solar panels, a bit of additional insulation etc. etc. IMO

I'll give you a hint, try to add value of land, and VAT on final price.

Claw Hammer · 10-05-2021 12:33PM

PropQueries wrote: »

In relation to the cost of building a house. Why does the proposed affordable housing bill believe that developers in Co. Tipperary can build and sell new build a-rated homes for €225k, but in Dublin they need to sell them for c. €450k to make a profit?

Land is more expensive in Dublin than Tipperary. labour is more expensive in Dublin. Access to sites is generally more difficult requiring more labour. Sites generally need more security in Dublin. It is far easier to build where vehicles of whatever size can come and turn about easily than situations in urban areas where traffic has to be stopped and vehicles can't turn. Anything which is awkward adds to the time and labour costs.

PropQueries · 10-05-2021 12:34PM

Marius34 wrote: »

I'll give you a hint, try to add value of land, and VAT on final price.

And who owns or controls most of the large land banks in and around Dublin? I would guess (and, it's only a guess) that it's primarily the funds and the local councils/state.

And, Cairn Homes stated last year that the average cost of many of their sites was c. €15k so it's not land/site costs that are the problem IMO

Villa05 · 10-05-2021 12:35PM

Hubertj wrote:

This is a very good article, which proposes viable solutions and isnâ€™t just a rant about what is wrong. I can definitely agree with the points around planning regs etc for Georgian buildings having lived in a few over the years. So much potential north and south city centre

Amazing how solutions are much more palatable when national news media propose them rather than props and schmittel, shame they don't have a pr budget or lobbying powers

PropQueries · 10-05-2021 12:37PM

Claw Hammer wrote: »

Land is more expensive in Dublin than Tipperary. labour is more expensive in Dublin. Access to sites is generally more difficult requiring more labour. Sites generally need more security in Dublin. It is far easier to build where vehicles of whatever size can come and turn about easily than situations in urban areas where traffic has to be stopped and vehicles can't turn. Anything which is awkward adds to the time and labour costs.

So, how did Sisk Living manage to design and build a-rated homes for South Dublin county council for c. €180k each back in 2018?

Marius34 · 10-05-2021 12:37PM

PropQueries wrote: »

And who owns or controls most of the large land banks in and around Dublin? I would guess (and, it's only a guess) that it's primarily the funds and the local councils/state.

And, Cairn Homes stated last year that the average cost of many of their sites was c. €15k so it's not land/site costs that are the problem IMO

You asked about developers, where developers provided with free land to build those houses for 450K houses? I don't think so.

Graham · 10-05-2021 12:39PM

PropQueries wrote: »

So, how did Sisk Living manage to design and build a-rated homes for South Dublin county council for c. €180k each back in 2018?

It's not 2018 anymore

Claw Hammer · 10-05-2021 12:40PM

PropQueries wrote: »

So, how did Sisk Living manage to design and build a-rated homes for South Dublin county council for c. €180k each back in 2018?

Who paid for the land?

PropQueries · 10-05-2021 12:41PM

Marius34 wrote: »

You asked about developers, where developers provided with free land to build those houses for 450K houses? I don't think so.

So, let's remove that Cairn Homes stated that they did purchase many of their sites for c €15k. What's the current "market price" for a site with planning for a semi-detached house in Dublin? What's the current "market price" for a site with planning for a semi-detached house in Co. Tipperary?

Does it really account for most of that €225k cost difference between building and selling a house in Tipperary compared to Dublin?

Marius34 · 10-05-2021 12:48PM

PropQueries wrote: »

So, let's remove that Cairn Homes stated that they did purchase many of their sites for c €15k. What's the current "market price" for a site with planning for a semi-detached house in Dublin? What's the current "market price" for a site with planning for a semi-detached house in Co. Tipperary?

Does it really account for most of that €225k cost difference between building and selling a house in Tipperary compared to Dublin?

I don't believe you would find a site for 15K in Dublin.
The site for semi-D in Dublin City could vary greatly, from around ~80K to ~500K.
I don't know about Tippery, but I'm confident, it's many times cheaper than in Dublin.

cnocbui · 10-05-2021 12:54PM

PropQueries wrote: »

Wouldn't cost the taxpayer anything. I believe (and it's only my belief) that the funds own many of these buildings in the city centre (Dublin, Limerick, Cork, Galway and many other small towns around the country).

Slap a 10% derelict property tax (like Washington D.C.) on them and see how imaginative they would get in bringing them to market.

I would be of the belief that many have already or are in the process of being refurbished and many will be entering supply in the very near future. If I'm right that the funds do control many of these type of properties around Ireland, they can see which way the wind is blowing and will be looking to exit very shortly IMO

In relation to the cost of building a house. Why does the proposed affordable housing bill believe that developers in Co. Tipperary can build and sell new build a-rated homes for €225k, but in Dublin they need to sell them for c. €450k to make a profit?

Cairn Homes average selling price per unit in 2020 was c. €350k and Glenveagh's was less (if I'm remembering correctly), so the SCSI cost of building reports are nonsense and are meaningless for bigger developers who have massive economies of scale IMO. They've being spouting similar figures for the past several years and then Sisk Living comes along and designs and builds a-rated houses for South Dublin county council for c. €180k each back in 2018.

All houses and apartments are still what they were in previous decades. They're 4 walls and a roof and nothing has really changed outside the optics of additional USB ports, relatively cheap solar panels, a bit of additional insulation etc. etc. IMO

Those Sisk numbers you like so much - they wouldn't be because they don't included the cost of the land, by any chance? What do you imagine they had to pay the county council in terms of development fees and such? You don't suppose it was a big fat zero, by any chance?

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.

https://www.irishbuildingmagazine.ie/2018/11/01/sisk-living-delivers-90-social-houses-in-tallaght/

I have no idea why legislation drafted by a bunch of Irish civil servants believes you can build and deliver an A-rated home in Tipp for €255 K. Are there actual examples of such houses being built put to market at that price?

PropQueries · 10-05-2021 12:57PM

Marius34 wrote: »

I don't believe you would find a site for 15K in Dublin.
The site for semi-D in Dublin City could vary greatly, from around ~80K to ~500K.
I don't know about Tippery, but I'm confident, it's many times cheaper than in Dublin.

And who controls the "market price" of sites? It's primarily either the council/state/funds IMO. The state can bring the cost of sites in Dublin back to Co. Tipperary prices if they truly wished through a combination of bringing their own vast landbanks into play and through either taxation/regulation measures in relation to the fund owned sites.

There is absolutely no shortage of land to build on in Dublin IMO.

The short-term magic bullets really are there through managing the inefficient use of existing properties and the land banks/sites in the cities and towns IMO.

If this Government doesn't do it, either the next Government will do it or the funds may do it much sooner should they decide to cash in and exit IMO

cnocbui · 10-05-2021 01:01PM

Hah! 1 percent of rateable properties outside of Dublin are owned by the catholic church. I wonder how much of Dublin they own? https://www.irishexaminer.com/news/arid-20171915.html

Hubertj · 10-05-2021 01:04PM

Villa05 wrote: »

Amazing how solutions are much more palatable when national news media propose them rather than props and schmittel, shame they don't have a pr budget or lobbying powers

That’s an excellent contribution to the discussion. Thank you.

I made a number of reference led to the planning issues which prevent the renovation of many Georgian houses last year.

Do I not get any praise either? Or is that because I don’t agree with some of your ideas?

Marius34 · 10-05-2021 01:08PM

PropQueries wrote: »

And who controls the "market price" of sites? It's primarily either the council/state/funds IMO. The state can bring the cost of sites in Dublin back to Co. Tipperary prices if they truly wished through a combination of bringing their own vast landbanks into play and through either taxation/regulation measures in relation to the fund owned sites.

There is absolutely no shortage of land to build on in Dublin IMO.

The short-term magic bullets really are there through managing the inefficient use of existing properties and the land banks/sites in the cities and towns IMO.

If this Government doesn't do it, either the next Government will do it or the funds may do it much sooner should they decide to cash in and exit IMO

Well at least you got your answer to the first question why its more expensive for Developer to build in Dublin.

awec · 10-05-2021 01:15PM

PropQueries wrote: »

And who controls the "market price" of sites? It's primarily either the council/state/funds IMO. The state can bring the cost of sites in Dublin back to Co. Tipperary prices if they truly wished through a combination of bringing their own vast landbanks into play and through either taxation/regulation measures in relation to the fund owned sites.

There is absolutely no shortage of land to build on in Dublin IMO.

The short-term magic bullets really are there through managing the inefficient use of existing properties and the land banks/sites in the cities and towns IMO.

If this Government doesn't do it, either the next Government will do it or the funds may do it much sooner should they decide to cash in and exit IMO

Nobody controls it.

The market price is determined by the market. Land is worth whatever someone is willing to pay for it.

Bass Reeves · 10-05-2021 01:30PM

PropQueries wrote: »

All houses and apartments are still what they were in previous decades. They're 4 walls and a roof and nothing has really changed outside the optics of additional USB ports, relatively cheap solar panels, a bit of additional insulation etc. etc. IMO

Houses and Apartments are not similar to decades ago. First off since the last boom and it's fallout remember the apartment block build by the SF developer and it's ramifications. Engineering certification as well as Electrical and plumbing certification has added 15-20k to the price of a new build. Insulation to A rating levels has probably added 20k to house prices since the early 90's most of the cost added in the last 5-10 yeats

Go back a decade before that and houses were mostly build or were available anyway at builders finish stage, finished houses now are costing another 15-20k. Addition of downstairs toilet added 2-4k to house prices as well.

A decade previous to that the on suite came in for the master bedroom about 3-5k added to cost again.

All in all all these changes have added 60-80k to houses costs. With Dublin labour prices it probably nearer 100 k

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

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2021 Irish Property Market chat - mod warnings post 1