Irish Property Market chat II - *read mod note post #1 before posting*

wassie wrote: »

No. I take it as saying you cant read anything into the share price of a company over the short term.

Short-term? It’s being falling near enough consistently since January 2018.

Villa05 wrote: »

I thought share price was forward looking, anyone know how it compares to UK builders performance over the same period

Yes it's forward looking. Back in 2017/2018 they may have expected better profits. And now they may expect higher expenses than what they thought 3 years ago.

PropQueries wrote: »

And it’s still down c. 50% from it’s 2017 heights and circa no higher than it’s 2015 IPO price.

My point being is that investors don’t appear to believe the housing shortage in Ireland narrative and haven’t believed it for the past three years.

Otherwise, they would see an undervalued company and jump in IMO

This is another significant jump to a conclusion that is not realistically supported by the evidence.

Villa05 wrote: »

Significant enough when the Taoiseach declared housing as the number 1 issue during the week and the share price is as low as its ever been

Certainly worthy of discussion

A portent of potential significant Government intervention in the housing market is not something that would send a private sector builders shares rocketing.

To try claim "this means there's no housing crisis" is a ridiculous jump.

mcsean2163 wrote: »

Are you suggesting that only an actuary who has specifically studied the cairn business should be allowed to comment on cairn on an anonymous forum?

That strikes me as bullying.

Are you suggesting that's what I said? Because it's not, your understanding of my post strikes me as something but I'll leave it to your imagination.

Explain the bullying thing to me please.

wassie wrote: »

When you look at the last 12 months its up by over 50%.

Your point?

Also care to share link for over 50%?

Majority of growth assets are up that much over the last year, as they take into account the dip around covid. Look longer term to see the real impact.

Over 5 years Cairn are down around 30%

Marcusm wrote: »

The current value will be strongly correlated to the ability to deliver a pipeline of built homes at a price point which can be achieved. Covid lockdowns have limited the ability for completions over the past 12 months but has also seen a movement of Labour out of Ireland and strong material price inflation. This means that Cairn will be pushed to deliver the expected number of completed homes and need to achieve stronger sales prices which may be difficult given the strong anti-funds narrative which will remove some of the available purchases. Taken together wit greater competition for builder resources (eg Land Dev Agency builds which will be bigger and last longer with a strong financial covenant behind it) will likely mean that Cairn will find it harder to deliver a pipeline and have negative margin pressures. In that light, given the relative under investment in small Irish listed companies, it’s not surprising that it’s share price has come under pressure.

But it’s been falling since January 2018. In December 2017, it was c. €2.00. In August 2019, it was €1.06. In January 2020 (pre-covid), it was €1.35. Today it is €1.04.

The significant and near continuous fall in its share price over the past three years doesn’t appear to have anything at all to do with Covid or the lockdown and appears (to me anyway) that investors don’t truly believe the housing shortage narrative.

Villa05 wrote: »

One thing that stands out for me in all there sites being closed up to April must mean they are not getting any of the social housing contracts.
That's a significant pie that they seem to be excluded from

And Cairn Homes recently stated that:

“Our landbank comprises suburban and commuter belt low- density housing sites (c. 11,700 units at an average historic site cost of c. €32,000 per unit, including c. 8,000 starter home units at an average historic site cost of €21,000 per unit) and city centre, suburban and commuter belt high-density apartment sites (c. 5,100 units at an average historic site cost of c. €63,000 per unit).”

They appear to have a significant advantage in relation to cost per site over many other more recent developers in the market. They’ve basically purchased many of their Dublin sites for the price of sites outside Dublin where developers are currently selling a-rated three bed semis for c. €200k.

Remember, the proposed affordable housing bill puts a price cap on new build a-rated houses of c. €225k in Co. Tipperary and c. €450k in Co. Dublin. This is despite Cairn Homes average selling price last year bring c. €350k.

Call me insane, but based on its current share price, I believe investors currently (and have for the past c. three years) truly believe that house prices in Dublin are going to fall and fall significantly.

Unless, of course, the council is buying/leasing the end product.

Marius34 wrote: »

Look, I explain as a small investor, and who is thinking to buy Cairn Homes stock for a while. (I know its not a right forum)
It's all comes to the profit. Back in 2018 January, market was hot, Cairn Homes where a growing company, lots profitable projects had on the stream. It was already expected that they should have very good profits for 2018. And they delivered for that year, with 52m in profit for that year, and completing 800 units. With expectation for expansion and increase in profits
During 2018 market started to cool down, as well as expectations on expansion and profits.
In 2018 January, Investors may have expected that company should have no problem to generate over 50m in profit on average. Those expectations are mostly gone, since around second half of 2018. The projects in the future are not expected to be as profitable anymore, for various reasons, labor costs, material costs, restrictions, etc...
The last weeks news is not any good for investors, as it could cause some issues blocking some projects for REITS/Funds.

As you say:

“Those expectations are mostly gone, since around second half of 2018. The projects in the future are not expected to be as profitable anymore, for various reasons, labor costs, material costs, restrictions, etc.”

Then, explain these a-rated three bed showroom semis in Co. Wexford currently asking €205k.

Link to MyHome here: https://www.myhome.ie/residential/brochure/an-glasan-greenville-enniscorthy-co-wexford/4364806

Cyrus wrote: »

Has anyone argued that there is a land shortage?

So, if there’s no shortage of land in Dublin, outside of land costs, what’s the primary reason that the proposed affordable housing bill believes that a new build a-rated three bed semi should sell for c. €225k in Co. Tipperary and the exact same size and quality house should sell for c. €450k in Co. Dublin?

PropQueries wrote: »

So, if there’s no shortage of land in Dublin, outside of land costs, what’s the primary reason that the proposed affordable housing bill believes that a new build a-rated three bed semi should sell for c. €225k in Co. Tipperary and the exact same size and quality house should sell for c. €450k in Co. Dublin?

quote="PropQueries;117231599"]What reasons? It’s obviously not a shortage of land.[/quote]


We have explained this to you twenty time over the last 12 months so just look back over the threads and you will see the answer. Copy and pasted it on to a word document. Then increase the letter size from size 10/12 to 16. Set it to Bold and print it out. You will have it for reference. Then the next time you bring up the difference in site costs between Tipperary or Timbuktu and Dublin up you will have it for your reference

The Examiner's view for Tuesday and Friday -

They're stating the obvious but all this dysfunctional market will do is lead us down the road to the one thing official Ireland fears most...

In the months ahead, it will be interesting to see how willing the Coalition is to tackle the deep-seated reasons for our “speculative, volatile, and expensive” housing market, to quote the National Economic and Social Council.

The Government needs to pay attention to the disaffection felt by all of those locked out of the property market because the housing crisis is likely not only to shape the political agenda in the months ahead but determine the outcome of the next election.

Fianna Fáil and Fine Gael could find themselves evicted from power if they do not meet their needs.

https://www.irishexaminer.com/opinion/ourview/arid-40291511.html

https://www.irishexaminer.com/opinion/ourview/arid-40294913.html

PropQueries wrote: »

Hasn’t been answered at all IMO

If even Cyrus believes there’s absolutely no shortage of land to build on in Co. Dublin (see his quote today), what do you believe accounts for the c. €250k difference in build costs for the exact same build quality a-rated three bed semi detached house in Co. Dublin compared to Co. Wexford?

We have explained this to you twenty time over the last 12 months so just look back over the threads and you will see the answer. Copy and pasted it on to a word document. Then increase the letter size from size 10/12 to 16. Set it to Bold and print it out. You will have it for reference. Then the next time you bring what you consider the difference in housing supply costs between Tipperary or Timbuktu and Dublin up you will have it for your reference

AlmightyCushion wrote: »

Just because there isn't a shortage of land doesn't mean that land is cheap. There is no shortage of diamonds, you can go out and buy a load of diamonds tomorrow if you like. It will cost you though.

https://www.daft.ie/for-sale/site-the-village-newtowncashel-co-longford/3205004

5 acres with planning permission for 6 houses in Longford. The land is advertised at 150k which is 30k an acre and 25k per house.

https://www.daft.ie/for-sale/site-site-adjacent-40-taney-avenue-goatstown-dublin-14/3212033

A tiny sliver of land beside someone's house in Dublin 14 with planning permission for a house. It is advertised at 385k.

https://www.daft.ie/for-sale/site-wits-end-the-rookery-rathfarnham-dublin-16/2532127

0.86 acres in Rathfarnam with planning permission for 5 houses advertised at 1.45m.

“There is no shortage of diamonds, you can go out and buy a load of diamonds tomorrow if you like. It will cost you though.”

So, you’re comparing the land market in Dublin to De Beers previous control over the diamond market.

That’s actually a very good analogy IMO

PropQueries wrote: »

Hasn’t been answered at all IMO

If even Cyrus believes there’s absolutely no shortage of land to build on in Co. Dublin (see his quote today), what do you believe accounts for the c. €250k difference in build costs for the exact same build quality a-rated three bed semi detached house in Co. Dublin compared to Co. Wexford?

Has anyone argued that there is a shortage of land in County Dublin? It feels like you are creating both sides of the argument yourself .

It's certainly a finite resource and one that's more desirable depending on the exact location but it's not scarce overall.