Mary Lou McD has let it slip in recent hours that she thinks the average Dublin House prices should fall to the 300k mark.
Figures from the CSO show Dublin prices are currently at the 430k mark. Down the country of course prices are much affordable in places. Let us however concentrate on the Capital city and I wonder has she thought this through? Capital cities in Europe and elsewhere are always more expensive than country areas.
What about the "average" buyer in Dublin who bought this year? They paid €430,000 and took out a mortgage of €387,000. They are on a rate of ~4% fixed for 4 years. Will they be in massive negative equity once SF take power?
As quoted elsewhere construction costs in Dublin at the moment are nearly €2900 per sq.m. According to the Society of Chartered Surveyors Ireland (SCSI), the average cost of building a 3-bedroom house in Dublin is €371,311. That excludes site purchase costs, site development works incl roads, paths, landscaping, services, planning and development costs and fees, developer profit, etc,etc.
€300k for a new 3-bed house in Dublin is completely unrealistic. So if prices drop to 300k you will see nobody in the private sector building houses, if they can only sell them for 300k - or can be bought for 300k - and they cost a lot more than that to build.
And another point is that SF were claiming the cap on the mica relief fund was totally insufficient to rebuild homes in rural Donegal where the land was already purchased and services were already installed- but they think 300k is realistic for average house prices in Dublin? Something wrong there?
Is M L McD and her advisors for real, is she stupid or does she think people are stupid? Is there going to be another massive recession where so many are in negative equity, no new houses being built and government receipts from property taxes goes down, and builders emigrate in their droves again? Or does she / her advisors propose to control prices for goods? We saw the Soviet Union try that and and you'll get not just inferior quality but also shortages due to nobody feasibly being able to create them at this price? And house-owners in huge negative equity again, many in the building industry gone and banks in trouble again? And the IMF here again?
Personally I think one way to increase supply of houses is to train and encourage more trades people ( blocklayers, sparkies, carpenters, plumbers etc ) - there is a shortage of them in the country in recent years. If property prices were going to crash and most trades people would be out of work like last time prices crashed, that is not how you encourage them to get trained.
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