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

I did not say there is not huge money to be made. I merely posted a Journal article that made that ascertain. While I am an accountant by profession I am not involved in the housing sector nor do I have any insights into it but looking at it from the outside it makes no business sense to me that developers will price themselves out of business which is exactly what they appear to be doing.

Why would you price an item at a level that people can't afford? it makes no business sense? It is all over the media what people need to earn to afford a property now (this in my view is headline grabbing as both of my nieces and partners have purchased three bedroom secondhand houses in Dublin while all four are on modest incomes and all are in there late 20's).

Maybe if the govt relaxed/removed the part 5 requirements (maybe they already have) house prices would reduce. 80% of properties in new developments are subsidising the 20% required for the part 5 requirements. If you are looking at a house at as in your example of a €700k house. How much of that is a subsidizing the part 5? could it be €50k, €75k or even €100k per property ?

On a Dublin house with an average price of €430k how much do you think increasing the wages of first year apprentices would add to the price of the house?

And how much of that would be offset by us having far more tradesmen in a few years, building more houses, reducing the demand in the market?

Nevermind the moral or practical issues here - do you think its right that someone working a difficult, physical, job thats very neccessary to the country gets paid 286eur for 40hours of work? And how do you suggest someone earning 286euro a week supports themself on that, if they aren't living in their parents house?

The country is, and has been for a number of years, crying out for more tradesmen. Theres no point in wringing our hands and saying "why won't the youth go into the trades!!" when the very obvious answer is because its a hard job thats very poorly paid for the first few years. Fix that and the numbers would shoot up.

Okay lets say you give an increase to an apprentice. Then the second year apprentice looks for more, then the third year apprentice looks for more and so on. They other trades see this and they say they want an increase.

Look at the Trade Unions, once one unions go into for a pay rise you can bet shortly after the next one is going and for their increases. You can't deal with one aspect without it having a ripple effect.

People will pick those jobs that pay them the most and are easy thats human nature. Maybe tax breaks should be given to those who take up these roles that way everybody pays by subsidising those in these roles by covering their tax liability. While I admire your moral standpoint Ireland of 2024 is nothing like Ireland of the 1980's & 1990's where we more together as a society. Ireland is becoming more me, myself and I rather than "we"

You haven't answered my question. Labour only makes up circa 25% of the overall cost of a house, and most of that goes to qualified workers - not the tiny number of 1st and 2nd year apprentices. The idea that a few 1st year apprentices suddenly getting minimum wage would drive up the salaries of qualified tradesmen earning 25euro+ a hour to unsustainable levels is nonsense. By that logic nobody in retail, or hospitality, or any other industry should get paid minimum wage either, because it would just drive up the salaries of everyone in the shop/restaurant/etc.

Someone earning 286euro a week is paying no tax per year already, thats a yearly income of €14872. They don't earn enough to pay tax, or get tax breaks.

OK let me ask you to can give me an example where a union/trade body will negotiate a pay rise for one grade/level and does not seek a similar if not a higher increase for other that they represent.

Do you actually think those not getting a pay rise will just accept it?

You might not have heard about it, as it was kept fairly quiet and secretive at the time, but the State actually set up an agency to deal with the fallout from developers defaulting on loans. They called it NAMA.

It makes sense if your representatives are constantly lobbying Government and dictating policy and you know that there are massive subsidies from the taxpayer incoming to prop up prices

25 to 30% of housing output are one off homes in rural locations. If one can build 6,000 one off homes in isolated locations, could you double that by building terraced or semi d's in central locations

Greater supply and I suspect greater profit for the builder plus significant competition for the large developers

New grads are being offered what they are for business reasons nothing more nothing less. Who pays for increases in costs to a business? Somebody has to pay for it so who do you suggest does? Perhaps you should lead by example and take a pay cut to fund a pay increase for the low paid you reference.

You have claimed qualified trades people and you would have no problem with increasing pay to those on lower pay and I have asked you to give actual examples of this.

Strawman polls are irrelevant to this discussion can you provide an example in the public domain where the above happened?

You might then fully understand how NAMA worked. NAMA enforced significant "haircuts" on the loans they took over. NAMA actually made a profit but don't let facts distort your argument.

I suspect you are referencing the bank bailouts which the State needed to keep the banks liquid. This was needed to have a functioning day to day banking system. You know the one you get your wages paid to, the one that processes direct debits, the one that processes credit/debit card trans etc.

By that logic then why do we have a minimum wage for any job? Why do retail workers get paid €508 a week? Why do McDonalds workers get paid €508 week? How does that not break those businesses?

Theres absolutely nothing to suggest that paying 1st & 2nd year apprentices at least minimum wage would add substantially to the costs on something as expensive as housing. Apprentice wages do not make up a significant amount of the cost of an average €400k house.

Heres the main union for construction workers in Ireland literally calling for an increase to apprentices wages. Note, not an industry wide pay increase (as you suggested had to be linked), but only one for apprentices:

You've avoided my question again I'll also note. Do you think someone should work 40hrs a week for 286euro a week?

And I'll add to it - do you think its good for the country, and our housing market, that we have a chronic shortage of tradesmen, because too few young people are going into it? Because that €286 a week is a massive part of that.

Grand in theory, however the employer employing an apprentice pays him there rates for four year. He pays them during there block release terms, 9 months in four years, he pays them for 20 days holidays and 11 bank holidays every year. That nearly another 6 months in a four year period. So for employing an apprentice for 4 years an employer has them.working for 2 years and 9 months in that four year period.

The problem lies in its seen now as a right of passage to go to college for a year or two whether you are really interested in it or not. So by the time you are 20/21 you instead of having completed half your apprentice people have wasted two years partying at college

It would not take much for employers to stop taking on aprentices and only employ fully competent skills.

An employer only breaks even with an apprentice in the last year

Maybe look up capital costs to a bank and do some homework yourself.

banks lent heavily to developers for profit with most banks having a dedicated team to wipe the developers arse just to get business and didn’t care what risks were attached.

if banks didn’t sell impaired loans at a discount they would have needed more expensive capital to stop going bankrupt….They actually saved money by selling at a discount and before you say the loss hadn’t crystallised it is irrelevant as banking regs require the capital which at the time was a much bigger bank bailout or the bank going bankrupt.

@Timing belt @The Student

Here you go, seeing as you both seem to be of the opinion that developers didn't cause anything.

In case you need a subscription and don't have one, here is a sample paragraph:

It goes on to give a list of some of the highest profile bankruptcies and how indebted they were at the time

I answered your 3 questions so what was your point of asking them

The law for current trades people apprentices is as is and falls outside the min pay set by law. You will note the hourly rate is set as a % of those qualified in the same trade.

You appear to think I said a particular rate was good or bad (you might show me exactly where I posted that ascertain).

Pay is set at the rate of the market if the pay is not attractive then get employment in a sector that pays you what you want. Eventually market forces will either force apprentice rates up or people simply won't enter the trade.

Whether you want to accept the concept being a developer is a business transaction pure and simple. If you increase costs in any business someone has to finance those increased costs.