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

1458459461463464507

Comments

  • Registered Users, Registered Users 2 Posts: 7,209 ✭✭✭timmyntc


    The global financial crisis, and the crash in Ireland saw demand for property plummet to almost nothing, which is why asset prices didn't cover the cost of outstanding loans.

    That is a million miles away from where we are now.



  • Registered Users, Registered Users 2 Posts: 1,279 ✭✭✭The Student




  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    Bit of a link dump but relevant to why ftb are buying 2nd hand properties over new homes

    Apparently the uninterferred market is cheaper than so called "affordable" new homes market

    Surprise!



  • Registered Users, Registered Users 2 Posts: 692 ✭✭✭FernandoTorres


    That article is fairly ironic in that it goes on about how misleading it is to call properties affordable by comparing it to second hand listing prices without any regard for the fact that listing prices are completely misleading in themselves. Pretty much nothing in Dubin will sell for near its listing price these days, making the whole comparison nonsense!



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    For someone that lectures others on basic economics, you seem to have quickly forgotten the effects of state policies and inactions pumping asset prices has on an economy.



  • Registered Users, Registered Users 2 Posts: 1,279 ✭✭✭The Student


    The result of state inaction is why we are where we are. The state abdicated its responsibility to house people and left it to the private sector simply because it can't manage the process.

    Cant/wont pay your rent don't worry we will introduce a mechanism that delays your actual eviction so your not the States responsibility for now.

    What exactly do you think businesses do? They look to earn profits again simple economics!

    Want to solve the housing crisis get the state to build themselves, but don't want to go back to council estates because of anti social issues! Deal with that issue and you go a good way towards dealing with the housing crisis.

    But sorry I forgot "I'm entitled" to this or that, do you actually think any politician is going to take hard decisions?



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05




  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    You might also notice that duplexes are cheaper than houses which might be a shock to Dublin developers.

    As other posters state Business have to make profit and when you have a government with a blank cheque book backed up by other people's money and lobbyists from government parties. You make hay while the sun shines. Organic growth, I believe is the politically correct term

    Nothing more dangerous than fools with other people's money

    Post edited by Boards.ie: Mike on


  • Registered Users, Registered Users 2 Posts: 1,279 ✭✭✭The Student


    Why does the first property quote "reduced prices" in the article. So who is paying for the "reduction" in price? Also the article indicates this is a shared ownership scheme.

    Or that the second property is listed as secondhand on the ppr register .



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  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    From the council website It looks like the affordable home is priced at 15% below "market" value (the figure quoted). The council then takes an equity share depending on your max mortgage between 5 and 15% of the above discount

    The 2nd property is to show that you can get a similar property for less than the affordable house price on the 2nd hand private market without any subsidies

    This means that the only effect of the subsidies is to drive up price and risk to the buyer/council



  • Registered Users, Registered Users 2 Posts: 1,279 ✭✭✭The Student


    "The attached suggests "First-time buyers and those seeking a fresh start will be eligible to purchase homes which are significantly discounted from market rates"

    https://www.ilovelimerick.ie/bru-na-gruadan-castletroy/



  • Registered Users Posts: 5 piberry


    Another insight into where taxpayer money is being allocated for apparently affordable housing, this time for a new apartment development in Limerick City. I'm hoping some of the otherwise unfathomable figures quoted are a misprint. Below is from a Limerick Post article last Wednesday:

    It is understood that 17 of the planned units will transfer to Limerick City and County Council to be used as social and affordable housing at a cost of over €9million.

    One-bed units would cost the council an average of €505,000 each, while a two-bed would see the council shell out over €660,000 each.

    These prices “reflect the high standard of design and specification of the proposed residential units, amenities, and facilities,” the planning files state.



  • Registered Users Posts: 244 ✭✭Montys return




  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05




  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    Looks like the owners of Arthur's Quay shopping centre are not going to let this opportunity of a lifetime pass them by either.

    There is no end to the madness



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  • Moderators, Category Moderators, Computer Games Moderators, Society & Culture Moderators Posts: 8,543 CMod ✭✭✭✭Sierra Oscar


    I'm doing some reading up on The Affordable Home Purchase Scheme after the developer in a local estate put a few houses up for sale in conjunction with the Local Authority.

    I am shocked that a three bed house that was available to purchase from the developer a year ago for €420,000 is now being listed with a market value of €500,000 by the developer. This is resulting in applicants being required to afford repayments on a mortgage of between €400,000 and €470,000.

    This comes across as a blatant scam to me. How are the houses now valued at €500,000 when the developer was selling the exact same units a year ago for €420,000? Oh and these houses have sat vacant for a year during a housing crisis, but that's another discussion.

    Am I missing something here? What is the story with this scheme?

    It's also disgraceful that €400,000 is considered 'affordable' for a three bed house.



  • Registered Users, Registered Users 2 Posts: 1,301 ✭✭✭DataDude


    No idea on the first part, but if you do the maths on the mortgage.
    €400k @ 3.6% (AIB) for 35 years gives a monthly mortgage payment of €1,662.

    Using the old calculation of an affordable mortgage being 1/3rd of household net take home pay would mean you need a monthly household net income of €4,980. €2,490 per person. €30k net annual, €35k gross annual per person.

    Median full time salary these days is c.€50k.

    Seems affordable to me. Could you even rent a 1 bed apartment for €1,650 in many places these days?



  • Posts: 0 [Deleted User]


    A year is a long time in property sales, if the 420k units sold out a year ago, it is conceivable that they would sell for 500k now if the demand is there. Is there a condition in the planning that these houses had to be social/affordable housing? That might explain why they remained vacant, or, the developer may have held onto them for a higher price.
    Which estate are you referring to?

    Post edited by [Deleted User] on


  • Registered Users, Registered Users 2 Posts: 19,211 ✭✭✭✭Bass Reeves


    The area around Bŕu Na Gruadan and the estate itself would have a lot of Student accommodation. It would not be a high priced area. Move that house a mile away into Monaleen and it probably be 100k more.

    Its the reality of a lot of locations. The LA for instance often pay 100k+ to renovate houses in some LA estates, where is a house comes for sale it much the same price to buy. Its similar to the recession where houses sold for less than build value.

    Locally there is an affordable scheme of 8 houses being build........for the last 5 years. COVID interrupted the process when it started ( they were being build for the LA) as prices exceeded costs the build stopped. The LA had not the flexibility to renegotiate the contract. An affordable housing entity then took over the site about two years ago and its still not finished.

    No state body should have anything to do with build housing.

    Post edited by Bass Reeves on

    Slava Ukrainii



  • Registered Users, Registered Users 2 Posts: 3,105 ✭✭✭Blut2


    Its absolutely affordable for said hypothetical household (especially compared to renting), but theres no way a household with €70k gross income is getting a €400k mortgage from the banks. Thats as big a problem.



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  • Registered Users, Registered Users 2 Posts: 2,374 ✭✭✭combat14


    sure thats only a mere 20% increase on already heady prices



  • Posts: 0 [Deleted User]


    If that is market value, then that’s market value.



  • Registered Users, Registered Users 2 Posts: 1,301 ✭✭✭DataDude


    Absolutely but if you follow that along it would suggest bank lending is too conservative and limits should be increased further - but I would imagine that would be wildly unpopular with reasonable concerns it would be inflationary.

    Perhaps LTI exemptions, underwritten by government, for those selected for affordable housing schemes. Particularly for those already showing evidence of prolonged rent repayments far in excess of the mortgage amount.

    This might keep it narrow based enough to not inflate the wider market.



  • Registered Users, Registered Users 2 Posts: 649 ✭✭✭Gary_dunne


    That hypothetical household could get a max mortgage of 280k, on a 35k salary if you're paying rent and bills there won't be a tonne left over for savings at the end of each month. 400k isn't affordable to a couple like this.



  • Registered Users, Registered Users 2 Posts: 3,105 ✭✭✭Blut2


    LTI exemptions underwitten by the government would certainly help some households qualify. But its still a zero sum game - the real problem we have is too little supply.

    Helping one household to buy a house that would have sold anyway to another just means the other household isn't buying it, so as a country its a net gain of zero additional families housed but at a large financial cost to the exchequer.

    It would be much better for the government to use that money to actually just build affordable housing at scale.



  • Registered Users, Registered Users 2 Posts: 19,211 ✭✭✭✭Bass Reeves


    There Are very few couples trying to buy houses earning 70k between them in Dublin. It about 17 euro/ hour.

    A teacher that is full time and permanent 5-6 yearsis on 55k as are guards and nurses ( admittedly with shift abd a bit of OT)at that stage as well. Such a couple earning 100k/ anum between them would have 1500/ week take home or 6.5k/ month in take home pay. Mortgage woukd be 26% of monthly take home pay

    Slava Ukrainii



  • Registered Users, Registered Users 2 Posts: 1,301 ✭✭✭DataDude


    I think we’re arguing a slightly different point about ‘affordability’ and ‘attainbility’. Unfortunately the later brings you down the road of loosening lending limits which naturally is very unpopular.

    The point I was making is you see lots of quite emotional responses to house prices. Regularly characterised by saying the price in full sentences - ‘That 3 bed house is almost half a million euro’

    The reality is, it’s 2024, inflation has happened. €400k is just not that much, especially when you compare it to the prices in the shambolic rental market. Almost any couple working full time jobs, even entry level jobs in their early 20s, could fairly comfortably take on a €400k mortgage if the bank would give it to them.

    Agree with all of the above except the last paragraph which has been argued repeatedly on here.

    I don’t believe the government is capable of directly delivering house building at scale and with efficiency. I think the current government agrees with that position and feels their best way to scale building is to underpin demand to give confidence to private sector to scale up. They will say this is working. Many will argue it’s not working fast enough.

    I accept there is an ideological alternative which I’m not saying is definitely wrong but I just don’t subscribe to it myself.



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    I had a quick trawl of the property price register for home sales in Limerick for 2023 and when you exclude the the transaction under investigation at UL in relation to the purchase in Rhebogue, only 1 property achieved a price in excess of 500k.

    The state buying 1 and 2 bed apartments for in excess of 500 and 600k for social and affordable housing is well beyond stupidity. This has to be fraud on the taxpayer, there could be no other explanation



  • Registered Users, Registered Users 2 Posts: 1,342 ✭✭✭herbalplants


    What auditors review what the tax payers money is spent on? Is it the same auditors who reviewed RTE and their flip flops expenditure?

    Remember the shills only get paid when you react to them.



  • Registered Users, Registered Users 2 Posts: 7,209 ✭✭✭timmyntc


    Ah yes the teacher Garda combo that's always trotted out here

    CSO stats on household incomes would disagree but don't let that interrupt your fantasies



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  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    Apartments 1 to 61 in Ardhu on the North circular road were purchased for 17,500,000 that's less than 300k a piece. This site is very close to the proposed 600k social and affordable apartments the council is purchasing

    Post edited by Villa05 on


  • Registered Users, Registered Users 2 Posts: 1,457 ✭✭✭SharkMX


    I know a fair few Gardai and a fair few teachers and a fair few nurse. Not one of them is married to any of the other professions. But you would think they only ever married each other the way people put them together :)



  • Registered Users, Registered Users 2 Posts: 3,105 ✭✭✭Blut2


    The issue is that we've spent the last decade trying the FF/FG ideological strategy of the government attempting to inspire the private sector to build in large numbers, while the state stays out of the building market. And the non-partisan, statistical, evidence is very clear that it very clearly hasn't worked.

    Even giving them some allowances for the first few financial crisis recovery years, and just taking the years post-crash recovery - our completions since 2015 have only gone up by an average of 2500 units a year (12.6k in 2015 to 32.6k in 2023). We hit 32.6k last year, but every analyst is in agreement we need closer to 60k. And that yearly increase isn't even accelerating particularly - it was only up 2800 units on 2022. And 2024Q1 figures are down by approaching 20% YoY vs 2023Q1 - so we're now actually potentially going backwards.

    This all despite a booming population, too. We've added over 500,000 people to the population since 2015, so the per capita output growth is even worse.

    We can't afford to spend another decade keeping with this strategy that very clearly isn't delivering.

    The state historically did also very successfully build large scale housing, so I think all the evidence would point to it at least being worth a try at this stage. Because we have enough evidence that the hands-off approach definitely isn't working.

    I think the worst case scenario is the state does deliver large numbers of housing, but significantly over-cost. But at a time of huge fiscal surplus that would surely be a reasonable outcome for the country. Particularly when the alternative is the state wasting huge sums of money on leasing social housing as we're doing now, instead of just building units and gaining the long term asset at least even if the up-front price is inflated.



  • Registered Users, Registered Users 2 Posts: 3,105 ✭✭✭Blut2


    (I say all of that as someone who voted for FG in both 2011 and 2016 too, for what its worth. I would have said immediately post recession their plan was absolutely worth a try. But I just think anyone looking at the housing figures and progress through any sort of objective, non-ideological lense, now, 10 years later, can very easily see it hasn't worked at all and we need to radically change direction).



  • Registered Users, Registered Users 2 Posts: 1,301 ✭✭✭DataDude


    I think that’s fair enough to want to give it a try. I’m not sure there’s much chance it happens anytime soon but if it does my prediction is:

    Massive cost overruns, government procurement/bureaucracy causing all kinds of delays, tonnes of corruption accusations (most misguided, a few legit), oireachtas committees for each scandal, every poorly designed fire hazard or other evidence of defective workmanship leading to taxpayer bailouts

    And crucially, fewer houses built for a higher cost.

    Hopefully I’ll be wrong.



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05




  • Registered Users, Registered Users 2 Posts: 3,105 ✭✭✭Blut2


    If FG are out of government after the next election it would be very surprising if a government with SF as the largest party didn't ramp up state building of housing massively. Its both a stated goal of the party and entirely in their ideological wheelhouse. Even if FF are a coalition party they've historically had no major ideological issues with state development of housing - the ironclad ideological objections are all from FG - so they would be malleable on the issue.

    The corruption aside none of those problems happened with previous large scale state building of housing in the state, so why would they happen this time?

    And state corruption is far less problematic now across the entire system than it was 30 or 50 years ago, so even that is likely to be far less of a problem. We've come a long way from the Haughey years, as a country, thankfully.

    State built housing is if anything known for being built to a much higher than required standard if you talk to anyone in the construction industry whos worked on it also. The Celtic Tiger apartments, mica scandals etc, that have required billions of euros of taxpayer bailouts in the last few decades, have all been from private sector builds that were focused on taking shortcuts to cut construction costs.



  • Moderators, Category Moderators, Computer Games Moderators, Society & Culture Moderators Posts: 8,543 CMod ✭✭✭✭Sierra Oscar


    The area has not seen a 20% increase in house prices over the last 12 months.



  • Registered Users, Registered Users 2 Posts: 3,572 ✭✭✭Timing belt


    the corruption was always there…When they built CUH in cork there were a boom in building extensions around the city and it wasn’t from extra money in people’s pockets but more to with the availability of cheap materials which was no coincidence. The same thing happened for every large scale public development including council estates.. wrong materials ordered, outright theft, material’s slightly damaged and rejected, discount for bulk buying with discount not passed on etc…the list is endless.

    Yes certain things may have improved but peoples attitudes to the government picking up the bill hasn’t changed….All that will happen is a different gravy train



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  • Registered Users, Registered Users 2 Posts: 7,209 ✭✭✭timmyntc


    To do proper state built housing like those schemes of the 50s and 60s would require a national body and a small set of pre-made plans to be used up and down the country, like how the OPW back in the day came up with free to use drawings for houses, schoolhouses etc of a given standard

    A limited run of designs for 2 and 3 story terraced social/cost rental housing. Then a body like LDA goes through procurement and tendering. We will never go back to direct labour through county councils, the expertise is gone.

    Also having different teams and staffs across all LAs means duplication of roles and experience is not shared - more resources to LDA or similar would have to be the approach



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    All valid concerns, but can I ask ye both where ye stand when you see the state is paying over 500 and 600k for affordable 1 and 2 bed apartments in an area where an investment fund has purchased building(s) with 61 (1,2 and 3 bed apartments) working out at 280k per apartment in December 2023

    Do you think that the state should stop immediately and look at other options



  • Registered Users, Registered Users 2 Posts: 1,301 ✭✭✭DataDude


    I don’t know the specifics of that case but I have oft been alarmed at the prices the State is willing to pay for social housing.
    I would see this as evidence the State can’t even be trusted to procure built houses appropriately. Imagine the disaster they’d make out of the much more difficult task of actually building them from scratch.

    They’re in a difficult spot though. Because everyone wants more spending on social housing. How best to do this?


    - Don’t buy = wasting money on HAP. Inflating rents
    - Buy new builds = you’re overpaying and stopping FTBs getting them
    - But second hand = you’re inflating the market

    My moral view is that state should never ever house anybody for (close to) free in a house that a median income couple couldn’t afford. This would likely limit them to only buying second hand homes in less desireable areas. That brings its own social problems and would be wildly unpopular - therefore we have this bizarre situation where lots of social housing is in estates where only the top 20% of workers could dream of buying.

    But imagine a politician suggesting there should be no social housing in North Wicklow or South Dublin because it’s a poor use of taxpayer money and just ‘unfair’. Most people in the private market can’t live there, so why should there be any expectation of social housing there. They’d be lynched

    I know you’ll say they should build at scale, cheaply in all areas. My belief is they would make an absolute shambles of this and create all sorts of other problems.



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    There's a lot of comparing now to social housing of the past

    Firstly most social housing schemes in the past were successful, it's the worst that get public attention not the best or the median or average

    Second, we are looking at housing for low to median average waged workers rather than low income to high unemployment of the past. Today is not comparable to the past in terms of anti social behaviour outcomes

    Third we are on around median wages and cover our own housing costs. The last place I would want to live with kids is a very wealthy area (which those apartments are in) they will come home every day from school with kids having the latest tech, fashion etc. That's very difficult for an income dis advantaged to deal with. The local schools will have the most expensive uniforms, contributions etc.

    In relation to spending, we have very successful semi states, the most successful is in the provision and maintenance of complex infrastructure in the ESB which is making profits in excess of 800million per anum operating domestically and internationally and well able to outsource where needed.

    The problems are not rocket science and not beyond our "knowledge economy". The starting point should be removing politics from housing as quickly as possible



  • Registered Users, Registered Users 2 Posts: 3,105 ✭✭✭Blut2


    The big issue its not even just the state buying social houses outright at hugely inflated prices though - they've for years now been signing hugely expensive long term leases on private sector apartments, which is surely the worst of all worlds. Massive cost, taking housing off the private sector market, over paying, and no asset to show for it long term. ie:

    https://www.businesspost.ie/news/state-to-sink-another-e450m-into-leasing-of-1000-social-housing-units/

    That aside, the moral hazard problem (and the ruinous financial cost to the state of leasing it) of social housing in very affluent areas that you outline (which is broadly reasonable I think) would be at least partly solved if we engaged in large scale social and affordable housing construction in cheaper locations.

    DLRCOCO for example has a social housing wait time of approx 10 years now. If someone on that housing list was given the offer of either an apartment in DLR in 10+ years time, or a house in Athlone in 6 months, the vast majority would take the latter. Especially if HAP was no longer an option while waiting.

    Anyone who very much wanted to stay in the area wouldn't be forced to leave. But they would have an incentive to leave. And with reduced demand in the area the state could stop this panic buying/leasing at massively overinflated prices.



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    Housing now is the greatest threat to the economy followed by the debt incurred to keep rents and prices at nose bleed levels. The reverse evolution experiment continues



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  • Registered Users Posts: 2,719 ✭✭✭Nermal


    It would be 'wildy unpopular' with most of the media & our noisy NGO ecosystem, but it would be sweet music to the type of people who get up early in the morning. Who was the government elected to represent again?



  • Registered Users, Registered Users 2 Posts: 7,209 ✭✭✭timmyntc


    Rent caps are failing to limit rental price increases, who could possibly have seen this coming



  • Registered Users, Registered Users 2 Posts: 4,540 ✭✭✭tigger123


    The 'people who get up early in the morning' was a comment made by Leo who, as leader of FG, f*cking tanked the last election for his party and lost 15 seats.

    So, not really sure the Government was elected to represent that particluar viewpoint.



  • Registered Users, Registered Users 2 Posts: 4,764 ✭✭✭Villa05


    The only way FG represent people that get up early in the morning is by pushing them further and further away from their employment thereby ensuring they have to get up earlier in the morning and get home much later



  • Registered Users, Registered Users 2 Posts: 1,301 ✭✭✭DataDude


    I agree but the most popular party in the country right now has three core economic pillars

    • Higher income taxes
    • Abolish our only wealth tax
    • More social housing

    Its clearly the flavour of the day politically



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