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

Ireland desperately needs house building acceleration to continue.

All the companies who build these houses in unison -

‘We will build less houses under these policies’

’Sounds like some good policies of substance. We should try those’

The political priority was to bail out those who overpaid in the mid-2000s by getting prices back up to bubble levels. Affordability was never on their minds.

In fairness they are never going to be positive about policies that hurt their profit margins. It is in their interest not to see a change in policy because their interest is maximising profit for shareholders, not affordable housing.

Also in this morning's article the main issue with sinn Fein policy is that any change of policy "will take time to adjust to".

“What we don't need here is radical intervention by the new government or a complete overhaul of existing policies because it will take time to adjust to what those new policies are,” he said.

And

If there’s a change in government, whoever that ends up being, and they reinvent the wheel and we have to go through that whole process all over again, that is going to create uncertainty in the sector, which slows us down,” Gallagher said

This is mostly playing the poor mouth and not wanting any change from current situation where government is subsidising apartment builds massively AND subsiding buyers massively. Turkeys won't vote for Christmas, so these articles aren't a surprise.

see housing output when house prices declined

Housing output declined because of a complete financial meltdown seeing many developers and builders going bust as they themselves were significantly overleveraged too.

How about the fact that with lower retail price for new homes in the 2000s, we still built even more than we are today?

There’s a significant cohort of people who’d love to see Cairn, Durkans etc. posting record losses but still racing to increasing their production and competing to sell at the lowest possible price

This is a strawman argument. These people do not exist in significant numbers. Do you have any evidence of the existence of this significant cohort?

At its core, housing stopped being built in any material numbers for about a decade because the price you could sell a house for was not sufficient to cover the input costs and compensate for the risk of doing so.

If there is enough profit to be made from an economic activity. Someone will find a way to do it.

The input costs of delivering new housing in 2024 vs 2000 are not comparable. Neither is the skill set of our population, where young people have been scared off pursuing building trades for the last 15 years because the sector was not stable or profitable.

You can’t seriously argue that there isn’t an overwhelming negative sentiment towards developers and housing financiers in Ireland.

I recall developers complaining that NAMA were preventing them from finishing off developments

Windows, doors, heating boilers, labour etc were a fraction of there current cost in 2014 when I was buying them

Land was a fraction of current cost, recovery was well under way at this point

Housing shortage risk identified as early as late 2012 for Dublin

I disagree that housing could not be viably built from at least 2014. It's probably the greatest missed opportunity of our lifetimes. The time to invest is when everything is cheap and resources plentiful but again this is a narrative that is continually thrown out and never questioned

I'd be fairly sure the majority of first time buyers are getting 35 year mortgages already.

then we must be almost at max affordability at that rate

29 years is average mortgage as per central bank data on FTB’s

https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures/new-mortgage-lending-data

The extent of the failure of current housing policy set out in fairly stark terms. At a minimum output needs to double.

Pandering to vested interests is not the solution

Pandering to vested interests is one way of putting it.

Another is ‘working with the organisations who build the thing we desperately need in the hopes they might produce more’.

Of course you need to critically examine what they ask to avoid unreasonable requests but all they’ve said in the quoted article is

‘If you reduce our profitability and destabilise the environment we’ll produce less’.

Thats just common sense and no doubt we’ll see it in the figures pretty quickly if SF press ahead with populist rhetoric on housing.

The narrative around developers is akin to saying we need to fix health crisis by taxing doctors more and ignoring their requests because they are merely ‘vested interests’

So thats a "I have no evidence" for your claim so? You've provided zero sources for exactly what % of the "sigificant amount" you're claiming was paid for by religious orders. Talking about general increases in state education funding is not evidence of religious funding in any way, its peak whataboutery.

For the yearly cost of HAP I gave you a reliable source link to an exact figure for state spending on rent subsidies, over €1.22bn in 2021 and climbing since. Thats billions of euros of tax payers money being wasted, providing a bad return for our money nad driving up rents in the private sector unneccessarily while we're at it.

I read the exact opposite to this the other day. Our ‘big builders’ are not big enough compared to most other countries. Top 10 home builders here produce 20% of homes vs 40%+ in UK.

In any market there is always a balance to be struck between having an Oligopoly vs having too many participants and thus not achieving economies of scale to deliver efficiently. I’m not an expert in the area but it is the view of Goodbody that we are in the latter camp.

https://www.rte.ie/news/business/2024/0221/1433429-lack-of-scale-in-homebuilding-remains-major-issue/

Ah jeez, waffling on about Air BnB now. This was proven to be of minor significance during Covid but here we are with people still bringing it up.

Tell me why we need to “at least double our output.” That’s what I was referring to.