Irish Property Market 2020 Part 2

investment funds do buy lots of new apartments but for a special discounted price, which the Irish people would never get -just check Abelard Square, Phoenix Park Racecourse, Dublin 15 in property register from 2020-06-10 -at least 30 went for 260k average, can you get that price??? Exactly one hand moisturizes another one..

boma_12 wrote:

investment funds do buy lots of new apartments but for a special discounted price, which the Irish people would never get -just check Abelard Square, Phoenix Park Racecourse, Dublin 15 in property register from 2020-06-10 -at least 30 went for 260k average, can you get that price??? Exactly one hand moisturizes another one..

If the state was buying them they would be 500k

I'm sure the builder did not make a loss on them either. Kind of rubbishes the claims you see bandied about with regards to the cost of construction.

Irish people are taken for fools in every aspect of property, heavily supported by the Gov of course

LasersGoPewPew wrote: »

The government is allowing investment funds to buy up 95% of 3644 new apartments. Developers are only happy to offload in bulk because it saves them hassle and keeps cash flow going and profits flowing, but this prevents 3462 people from owning a home. This is increasing competition among first time buyers and keeps prices inflated by limiting supply, this is part of the reason why we're not seeing drops in desirable areas. The government needs to be lobbied to limit how many apartments or new developments can be purchased by investment funds, they are contributing to this crisis.

https://www.google.com/amp/s/www.irishtimes.com/business/construction/just-8-000-houses-built-last-year-offered-for-sale-on-open-market-says-cif-1.4177876%3fmode=amp

The government are buying them up and renting them off the REITs too. So they are complicit

Assetbacked wrote: »

This is absolutely spoof that the CIF and other industry lobbyists wheel out. Do you think there are no Irish people willing to buy new apartments? Of course there are but they are elbowed out by the insititutionals.

There may be people willing to buy new apartments. The problem is those willing to build them? Where do you think such people get their finance?

Assetbacked wrote: »

If they weren't being built to rent they would be built to sell and money would be made. Those with the money to build them would still make money.

If they weren't being built to rent they may well not be built at all. The developers don't have the money, they rely on finance. Finance perspective building is extremely expensive. The general situation facing developers is that they get no credit for building materials and have to pay for labour as the build progresses. If there is large interest accruing on this it can make the development on profitable. If anything goes wrong such as a delay the whole thing becomes a zero-sum game. The funds approach a developer and offer to provide funding as the build progresses and pay a fixed sum at the end. This removes all the uncertainty and enables projects to start and move the completion. It is nonsense to suggest that the development would be built anyway. Very few would.

Assetbacked wrote: »

If they weren't being built to rent they would be built to sell and money would be made. Those with the money to build them would still make money.

Not necessarily, a builder building houses on a site can build in batches. He has limited exposure, yes site is an up front cost but houses can be drip fed onto the market. From start of construction to finish a house can be build in as little as 12 weeks but 20weeks is very doable. As well some builders may insist on stage payments but not extremely popular with buyers or banks because of risk involved.

Capital cost to build a house might be 200k(all vat can be claimed back as an ongoing expense and added at end. Builder in this situation can manage to get 60 days credit off suppliers. So on a 10 houses in progress with a builder a million in finance may keep him going. As well final finish of the site the start of which can be left until 50-60%complete so big cashflow saved there

Apartment block of 40 apartments are no cheaper to build than houses complete block and need to be finished before annyone is allowed to live there as well they are harder to pre sell and project may take two years. There is huge risk in an economic downturn that even takes 4-6%off the price. Builder would need 8 million in total finance and most of that would be in play for 12 months. The sums needed for a 100+apartment site as well as maybe carpark and maybe a commercial element could be 20 million plus

Iceman29 wrote: »

https://www.irishtimes.com/business/economy/property-price-growth-slowed-in-may-as-transactions-plunged-1.4305091?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fproperty-price-growth-slowed-in-may-as-transactions-plunged-1.4305091

Things aren't looking too rosy for house prices... looks like there was a decrease before this Covid-19 sh1tstorm arrived.
Residential property prices rose only 0.3 per cent across the State in the 12 months to the end of May while prices in Dublin were unchanged, according to the Central Statistics Office (CSO).

The data shows that growth in property prices is continuing to slow down. In the year to April, prices rose 0.7 per cent.

Since January prices for all property in Dublin has fallen from 124.5 to 124.1
Base 100 was 2015
So only a very small drop with a high of 127.7 in Oct 18.
Prices just continuing their gradual steadying of the last 18 months or so .
Come late in the year when the mortgage approval decline starts to bite then the market will show its true colours

SozBbz wrote: »

So, growth at 0.3% is your version of a sh1tstorm?

I don't think there are any posters here suggesting that there will continue to be massive YoY growth - I think those of us who are not overly pessimistic about the market still thought that we were probably in and about at affordability limits and even some movement +/- a few % points, thats normal in a functional market. And we have held that opinion since well before Covid19.

I think those that think a ****storm like 2008-14 will take place are deluded. I think any so called correction will be sub10%. The fundamentals of supply are totally different to 2008

Claw Hammer wrote: »

If they weren't being built to rent they may well not be built at all. The developers don't have the money, they rely on finance. Finance perspective building is extremely expensive. The general situation facing developers is that they get no credit for building materials and have to pay for labour as the build progresses. If there is large interest accruing on this it can make the development on profitable. If anything goes wrong such as a delay the whole thing becomes a zero-sum game. The funds approach a developer and offer to provide funding as the build progresses and pay a fixed sum at the end. This removes all the uncertainty and enables projects to start and move the completion. It is nonsense to suggest that the development would be built anyway. Very few would.

At every opportunity, you allege that the REITs provide the funding for the building of Apartments. Your argument being they are the good guys and that without their funding, they wouldn't have been built.

Can you supply evidence for this please, because all of the news reports I have seen state categorically that the REITs purchased the apartments on completion. Not a single source that I have found has said REITs are funding construction.

https://www.irishtimes.com/business/construction/just-8-000-houses-built-last-year-offered-for-sale-on-open-market-says-cif-1.4177876

Assetbacked wrote: »

https://www.irishtimes.com/business/economy/property-price-growth-slowed-in-may-as-transactions-plunged-1.4305091

The narrative in the biased media is that prices not continuing to rise must be seen as a bad thing, not as a correction of an inflated market. Phrasing the data as "price growth slowdown" is to display pure bias.

The article then throws in quotes to let us all know there is nothing to worry about. For example;

KBC quote;

Oh, that's a relief, so the pandemic will just result in less transactional activity, not a reduction in prices.



Ah, so we still have a bit of headroom.

I agree the article is a bit unprofessional. To say "price growth slowdown" makes no sense for the price changes of +/-0.x %. Those are extremely low numbers to tell directions.
On other note your interpretation is way more bias than the article itself.

schmittel wrote: »

I wouldn’t agree with any of that at all. They are seeking planning permission on the basis that they will not be sold to the public.

It’s a business model and one that is increasing (or was pre covid). Claw Hammer is completely correct as far as I can see.

Its the government model to supply "accommodation".
SHD's are currently the main vehicle for this, with 300-500 unit projects being rushed through planning anywhere there is some spare ground, often with 20% or more officially going to social housing through Section V and probably a lot more eventually.

The council have even stopped peppering social throughout new projects, instead concentrating it in individual blocks or buildings as they can get better management rates (councils words not mine). They are ignoring the reason for Section V, to avoid future ballymun's, dolphins bar's and Darndale's, all for saving a few quid in the short term.

Dublin is set to change quite drastically in the next few years based on this, drastically for anyone on or near brown sites or new build estates but to a degree in older settled locations where there is available space, and nobody locally with the clout to challenge it in the high court.

If this change is for the good, probably depends on where you sit in relation to property, if you own, rent or are in social accommodation, with owners benefiting the least, followed closely/equally by people who want to buy but never even get the option as the stock all goes to REIT's for long term rental.

Id rather the value of my house drop, allowing more individuals & families on the property ladder as at least they will be invested in the area and want to see it kept and improved. Renting does not give someone "skin in the game" in an area, its just a place to live before you buy somewhere else.
Unfortunately this is the way of things and probably the only major reason that would make me consider leaving Dublin.