"Collapse in house prices is good for the economy"

SkepticOne

BigEejit wrote: »

(or ask the government to buy them for large amounts of cash and then demolish them.

Mainly this second one.

The argument put about by the likes of Tom Parlon is that builders can't go below the cost of build and they are hitting that now. Therefore the government must step in and help make up the difference. Otherwise there will be a shortage of houses for people to buy.

People can't pay what builders want and builders can't lower the price. Therefore the tax payer must intervene.

Unfortunately it is working and the government is subsidising the builders.

angryfinny

Viewed a detatched house in a housing estate in Co. Limerick. Met with both builder & auctioneer who advised house for sale at builders finish costs 320,000 euro.

However, if we wanted to make a savings builder advised we could buy the house as it stands (which was unfinished), we could pay 220,000 immediately and 68,000 euro to builder after to finish to builders standard.

This made us think that the builder may be under pressure with the banks as he needed the money immediately. Also, would this mean the estate would not be completed as it is still very much a building site.

Feel that we should offer 220,000 for a builders finish house. Would this be the right offer to make considering the market that's out there?

D3PO

angryfinny wrote: »

Viewed a detatched house in a housing estate in Co. Limerick. Met with both builder & auctioneer who advised house for sale at builders finish costs 320,000 euro.

However, if we wanted to make a savings builder advised we could buy the house as it stands (which was unfinished), we could pay 220,000 immediately and 68,000 euro to builder after to finish to builders standard.

This made us think that the builder may be under pressure with the banks as he needed the money immediately. Also, would this mean the estate would not be completed as it is still very much a building site.

Feel that we should offer 220,000 for a builders finish house. Would this be the right offer to make considering the market that's out there?

hmm dunno about that. if he goes to the wall you end up with a half finished house, plus the price at 220,000 + 68k sounds like it might still be overpriced

jmayo

mrgaa1 wrote: »

What inevitable are you talking about? If a developer owes for example 100k per unit they sell to the bank for the loans that are outstanding and has to sell at 80k the maths don't work. The banks don't want the houses - if the builder can't sell them what makes you think the banks will. Anyone who thinks that a house that was on the market for 300k will be soon on sale for 100k is quite simply barking mad - and I'm talking about in general not just a one off house. This will not happen.
Would it not be better for the bank to allow the builder to sell at a price that does not put people out of work - surely its in the governments interest as they have 25% of AIB and BOI to allow builders the chance to sell houses and not have more people on the dole? I'm not just looking at builders I'm talking about business's in general - they all need help.
House prices do not have WAY further to go - they are almost if not already at bottom. There will be a long period of slow selling - that is what history tells us after previous recessions.

And people wonder why we are in this mess ?
Are you still voting FF as well :rolleyes:
Can I ask do you actually believe the sh**e you are pedalling ?
If you do then God help your family

mrgaa1 wrote: »

http://www.rte.ie/business/2009/0514/kingspan.html
http://www.rte.ie/business/2009/0514/economy.html
http://www.rte.ie/business/2009/0423/eurozone.html


IMHO we are at this bottom that we are looking for - how long we stay there is another question. The above links give some views on where we are - maybe they are right maybe not. As stated in previous posts I've seen recessions before and we'll come through this one. And from being in recessions before I can see the signs of recovery and they are there now. Its a long road ahead.

You know what you are completly right.
You should go out right now and buy two houses because they will never be as cheap again.
Also you are doing a service to the country, espeically keeping the develoeprs and builders in work.

oceanclub

jmayo wrote: »

You know what you are completly right.
You should go out right now and buy two houses because they will never be as cheap again.
Also you are doing a service to the country, espeically keeping the develoeprs and builders in work.

Everyone's entitled to make a profit on investments. If they can't, they should be refunded by the taxpayer.

Hey, who do I ring up about my Eircom shares?

P.

jmayo

oceanclub wrote: »

Everyone's entitled to make a profit on investments. If they can't, they should be refunded by the taxpayer.

Hey, who do I ring up about my Eircom shares?

P.

Yep got it in one
Didn't he know about the Eircom shareholder bailout :rolleyes:
Don't tell everyone

oceanclub

jmayo wrote: »

Yep got it in one
Didn't he know about the Eircom shareholder bailout :rolleyes:
Don't tell everyone

I'm not looking for money; just Mary O'Rourke's head on a pike.

P.

Shambo

I am bewildered by some of the posts on this topic.

What is this nonsense about developers/builders HAVING to make profit? They are in business, business is a RISK,, nothing, absolutely nothing is guaranteed.
That is like someone doing the lottery expecing assurances that they will win something.

Put it like this, I work in transport and if my trailer coming out of Europe is 2/3 full on a Friday a.m, I take whatever I can get to fill it out.

RGDATA!

mrgaa1 wrote: »

House prices are dictated by the cost of land, cost of build, cost of charges, profit and VAT.

The *cost* of building houses is dictated by the above. House *prices* are dictated by the market.

mrgaa1 wrote: »

Lets take a scenario:
Land bought with planning permission for 50 houses at €4million.

Obviously if you spend ridiculous amounts of money on the land in the first place the cost of building these houses is going to be high, but that won't be a problem so long as property values keep rising for ever and ever.

oceanclub

RGDATA! wrote: »

The *cost* of building houses is dictated by the above. House *prices* are dictated by the market.

Obviously if you spend ridiculous amounts of money on the land in the first place the cost of building these houses is going to be high, but that won't be a problem so long as property values keep rising for ever and ever.

According to MrGaa1's logic, Sean Dunner is going to have to charge over €2million per apartment in Ballsbridge to cover the cost of the land (even with his original high-rise plan, the minimum price was €1.25) and, well, people are just going to have to pull their socks up and jolly well pay him. And presumably if they won't pay him €2m each, he should get a bailout.

P.

Tigger

angryfinny wrote: »

Viewed a detatched house in a housing estate in Co. Limerick. Met with both builder & auctioneer who advised house for sale at builders finish costs 320,000 euro.

However, if we wanted to make a savings builder advised we could buy the house as it stands (which was unfinished), we could pay 220,000 immediately and 68,000 euro to builder after to finish to builders standard.

This made us think that the builder may be under pressure with the banks as he needed the money immediately. Also, would this mean the estate would not be completed as it is still very much a building site.

Feel that we should offer 220,000 for a builders finish house. Would this be the right offer to make considering the market that's out there?

offer 150 as is

Freddie59

Tigger wrote: »

offer 150 as is

+1 to that. Or buy somewhere mature. You could be living on an unfinished building site for yonks.

Gurgle

Tigger wrote: »

offer 150 as is

And let us know how you get on