CSO - Dublin House prices fall in Feb 2014, 2nd month in a row

LG1234

McGrath5 wrote: »

Its madness in Dublin ATM.

I know of somebody who offered well over the asking price for a property, but because it was not cash offer ie he was taking out a mortgage on the property, the estate agent would not pass the offer onto the vendor. The estate told him that they would only be accepting cash offers.

Is this normal practice now?

What appears to be happening is the banks are giving mortgage approval in principle to everyone, everyone bids on houses, creating a the frenzy and bidding wars and thus increasing the prices. When the highest bidder goes to draw down the mortgage, the bank are offering less. Therefore if you want to actually sell your house cash is king for a guarenteed sale.

The Spider

Villa05 wrote: »

This poster said my post was
"uninformed, guesswork and speculation?"

:rolleyes:

Economics 101 don't sell at a loss.

Villa05

The Spider wrote: »

No, no I'm not materials cost what they cost, the only area to trim would be wages, typical nonsense I've come to expect.

Let's get them working for nothing, how dare they charge for their labour.

Or are you suggesting cutting corners like priory hall??

So tell me again what point am I missing!

I'm going to try to explain to you but, you may need to remove the blinkers to see the bigger picture

Land prices fell further than property prices

Materials have gone up in price because the volume of sales is not currently present. A construction firm building many houses could definitely negotiate a substantial discount on current material prices

Most industries have adapted and cut there cloth to measure to survive the new reality. Construction should be no different.
if low supply of houses = dearer houses, surely high supply of construction labour = lower wages. If the council can get people to work for their dole plus €50, the construction industry can get workers for 60/70% of what they earned during an unsustainable bubble.

Priory hall was built when prices were crazy and is a reflection of incompetence, dishonesty, cronyism that was always part of the construction industry. It is hardly surprising that a person who does not research properly would be overcharged for construction work in such an environment

marathonic

Villa05 wrote: »

This poster said my post was
"uninformed, guesswork and speculation?"

:rolleyes:

I think everyone understands that houses were sold and houses were built - but a very, very small number compared to historical averages.

The latest building regulations also add a further cost to building - I've seen figures of €10 - €15 per square foot touted. I'm not sure of the accuracy of these figures but you must be talking about a €210,000, or thereabouts, build cost for an average 1,600 square foot house. When you add the cost of the land to this, it rules out building in the vast majority of the country given what can be bought with the same money.

MysticalRain

The Spider wrote: »

No, no I'm not materials cost what they cost, the only area to trim would be wages, typical nonsense I've come to expect.

Let's get them working for nothing, how dare they charge for their labour.

Or are you suggesting cutting corners like priory hall??

So tell me again what point am I missing!

Lots of strawman arguments in that post and moving the goalpost.

Nobody is asking anyone to work for nothing.

Prior Hall was built at the height of the boom when construction wages were inflated. So the argument that "if only we pay builders/bankers/politicians/etc more, they will do a better job" is ridiculous.

Materials and wages are not the only costs involved in building houses - land and professionals fees, which also are not competitive, are factors too.

So there's a lot more that can be done before we ask the average citizen to start shelling out 500,000 for semi-d's in another repeat of the property bubble.

The Spider

MysticalRain wrote: »

Lots of strawman arguments in that post and moving the goalpost.

Nobody is asking anyone to work for nothing.

Prior Hall was built at the height of the boom when construction wages were inflated. So the argument that "if only we pay builders/bankers/politicians/etc more, they will do a better job" is ridiculous.

Materials and wages are not the only costs involved in building houses - land and professionals fees, which also are not competitive, are factors too.

So there's a lot more that can be done before we ask the average citizen to start shelling out 500,000 for semi-d's in another repeat of the property bubble.

See the post above yours, 210000 build cost, outside of the land, and that's not even SCD where a site will add considerable cost.

marathonic

Villa05 wrote: »

Materials have gone up in price because the volume of sales is not currently present. A construction firm building many houses could definitely negotiate a substantial discount on current material prices

Economies of scale does play a part, but many other things have impacted material prices. Just because a firm is building many houses doesn't mean that they are going to purchase materials for anywhere near the prices paid 6-7 years ago. Some examples of other factors include:

• General Inflation;
• Lack of competition where kitchen, fireplace, etc. companies have closed due to bankruptcy or simply pulling out of the market
• Quarries closing down - in a lot of areas, it would take a long, long time to fulfill orders if a sudden, significant, increase in demand came online. I know that, in theory, a lesser number of quarries should have been shut down closer to Dublin - but the closure of quarries outside Dublin will have lead to projects in the peripheral counties having to use Dublin quarries where there is a limited amount of raw materials (I wouldn't blame the quarry owners for demanding significantly higher prices here)
• In some cases, there are building materials that could have been sourced locally during boom times but are now required to be shipped in from the UK or further afield - adding further to the cost

Villa05 wrote: »

surely high supply of construction labour = lower wages. If the council can get people to work for their dole plus €50, the construction industry can get workers for 60/70% of what they earned during an unsustainable bubble.

Based on local evidence, people are unwilling to work if the earnings don't exceed the dole significantly. For some, this is simply to do with sheer laziness. For others, it's because the dole is designed in such a way that there are many hoops to jump through before getting back on it if the work dried up.

I know of people that have done some of these trainee type roles for dole plus a small bonus - but they did them because their hands were tied (the dole would know that a job was being offered by the council to someone on jobseekers allowance).

A job being offered by a local tradesman to a jobseekers recipient is significantly more likely to be turned down than any type of job where there is the risk of the dole office finding out.

Villa05

marathonic wrote: »

I think everyone understands that houses were sold and houses were built - but a very, very small number compared to historical averages.

The latest building regulations also add a further cost to building - I've seen figures of €10 - €15 per square foot touted. I'm not sure of the accuracy of these figures but you must be talking about a €210,000, or thereabouts, build cost for an average 1,600 square foot house. When you add the cost of the land to this, it rules out building in the vast majority of the country given what can be bought with the same money.

There were were far more houses sold in each of the years 2009, 2010, 2011 than there was in 2012 (going by mortgage draw-down figures)

The latest building regulations are to ensure that houses are built to plan. Most serious construction companies would have that capability in house

Agree it would not be viable to build in most areas of the country, but most of the rest of the country does not have under supply issues. Dublin does and it is certainly viable to build at current prices in Dublin

Villa05

McGrath5 wrote: »

Its madness in Dublin ATM.

I know of somebody who offered well over the asking price for a property, but because it was not cash offer ie he was taking out a mortgage on the property, the estate agent would not pass the offer onto the vendor. The estate told him that they would only be accepting cash offers.

Is this normal practice now?

Madness is a giveaway sign of a bubble close to bursting

MouseTail

Villa05 wrote: »

Land prices fell further than property prices

Materials have gone up in price because the volume of sales is not currently present. A construction firm building many houses could definitely negotiate a substantial discount on current material prices.

You sure about that? I really don't think its true, land in areas suitable for building retained its value. Also a far bigger influence on material cost is the enormous growth of the BRIC countries. Copper, lead etc, astronomical compared to 10 years ago.

marathonic

Villa05 wrote: »

The latest building regulations are to ensure that houses are built to plan. Most serious construction companies would have that capability in house

They'll have the capability to build houses to plan - the problem is that the energy efficiency measures and, moreso, the increased professional fees and certifications required along the way are the drivers to the increased cost, not the inability of the builder to read an architects drawings.

marathonic

McGrath5 wrote: »

Its madness in Dublin ATM.

I know of somebody who offered well over the asking price for a property, but because it was not cash offer ie he was taking out a mortgage on the property, the estate agent would not pass the offer onto the vendor. The estate told him that they would only be accepting cash offers.

Is this normal practice now?

I have only heard of this happening where the property was unmortgageable for whatever reason. Of course, I'm well outside Dublin so your friends experience may well be the norm.

Villa05

MouseTail wrote: »

You sure about that? I really don't think its true, land in areas suitable for building retained its value. Also a far bigger influence on material cost is the enormous growth of the BRIC countries. Copper, lead etc, astronomical compared to 10 years ago.

Land

52-acre development site in Shankill, Dublin originally acquired for €52m is now worth 5c in the euro or the equivalent of €50,000 an acre, not totally dissimilar to the €100,000 an acre asking price for a site in Rathangan reported earlier this week.

http://namawinelake.wordpress.com/2010/03/12/an-acre-of-development-land-currently-worth-e50000-in-co-dublin/

Lead/Copper are currently trading at the same price they were in 2007, probably higher than 2004 price but there you go

Villa05

marathonic wrote: »

They'll have the capability to build houses to plan - the problem is that the energy efficiency measures and, moreso, the increased professional fees and certifications required along the way are the drivers to the increased cost, not the inability of the builder to read an architects drawings.

Will a good construction firm have these professionals employed? much cheaper to make a house energy efficient when it is being constructed. Current prices will easily absorb this cost

jay0109

Spider

always good to have a contrarian view on threads like this, and unlike a lot on here, I usually take on board what you say. But that post was trolling IMO.
Loads of generalisations and wild assumptions. Poor by your normal standards

And as for this from Maarathonic

you must be talking about a €210,000, or thereabouts, build cost for an average 1,600 square foot house

Have you anything to back that up or have you plucked it out of your ####!
I have mates down the country who have built 2,000 sq ft + houses, (culchie mansions if you like) and I can assure you that they did'nt spend anywhere near that, even with site prices thrown in on top

The Spider

jay0109 wrote: »

Spider

always good to have a contrarian view on threads like this, and unlike a lot on here, I usually take on board what you say. But that post was trolling IMO.
Loads of generalisations and wild assumptions. Poor by your normal standards

And as for this from Maarathonic

Have you anything to back that up or have you plucked it out of your ####!
I have mates down the country who have built 2,000 sq ft + houses, (culchie mansions if you like) and I can assure you that they did'nt spend anywhere near that, even with site prices thrown in on top

Fair enough, could've been less general, hands up!

Villa05

Merli wrote: »

There are also a lot of delusional bidders out there. Through no fault of their own, these bidders honestly believe they will get final drawdown of the amount they are bidding. This is not the case.

Unfortunately, these bidders are unknowing pawns in the process as they are raising the prices for 'genuine' bidders and cash buyers.

http://www.herald.ie/opinion/columnists/dan-white/banksmortgage-approval-trick-pushes-up-prices-30170535.html

View the house, make your bid if it ticks most of your requirements and most importantly make the estate aware of all possible advantages you may have over other 'bidders' e.g. Not in a chain, 50% cash buyer, flexibility around closing dates etc.

Then walk away - If you are up against a delusional bidder, let the game play out and wait for that phone call down the road to see if you're still interested.

With 'Ghost' bidders and 'Delusional' bidders aplenty, care must be take not to add to the current bidding wars that are taking place.

Wonder how much research and checking was done on the mortgage quotes handed out at this stall

moxin

Damien Kiberd reckons the banks are conning us and house prices going up helps Noonan with the mirage of stability.
http://businessetc.thejournal.ie/readme/michael-noonan-house-prices-damien-kiberd-1410085-Apr2014/?utm_source=facebook_short

kennyb3

March data out now.

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexmarch2014/#.U2DKD4FdXSl

Let the carnage commence

lima

kennyb3 wrote: »

March data out now.

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexmarch2014/#.U2DKD4FdXSl

Let the carnage commence

Gaffs in Dub slightly up 0.3%
Apts in Dub down 2.1%

Should this dampen the crazy outbidding going on? Or are the bad areas dragging the rest down?

stevedublin

Residential property prices fell by 0.7% in the month of March

thats 3 months in a row

ted1

stevedublin wrote: »

Residential property prices fell by 0.7% in the month of March

thats 3 months in a row

apples and oranges.

houses up, apartments down.

Nama are flogging off entire apartment blocks, that will vastly affect the apartments pricing.

gaius c

lima wrote: »

Gaffs in Dub slightly up 0.3%
Apts in Dub down 2.1%

Should this dampen the crazy outbidding going on? Or are the bad areas dragging the rest down?

Don't forget that CSO data excludes cash sales.

I've done a breakdown based on PPR figures.

Villa05

Interesting noise coming from the central Bank

http://www.independent.ie/business/personal-finance/property-mortgages/honohan-well-burst-any-bubble-in-housing-market-30234660.html

Dr Honohan said houses in Dublin were no longer “under-valued”, based on economic models used by the Central Bank......

“There is no way we are going to let things get out of hand again in terms of a bubble,” Dr Honohan told the Oireachtas Finance Committee yesterday.

The Central Bank could intervene by forcing banks to insist people getting a mortgage have a larger deposit or by capping the size of a home loans compared to household income.

Villa05

gaius c wrote: »

Don't forget that CSO data excludes cash sales.

I've done a breakdown based on PPR figures.

Super work Gaius

foxy06

gaius c wrote: »

Don't forget that CSO data excludes cash sales.

I've done a breakdown based on PPR figures.

So we should all wait til next month when houses will be free :-)

gaius c

I'm sorry?

Edit: oh yeah I get you now. They will also be free the month after too. ;-)

ted1

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexapril2014/#.U4YB9XJdVXG

moxin any thoughts?

handlemaster

The confidence is main stream now.

Rother

foxy06 wrote: »

So we should all wait til next month when houses will be free :-)

Well that worked out