Property Market 2016

OfflerCrocGod

OfflerCrocGod wrote: »

Land reform is complex and could be used as a tool to attack the politician that attempts it. Pushing up prices with debt is simpler and will be opposed by fewer people.

Sad but true

gaius c

Diarmuid wrote: »

Talk about fixing the wrong problem. According to Ronan Lyons, to build a 2 bed apartment in Ireland costs 280k excluding land costs. Fix that first before we go back to the good old days of shouldering the younger generation with crippling debt

Sure you can justify anything when you use the 2006 value of the land as your starting point.

Diarmuid

gaius c wrote: »

Sure you can justify anything when you use the 2006 value of the land as your starting point.

I'm not sure I get your point?

gaius c

280k to build without the land cost factored in so even more when you do factor it in (and you can be sure developers want us to cover the original cost of the land)?

If that's the answer, we need to revisit the question.
There's a lad building passive houses in Wexford for less than that and he's including the cost of the land in his prices.
The 280k cost is nonsense. I don't care what justification is used to back it up because the market simply can't support it.

Villa05

Half the population of Dublin will have to live in a tree house in the woods. Imagine the carnage that will happen when interest rates return to normal if that is the cost of basic accommodation

Bob24

Villa05 wrote: »

Imagine the carnage that will happen when interest rates return to normal if that is the cost of basic accommodation

Very true. If the CBI wanted to maintain the same level of macro-prudential protection, increasing interest rates (i.e. increasing monthly repayments for the same mortgage amount) should mean reducing the maximum LTI ratio, and therefore reducing credit availability.

Diarmuid

gaius c wrote: »

The 280k cost is nonsense. I don't care what justification is used to back it up because the market simply can't support it.

Ronan Lyons wrote:

The best figures I can find suggest that the cost of building a two-bedroom apartment in Ireland currently is roughly €280,000. This figure excludes any land costs but includes VAT, local authority levies and a 12.5pc profit margin.

I wonder if he could give a breakdown of the costs. Likewise your friend in Wicklow

yqtwqxqm

There might be a lot of rental properties on the market soon too.
Now that we have very agency or politician advising people to overhold when owners want to sell, i just see landlords being fed up beyond belief and all dropping their rentals like a hot potato.
Id hate to be a landlord in this day and age.

quadrifoglio verde

Diarmuid wrote: »

I wonder if he could give a breakdown of the costs. Likewise your friend in Wicklow

I emailed him on the back of debate in the other thread (what's the supply issues)

In it he said that the figures aren't concrete but from talking to a lot of people in the apartment building industry that's the costs.

A person who blogs on the building regulations (I know) gives similar figures as well and his is based of Bruce Shaw

Gandalph

quadrifoglio verde wrote: »

A person who blogs on the building regulations (I know) gives similar figures as well and his is based of Bruce Shaw

I see a lot of building costs cross my desk every day and can honestly say that that 280k is not in the least bit accurate. Those figures by Bruce Shaw are overstated (as are most others that you find online). Construction companies, just like most others, are free to be haggled with on prices. There is no textbook on construction prices unfortunately (well there is, just not reliable ones, Spons springs to mind).

Gandalph

johnp001 wrote: »

Houses: asking price per sq.ft by region

This asking price data is broken down by area in Dublin

This is interesting, whats the source for this info?

johnp001

Gandalph wrote: »

This is interesting, whats the source for this info?

If you click on the "raw data" link it tells you that it is from myhome.ie
This is not my data. A poster on thepropertypin website collates this data and he describes his methodology on that site.

Bob24

Gandalph wrote: »

I see a lot of building costs cross my desk every day and can honestly say that that 280k is not in the least bit accurate. Those figures by Bruce Shaw are overstated (as are most others that you find online). Construction companies, just like most others, are free to be haggled with on prices. There is no textbook on construction prices unfortunately (well there is, just not reliable ones, Spons springs to mind).

Interesting - What number do you have and what is your source?

johnp001

David McWilliams take on building costs:
With a few simple steps, State could provide social houses for €800 a year

Gandalph

McWilliams says 70-75 psf yet Lyons reckons 170-180 (or somewhere there abouts), while its true that houses are cheaper to build than apartments, the variation is not that great. These guys are just taking wild stabs at guesstimating building costs.

Interesting - What number do you have and what is your source?

Numbers vary depending on project and spec, back of the cigarette pack I would say €160 all in (land, materials, fees, contingency, etc).

Cuddlesworth

I think a number of individuals still quote mid 2000's building costs, where work was subcontracted out 2-3 times with everybody taking a large cut along the way. And where wage expectations were way out of line due to market forces.

The_Conductor

Cuddlesworth wrote: »

I think a number of individuals still quote mid 2000's building costs, where work was subcontracted out 2-3 times with everybody taking a large cut along the way. And where wage expectations were way out of line due to market forces.

Wage expectations are still quite remarkable- what happened during the bust in the construction industry- was people were laid off- there were not wage reductions commensurate with the collapse of the industry- people were simply let go. Now that the sector is improving again- many of the trades imagine its 2005 all over again- and they can get away with extortionate wage demands- based this time on the irrefutable fact that a significant cohort of those with construction skills- up sticks and left these shores for a better life over the last decade (and who can blame them for doing so).

There seems to be some sort of a denial of reality going on- perpetuated in no small part by the various unions.

Sleepy

McWilliams figures seem to be based on a conversation with a mate who's a builder. Fair enough, maybe that is the cost to build a 3 bed semi. However, before multiplying that by x thousand units, lets bear in mind that it excludes the costs of an architect to design that semi, the costs of obtaining planning permission, the infrastructure around that semi (roads, footpaths, street-lighting, landscaping), the certification that the building complies with regulations, the various levies and taxes on development etc. etc. etc.

It's bar stool bull-**** of the highest order.

Villa05

Sleepy wrote:

It's bar stool bull-**** of the highest order.

Tom parlon or David Mcwilliams: who would you believe?

Sleepy

Neither. The truth is likely somewhere in the middle.

I've liked much of McWilliams commentary over the years but that article is using worse than "back of an envelope". Had he even included a margin over his mates figures to allow for design/planning it might have had a point but as it stands, it's extrapolating the national output of bananas from the cost price of a single orange.

seamus

Villa05 wrote: »

Tom parlon or David Mcwilliams: who would you believe?

That's a bit like asking who you think was more honest: Bertie Ahern or Charlie Haughey?

The correct answer is probably somewhere in the middle of the figures given by both, neither can be trusted to give a calculation that hasn't been heavily manipulated to say what they want it to say.

Rew

Great to hear this from the CB:

http://www.irishtimes.com/business/economy/central-bank-defends-home-loan-cap-1.2583355

Central Bank wrote:

“One thing is clear – allowing lending and prices to spiral off again is not a solution, and would be a betrayal to the next generation of Irish home buyers,” he said. “Higher deposit requirements slow individual households’ entry into the property market, but. . . they prevent us from overbidding each other with ever-increasing amounts of borrowed money.”

handlemaster

Rew wrote: »

Great to hear this from the CB:

http://www.irishtimes.com/business/economy/central-bank-defends-home-loan-cap-1.2583355

at last someone with some common sence...

Bob24

Rew wrote: »

Great to hear this from the CB:

http://www.irishtimes.com/business/economy/central-bank-defends-home-loan-cap-1.2583355

The level of hypocrisy is quite impressive around this topic: the CBI has done more to keep prices "reasonable" and protect prospective buyers from unsustainable debt than any government or other interest group has, yet the very people who triggered the previous bubble and burst are blaming the CBI because "those in their 20s and 30s living in urban areas are the ones being most adversely impacted by these over zealous rules".

Thanks for you advice Rachel Doyle, but as a 30something living in urban area and looking at buying a property, I can tell you I am not interested in your way of doing things :mad:

Michael D Not Higgins

Bob24 wrote: »

Thanks for you advice Rachel Doyle, but as a 30something living in urban area and looking at buying a property, I can tell you I am not interested in your way of doing things :mad:

Rachel "I'm very bad at haggling" Doyle

Cuddlesworth

Michael D Not Higgins wrote: »

Rachel "I'm very bad at haggling" Doyle

Your plucking at straws there. We don't operate in a society where haggling skills are needed or valued.

gaius c

Bob24 wrote: »

The level of hypocrisy is quite impressive around this topic: the CBI has done more to keep prices "reasonable" and protect prospective buyers from unsustainable debt than any government or other interest group has, yet the very people who triggered the previous bubble and burst are blaming the CBI because "those in their 20s and 30s living in urban areas are the ones being most adversely impacted by these over zealous rules".

Thanks for you advice Rachel Doyle, but as a 30something living in urban area and looking at buying a property, I can tell you I am not interested in your way of doing things :mad:

The only way to help first time buyers is lower prices. Everything else is a way to help people other than first time buyers.

OfflerCrocGod

Buy to let are starting to lever back up again http://www.rte.ie/news/business/2016/0324/777067-buy-to-let-investors/

Michael D Not Higgins

Cuddlesworth wrote: »

Your plucking at straws there. We don't operate in a society where haggling skills are needed or valued.

I was being flippant, but honestly I'd have thought a base level of business skills from someone who's COO of PIBA would translate into being able to haggle at the low end too.

It's along the lines of if I can't trust her to haggle, how can I trust her judgments on macroeconomic policy? I know they're not directly relatable, but her vested interest is not in the spirit of helping the Irish consumer.

The_Conductor

OfflerCrocGod wrote: »

Buy to let are starting to lever back up again http://www.rte.ie/news/business/2016/0324/777067-buy-to-let-investors/

Within the new limits- and its more the case that where up to 18 months ago BTL landlords could not access finance- and were purchasing solely with cash- now its a more standard mixture of 60% debt, 40% cash.

Government policy is to get landlords to maximise their debts- sure there is a perverse incentive to- when you're punished for repaying your debts.

From lenders perspective- when the landlord has 40% equity in a property- its a sufficient insurance policy for a prospective lender against any possible negative equity- should the borrower default on the loan (and the borrower is less likely to default on the loan- when they have personal equity tied up in it).