State competing against First Time Buyers

Pkiernan

Turns out the State is the real Cuckoo here, buying 18% of all new builds.

The horrible thing is that tax payers are being priced out of the market by the State as it buys homes using those same tax payers funds, to give free or heavily subsidised homes to non tax payers.

My heart really goes out to FTBs.

https://m.independent.ie/opinion/comment/lorcan-sirr-watch-out-for-the-magpie-as-it-swoops-on-new-estates-to-lock-out-our-firsttime-buyers-38082144.html

Dolbhad

Wow that is very surprising. I don’t understand why the government won’t built. They have the land and surely, as the article points out, they are market value for houses they could build cheaply. I grow up in a council house and they knew how to build them in the 80’s!

Really shows they don’t care about those getting up to work and pay taxes.

Dav010

I think the new maternity hospital shows what happens when the state tries to build.

The Sparrow

Dav010 wrote: »

I think the new maternity hospital shows what happens when the state tries to build.

Or at least when the State outsources the build completely. I actually don't know the answer to this but I suspect that we used to build our own houses in the 50s/60s or at least have more control over it. Now everything has to be a public/ private partnership.

Which seems to be code for the public getting ripped off.

Roisin76

If the State started hiring construction workers directly you'd be complaining that the State is sucking up the workforce out of the private sector.

Plus, as noticed above. Public investments are NEVER as efficient as private investments.

Give it two, maybe three more years and people will be moaning about oversupply and flooding the market with ghost estates. The irony of the cyclical Green Island.

Wanderer78

Roisin76 wrote:

Plus, as noticed above. Public investments are NEVER as efficient as private investments.

Is there really truth to this, or have we been bamboozled by all this 'market efficiency' stuff?

Roisin76

Wanderer78 wrote: »

Is there really truth to this, or have we been bamboozled by all this 'market efficiency' stuff?

Figure why publicly traded companies with majority state stakes trade at quite significant discounts? There's a good reason for that.

Wanderer78

Roisin76 wrote:

Figure why publicly traded companies with majority state stakes trade at quite significant discounts? There's a good reason for that.

Sorry, I'm not sure exactly what you mean?

lawred2

Dolbhad wrote: »

Wow that is very surprising. I don’t understand why the government won’t built. They have the land and surely, as the article points out, they are market value for houses they could build cheaply. I grow up in a council house and they knew how to build them in the 80’s!

Really shows they don’t care about those getting up to work and pay taxes.

They are looking after their pals in the CIF

lawred2

What would be better is the state using land it owns and contracting credible builders/developers to build on it. Hand 20% or so over to the foreva home pay for nothing lot and sell the rest as affordable homes.

Elessar

Can you paste the full article here?

It's not surprising. I've read reports that local councils are doing deals with REITs for guaranteed rent income if they get exclusive access to the new apartments they are buying. Now REITs are buying up houses and apartments en-mass and doing deals with developers to buy up entire complexes before they are even built. Then hand them over to the council for a guaranteed 25 year return.

Developers are starting to see the €€€ and are swapping plans for houses (even where they have planning permission) to high density apartments. Already happening in Donabate.

Roisin76

Wanderer78 wrote: »

Sorry, I'm not sure exactly what you mean?

Stakeholders see states' involvement as a risk. Where states own controlling stakes in companies, shares usually/always trade at a lower price then they would otherwise. This is the way it is.
If you have politicians controlling the money then all sort of bad things can happen and you may get a 'change of direction' every 4/5 years (election).

Cuddlesworth

Dolbhad wrote: »

Wow that is very surprising. I don’t understand why the government won’t built. They have the land and surely, as the article points out, they are market value for houses they could build cheaply. I grow up in a council house and they knew how to build them in the 80’s!

Really shows they don’t care about those getting up to work and pay taxes.

The main reason is they don't want council estates. Large groups of poor people reliant on social welfare leads to higher crime rates and significantly higher chances of their offspring being social welfare dependant.

The issue here isn't that the council are purchasing homes for social welfare purposes. The issue is that the pricing in our citys has gotten so high again, that these buys are competing in price ranges that the majority of working couples can't afford. Which again, places a emphasis on lower paid workers that their efforts to improve their circumstances are wasted.

Wanderer78

Roisin76 wrote:

Stakeholders see states' involvement as a risk. Where states own controlling stakes in companies, shares usually/always trade at a lower price then they would otherwise. This is the way it is. If you have politicians controlling the money then all sort of bad things can happen and you may get a 'change of direction' every 4/5 years (election).

Its important to realise, stock markets poorly represent the economy of the majority, but represent the economy of the minority very well, as the majority of shares traded, are owned by the minorities, particularly the wealthy. Its also important to realise that the majority of money created in our modern monetary system, is actually created by banks in the form of loans, of which our political systems have little control over.

There's no question there's inefficiencies in the public sector, but is the private sector all knowing and truly more efficient?

Sleeper12

The state isn't really competing with first time buyers.

It's worth remembering that if the council decides to build an estate they have to contract in a building company. If a building company spends the next two years building a council estate then this takes the company & skilled tradesmen off a possible private estate. While there is a shortage of skilled tradesmen in Ireland tying them up for two years on a council estate will actually give us a net increase of council homes but also a net loss of private homes.

Vulture funds are a much more worrying thing buying entire apartment blocks. By doing that they are putting the entire block as rentals with not a single unit being bought privately. This is keeping young people renting for longer.

enricoh

At least when the celtic tiger calved we had got a great road network out of it.
When the next recession hits we will have spent all the dough on housing the cant work wont work brigade.

Roisin76

Wanderer78 wrote: »

Its important to realise, stock markets poorly represent the economy of the majority, but represent the economy of the minority very well, as the majority of shares traded, are owned by the minorities, particularly the wealthy. Its also important to realise that the majority of money created in our modern monetary system, is actually created by banks in the form of loans, of which our political systems have little control over.

There's no question there's inefficiencies in the public sector, but is the private sector all knowing and truly more efficient?

Not touching the 'who creates money' subject as this is also a known misconception that 'banks create money by giving out loans'.

Private sector is not all knowing, but in general more efficient. This is rather widely accepted belief in the financial/economy world. States may mess up even the best running businesses.

One example would be Irish banks and State's limits on management pay. Populist and anti-market measures. Then you have political appointments (boards controlled by politicians) and decision making with no real stake in the game. It all adds up.

Now, imagine a company which has a defined strategy and let's say runs smoothly. The election shifts political forces, board members are being swapped, management replaced, goals scrapped, the strategy shift. Efficient companies can't be run like that.

Roisin76

Sleeper12 wrote: »

The state isn't really competing with first time buyers.

It's worth remembering that if the council decides to build an estate they have to contract in a building company. If a building company spends the next two years building a council estate then this takes the company & skilled tradesmen off a possible private estate. While there is a shortage of skilled tradesmen in Ireland tying them up for two years on a council estate will actually give us a net increase of council homes but also a net loss of private homes.

Vulture funds are a much more worrying thing buying entire apartment blocks. By doing that they are putting the entire block as rentals with not a single unit being bought privately. This is keeping young people renting for longer.

Fully agree with the first part.
Don't agree with the second.

Nothing wrong with young people renting. I'd argue young people should be renting until a point when they settle down / have family, stable job location.
No point buying if you move from place to place, change jobs or live an active city life.

The problem is not that young people can't buy houses. The issue is with rental availability and costs. If rents were cheap nobody would be pressured to buy as soon as possible.

Wheeliebin30

The Sparrow wrote: »

Or at least when the State outsources the build completely. I actually don't know the answer to this but I suspect that we used to build our own houses in the 50s/60s or at least have more control over it. Now everything has to be a public/ private partnership.

Which seems to be code for the public getting ripped off.

Everything was cheaper back then.

Building regs nowadays are much stricter.

The only way to stop this nonsense is to stop handing houses to people who declare themselves homeless.

I guarantee within a year you will have no homeless people and houses will go to people who deserve them.

Sleeper12

Roisin76 wrote:

Nothing wrong with young people renting. I'd argue young people should be renting until a point when they settle down / have family, stable job location. No point buying if you move from place to place, change jobs or live an active city life.

I don't have a problem with anyone renting. I rented an apartment myself nearly 30 years ago.

What I was trying to explain was a very worrying trend. When a development is planned it is assumed that a certain percentage will be buy to let & some owner occupier. I'd be lying if I said that I knew the percentage but I'd hazard a guess that planners would expect a minimum of 20 percent to be owner occupied. Vulture funds are buying the entire development off the plans. This is taking homes city planners had expected to be owner occupied & making them rentals. It's a very new problem but its forcing young couples who want to buy an apartment to rent for longer. It's artificially altering the balance of rental and private ownership.

is_that_so

Sleeper12 wrote: »

The state isn't really competing with first time buyers.

It's worth remembering that if the council decides to build an estate they have to contract in a building company. If a building company spends the next two years building a council estate then this takes the company & skilled tradesmen off a possible private estate. While there is a shortage of skilled tradesmen in Ireland tying them up for two years on a council estate will actually give us a net increase of council homes but also a net loss of private homes.

Vulture funds are a much more worrying thing buying entire apartment blocks. By doing that they are putting the entire block as rentals with not a single unit being bought privately. This is keeping young people renting for longer.

No, the approach allows councils a way out of their own poor performance on social housing. Far more hay to be made about homelessness and the government being complicit in a GE. This will help. The rental market is also facing a massive shortage, especially in Dublin. Single landlord strategies through REITs are part of that solution. At present though it seems to be the only one.

Sleeper12

is_that_so wrote:

No, the approach allows councils a way out of their own poor performance on social housing. Far more hay to be made about homelessness and the government being complicit in a GE. This will help. The rental market is also facing a massive shortage, especially in Dublin. Single landlord strategies through REITs are part of that solution. At present though it seems to be the only one.

I'm at a loss as to why you quoted me as your reply does not relate to my original comments.

I will point out that I don't believe that any council ever employed full time builders to build homes. Even going back as far as the 1950s it was private building companies that built council estates.

Roisin76

Sleeper12 wrote: »

I don't have a problem with anyone renting. I rented an apartment myself nearly 30 years ago.

What I was trying to explain was a very worrying trend. When a development is planned it is assumed that a certain percentage will be buy to let & some owner occupier. I'd be lying if I said that I knew the percentage but I'd hazard a guess that planners would expect a minimum of 20 percent to be owner occupied. Vulture funds are buying the entire development off the plans. This is taking homes city planners had expected to be owner occupied & making them rentals. It's a very new problem but its forcing young couples who want to buy an apartment to rent for longer. It's artificially altering the balance of rental and private ownership.

I think the important here is that homes are being built. Planned to be sold or rented is less relevant. Every single home built takes the pressure off the system.

hmmm

Sleeper12 wrote: »

Vulture funds are buying the entire development off the plans. This is taking homes city planners had expected to be owner occupied & making them rentals. It's a very new problem but its forcing young couples who want to buy an apartment to rent for longer. It's artificially altering the balance of rental and private ownership.

In most cases the developer would never have built in the first place without having the units pre-purchased. They're not "vulture" funds, they are funds offering money to builders to build on the land they have.

If we want to hand out large loans to builders for speculative building and then try and sell them into the market, we'd have people moaning about this too.

You have to wonder where supply is supposed to come from. The government is driving private landlords out of the market, we can't repossess property from people who won't pay so banks don't want to lend, we don't want build-to-rent, we don't want loans being given to developers, and councils aren't allowed to build social housing estates any more.

Pkiernan

Elessar wrote: »

Can you paste the full article here?

It's not surprising. I've read reports that local councils are doing deals with REITs for guaranteed rent income if they get exclusive access to the new apartments they are buying. Now REITs are buying up houses and apartments en-mass and doing deals with developers to buy up entire complexes before they are even built. Then hand them over to the council for a guaranteed 25 year return.

Developers are starting to see the €€€ and are swapping plans for houses (even where they have planning permission) to high density apartments. Already happening in Donabate.

Article here. This is a true banana republic that punishes work and rewards idleness.

https://m.independent.ie/business/personal-finance/property-mortgages/revealed-one-in-five-newbuild-homes-is-now-being-snapped-up-by-state-38082140.html

skippy123!

The whole thing on building even more social houses is completely ridiculous and unnecessary... Housing crises is not because houses are not available. It is because it is too expensive for many due to banking rules (which are placed with a reason). I am truly shocked that just because someone calls itself "homeless" is entitled to get a "free" house. And people who are killing themselves of work - need to pay of 30 years of mortgage is beyond my understanding. Definition of homeless needs to be re-evaluated and state needs to make sure that social houses are going to those that REALLY need it. If other country's have policy's that work great regarding that issue - why not just copy that from any of those country's?

MayoSalmon

Wanderer78 wrote:

There's no question there's inefficiencies in the public sector, but is the private sector all knowing and truly more efficient?

Yes..and it's not even worth the debate. Economics 101 stuff

Guy:Incognito

lawred2 wrote: »

What would be better is the state using land it owns and contracting credible builders/developers to build on it. Hand 20% or so over to the foreva home pay for nothing lot and sell the rest as affordable homes.

If theyre only buying 18% of them now that means theyd be taking more house out of the private sector with your idea.

lawred2

Guy:Incognito wrote: »

If theyre only buying 18% of them now that means theyd be taking more house out of the private sector with your idea.

Not when the state is using its own land

Wexforllion

I know someone who spent 370k on a house.
They are slaving every day with no spare cash only to to find their neighbors were gifted a council house. To make it worse the neighbors are loud, inconsiderate and just seem to hang around all day making a nuisance of themselves. Demoralizing.

The truth is this Country is perfect for the rich and poor. The normal people keep the rich getting richer and keep the poor(or sometimes lazy) housed.

rosmoke

Ha, listen to this.

Neighbours from my left paid 315k 13 years ago, in 2014 it was 70k (thank you Dublin City Council for turning it into a social housing estate), house is now worth 180k and still in negative equity. (terraced)
Neighbour from my right got it from Council, paid 50k for it, has a brand new car and probably mortgage paid already. (semi-d)

My neighbours don't even allow their kids to play outside, they need to take them somewhere else, if you wanna have an idea of the estate.

And in the same time, I see people from same estate complaining on news sites about the quality of houses they stay in for free, while I pay 1800 for the same house.


I will be looking at buying a property soon, but what guarantees me the state would not cross me over like it has happened with so many others?