Irish Property Market 2020 Part 2

Welcome back Fianna Fail.. FFS.

Why are the first time buyers so precious anyway. What about someone who sold their house and needs to buy another one in a different location. How will they compete with an 85k headstart.

Leave the market alone. But if they are going to interfere anywhere make it be compulsory purchase orders for development land. Thats where the real problem is.

beauf

neutral guy wrote: »

This movements shows that builders lobby try put pressure on government
Government agree to accept that preassure because building industry and Property market is nearly dead.
Anyway if this goes forward then it show that property are overpriced/market stall and there is no buyers.
Ok,somebody will get 85K what is next ?
Give 150K who will continue not afford buy house even getting 85K ?
Why not to tell builders it is your problems with prices because you paid for sites too much ? Put prices down !
Why continue support market making prices less affordable for buyers ?
Why not crash the prices making more people with small incomes pay less for houses ?
All this shows there is less and less money in buyers pockets and it is no way property prices will rising in this situation.
Also who will pay again ? Tax payers ? To support builders profits ? Tax payers who will have pay bigger prices for houses ?

The problem is supply. Crashing the market obliterates supply. Especially at the lower end with less margin.

But saying it won't work in the long term. But it will make everything worse in the short term term. The next 3-5 yrs.

But this plan from developers I can't see making any sense here in it's current form. If a scheme exists in the UK I assume it's more a shared ownership model?

awec

beauf wrote: »

The problem is supply. Crashing the market obliterates supply. Especially at the lower end with less margin.

But saying it won't work in the long term. But it will make everything worse in the short term term. The next 3-5 yrs.

But this plan from developers I can't see making any sense here in it's current form. If a scheme exists in the UK I assume it's more a shared ownership model?

I think the government in the UK will lend you up to 20% of the price of a property, but it means they own 20% of it and you have to buy them out, which means if it increases in value so does the amount you owe.

But it's way more complicated than that, I don't really understand it all.

doc22

Deleted User wrote: »

Welcome back Fianna Fail.. FFS.

Why are the first time buyers so precious anyway. What about someone who sold their house and needs to buy another one in a different location. How will they compete with an 85k headstart.

Leave the market alone. But if they are going to interfere anywhere make it be compulsory purchase orders for development land. Thats where the real problem is.

What about the money they get from the equity in the house

How is this going to work for first time buyers. So they will borrow from the bank and then owe the 85K loan to the government aswell. Presumably this will lead to an increase in house prices. So the buyer ends up owing more.

That doesn't seem like a good solution.

fliball123

Deleted User wrote: »

How is this going to work for first time buyers. So they will borrow from the bank and then owe the 85K loan to the government aswell. Presumably this will lead to an increase in house prices. So the buyer ends up owing more.

That doesn't seem like a good solution.

Well if its no interest loan

PropQueries

combat14 wrote: »

Sounds like PCP for builders provided by the government aka tax payers to keep over priced houses on the go .. really does sound like writing is on the wall for the property market if this is what building industry are requesting at the moment ..


Builders propose €85k loan boost for first-time buyers

https://amp.independent.ie/business/personal-finance/property-mortgages/builders-propose-85k-loan-boost-for-first-time-buyers-39506685.html

So the developers want the government to give €85,000 to homebuyers to help buy a new build house that costs less than €180,000 to build. Will this be on the top of the HTB scheme I wonder?

The SCSI earlier this month published a report stating that the average cost of building a 114 sq.m. new house including all siteworks and site development costs is c. €179,000.

The SCSI report is here: https://www.scsi.ie/documents/get_lob?id=1551&field=file

awec

PropQueries wrote: »

So the developers want the government to give €85,000 to homebuyers to help buy a new build house that costs less than €180,000 to build. Will this be on the top of the HTB scheme I wonder?

The SCSI earlier this month published a report stating that the average cost of building a 114 sq.m. new house including all siteworks and site development costs is c. €179,000.

The SCSI report is here: https://www.scsi.ie/documents/get_lob?id=1551&field=file

You are being misleading now, implying that 179k is the total cost to build.

As the document calls out quite clearly, on the very page you are selectively quoting from, the total cost to build is 371k, of which 179k is the cost of constructing the actual house, with the rest of the cost made up of land, legal, finance, VAT etc.

Those other costs are just as relevant. Land is the largest "soft cost", but still represents only 16% of the total cost.

Even if you take out the margin (which again is clearly called out on that page that you are quoting from) and imagined that developers were able to build houses for zero profit, the total cost to build is ~330k.

cameramonkey

Mic 1972 wrote: »

No ones has a clue

This is close to the truth.

hometruths

beauf wrote: »

The problem is supply. Crashing the market obliterates supply. Especially at the lower end with less margin.

But saying it won't work in the long term. But it will make everything worse in the short term term. The next 3-5 yrs.

But this plan from developers I can't see making any sense here in it's current form. If a scheme exists in the UK I assume it's more a shared ownership model?

Is the problem really supply? Sounds like the construction industry currently has a demand problem, and is asking the government to help solve it.

TheSheriff

schmittel wrote: »

Is the problem really supply? Sounds like the construction industry currently has a demand problem, and is asking the government to help solve it.

The problem is most definitely supply in areas people want to live.

hometruths

TheSheriff wrote: »

The problem is most definitely supply in areas people want to live.

If that's the problem the government should politely reply "Thanks, but no thanks to the €85k bung idea. Just start building houses in areas in people want to live and you'll have no worries about demand."

Pelezico

schmittel wrote: »

If that's the problem the government should politely reply "Thanks, but no thanks to the €85k bung idea. Just start building houses in areas in people want to live and you'll have no worries about demand."

The bung will increase the price of new homes and be of little benefit to buyers.

When the time comes to sell, owners will find themselves in negative equity as potential buyers will not have the benefit of the 85k.

beauf

schmittel wrote: »

Is the problem really supply? Sounds like the construction industry currently has a demand problem, and is asking the government to help solve it.

It's affordability not demand.
That's why it's pitched at first time buyers.
If there was no demand there would be no one to sell to either way. This thread wouldn't exist either. No one would be interested.

Even you suggest a cheaper house people won't accept a lower standard. If you suggest they buy in a cheaper location, people won't accept that either. The builders and developers won't build if there not enough profit in it. So it's a catch 22.

If the govt built housing itself it could control the costs.

beauf

Pelezico wrote: »

The bung will increase the price of new homes and be of little benefit to buyers.

When the time comes to sell, owners will find themselves in negative equity as potential buyers will not have the benefit of the 85k.

Unless the property has appreciated by that much when you come to sell. Which is unlikely in this case. But has happened in the past.

Mic 1972

with no plans for new buildings next year most workers will go back to their own countries. Demand for both buy or rent will slow down as a result

OwlsZat

awec wrote: »

You are being misleading now, implying that 179k is the total cost to build.

As the document calls out quite clearly, on the very page you are selectively quoting from, the total cost to build is 371k, of which 179k is the cost of constructing the actual house, with the rest of the cost made up of land, legal, finance, VAT etc.

Those other costs are just as relevant. Land is the largest "soft cost", but still represents only 16% of the total cost.

Even if you take out the margin (which again is clearly called out on that page that you are quoting from) and imagined that developers were able to build houses for zero profit, the total cost to build is ~330k.

He said it was the cost of the build. Which it is. The other costs can be reduced can be reduced easily if the Government actually wanted to.

beauf

Mic 1972 wrote: »

with no plans for new buildings next year most workers will go back to their own countries. Demand for both buy or rent will slow down as a result

Most workers. So if you moved here 10 years ago have kids in school, friends and family in your area he here. You suddenly decide to pack it all in and go home. Did the reason for leaving home in the first place disappear?

"Most" workers what percentage is that? 60-90%

hometruths

beauf wrote: »

It's affordability not demand.
That's why it's pitched at first time buyers.
If there was no demand there would be no one to sell to either way. This thread wouldn't exist either. No one would be interested.

Even you suggest a cheaper house people won't accept a lower standard. If you suggest they buy in a cheaper location, people won't accept that either. The builders and developers won't build if there not enough profit in it. So it's a catch 22.

If the govt built housing itself it could control the costs.

This sounds like nonsense. Are we back to the old "I'd like to buy but I cannot afford it" sort of demand?

In functioning markets the cure for high prices, is high prices. Not bungs to the producers in the form of risky loans to buyers.

It is a crazy scheme. If there is genuinely a chronic shortage of housing in given areas the government would be far better off giving 85k tax credits to sellers than this madness.

Hubertj

Is the scheme proposed used in other countries or did they pull it out of their asses?

hometruths

Hubertj wrote: »

Is the scheme proposed used in other countries or did they pull it out of their asses?

A similiar scheme operated in the UK with the predictable results of putting a rocket under house prices and homebuilders share prices.

Another key difference in the UK was that people actually pay off the loans, because the government actually enforce the security if there is a default.

What would happen here is people will get into difficulties, not repay the government loan, and then there will be a lot of wailing about not my fault, sure isn't it the governments fault, too much borrowings, they pushed me into it, no you cannot take my home, where's my NAMA etc etc.

And the government will say right so, we'll put up taxes again so everyone can share the cost.

beauf

schmittel wrote: »

This sounds like nonsense. Are we back to the old "I'd like to buy but I cannot afford it" sort of demand? ...

That seems to be what 90% of this thread is about.

People want the market to crash so they can buy cheap claiming there is no demand.

neutral guy

I think government had to send to builders clear message
We will support first time buyer giving them 85K but only for property up to 270K.
This could bring many positive changes on market.

OwlsZat

beauf wrote: »

That seems to be what 90% of this thread is about.

People want the market to crash so they can buy cheap claiming there is no demand.

Naa it's only 50%.

The other 50% want to pull up the ladder. They don't care that housing market is broken, the notional idea of their paper wealth keeps them very content indeed.

neutral guy

beauf wrote: »

That seems to be what 90% of this thread is about.

People want the market to crash so they can buy cheap claiming there is no demand.

I dont want market crash because I will lose incomes.I want support from government to those who can pay ! What the point spend money for rent if I can pay those money as mortgage !? Bring proper and clear law that If you not pay your mortgage you have leave your house ! Thats it ,all problems solved ! Banks will start give money,there will be plenty houses for sale which people will lose because they late pay mortgage 1 month ! Simple !

Melanchthon

neutral guy wrote: »

I think government had to send to builders clear message
We will support first time buyer giving them 85K but only for property up to 270K.
This could bring many positive changes on market.

Yeah, I wouldn't trust what the developers say about the land costs either as there is funny goings on in relation to the way development land is sometimes bought and sold multiple times by linked companies

hometruths

beauf wrote: »

That seems to be what 90% of this thread is about.

People want the market to crash so they can buy cheap claiming there is no demand.

Sure a lot of this thread is about supply and demand.

And if the amount of people who want the market to fall because they do not wish/are not able to buy at current prices, is as high as you suggest then the current levels of demand are lower than even I thought.

hometruths

neutral guy wrote: »

I think government had to send to builders clear message
We will support first time buyer giving them 85K but only for property up to 270K.
This could bring many positive changes on market.

Give it to them or lend it to them?

ebayissues

Is this scheme only for new builds? When will it go live?

hometruths

ebayissues wrote: »

Is this scheme only for new builds? When will it go live?

At this stage it is just builders lobby flying kites. Hopefully they'll be told where to stick it.