Irish Property Market 2020 Part 2

Cyrus

brisan wrote: »

If a developer is building houses for the state on state owned land who do you think is going to provide the financing
The developer at 4% or the state at 0%
of course the state will provide the finance

id agree that would be sensible, but the state never ceases to amaze.

Bass Reeves

brisan wrote: »

But the builder in Waterford would have all these costs as well
If the state was financing it the Builder would have no financing costs and no EA costs either

Costs would be totally different. First builder may be able to employ and manage labour directly and easier on Waterford. What I mean by this is Cairns may be actually managing the site themselves with no or minimum use of subbies. Subbies will need a 20%margin to operate. Labour costs will be at least another 20430% cheaper than Dublin on Waterford.

Materials will be cheaper due to less demand and less time involved in delivering to site. I be surprised if block and ready mixed concrete are not at least 10% and maybe 20% or more expensive in Dublin compare to Waterford. It would also be faster time wise to get a site from purchase to completion in Waterford maybe a 50% difference in timeframe.

All this has to be reflected in the cost.

Bass Reeves

brisan wrote: »

If a developer is building houses for the state on state owned land who do you think is going to provide the financing
The developer at 4% or the state at 0%
of course the state will provide the finance

The state dose not provide finance to any other sector that provides services into it. Neither will it do for building. The risk would be inordinate. It would require the state to make sure all builders that were selected for projects were financially stable. This would require decision to be made regarding contracts outside the tendering process.
While the state might stage pay for work and provide sites it would not or should not pay for day to day work. This is the same as time and materials costings and could drive building costs to the state completely out of control.

If it opted for stage payments it could only really pay at complete sitework development and at site completion. There is no way the state could or should pay on a interstage basis as it is too hard to designate payment stages

brisan

Bass Reeves wrote: »

The state dose not provide finance to any other sector that provides services into it. Neither will it do for building. The risk would be inordinate. It would require the state to make sure all builders that were selected for projects were financially stable. This would require decision to be made regarding contracts outside the tendering process.
While the state might stage pay for work and provide sites it would not or should not pay for day to day work. This is the same as time and materials costings and could drive building costs to the state completely out of control.

If it opted for stage payments it could only really pay at complete sitework development and at site completion. There is no way the state could or should pay on a interstage basis as it is too hard to designate payment stages

So the developer building the New Childrens hospital has access to well over a billion euro
Of course the state could agree a price with no over runs allowed and pay in stages

PropQueries

Bass Reeves wrote: »

Costs would be totally different. First builder may be able to employ and manage labour directly and easier on Waterford. What I mean by this is Cairns may be actually managing the site themselves with no or minimum use of subbies. Subbies will need a 20%margin to operate. Labour costs will be at least another 20430% cheaper than Dublin on Waterford.

Materials will be cheaper due to less demand and less time involved in delivering to site. I be surprised if block and ready mixed concrete are not at least 10% and maybe 20% or more expensive in Dublin compare to Waterford. It would also be faster time wise to get a site from purchase to completion in Waterford maybe a 50% difference in timeframe.

All this has to be reflected in the cost.

Cairn Homes makes extensive use of sub-contractors. Here's an advert for a Site Engineer on their website. Some of the duties include:

1. Monitor and evaluate quality control for sub-contractor‘s work.

2. Setting out for Subcontractors:

- This role will involve working directly with the site team and subcontractors to ensure that the development is built as agreed.

- giving the gridlines / levels to groundwork or RC frame

- Foundations, Floor slabs, Blocklaying, Services and Civil Works

- House Plots on housing projects and issuing the surveys to solicitors

- Supervision and monitoring of ground works and civil engineering contractors

- Supervision and monitoring of concrete frame contractors

- RC frame experience desirable with residential and/or contracting background

- Develop strong relationships with sub-contractors to deliver the desired outputs—on time and on budget, with high attention to quality and detail


Link to Cairn Homes job advert here: https://www.cairnhomes.com/about-us/careers/site-engineer/

And last April: "Cairn to pay €5m in income supports to subcontractors". Link here: https://www.rte.ie/news/business/2020/0410/1129811-cairn-to-give-5m-in-income-supports-to-subcontractors/

Bass Reeves

brisan wrote: »

So the developer building the New Childrens hospital has access to well over a billion euro
Of course the state could agree a price with no over runs allowed and pay in stages

It actually a very clear reason why the state should not give open ended commitment at tendering. It was a brown field site. And prices are virtually on time and materials. It was a design contract. The companies building it will complete millions of euro's of work before they receive payment. It has defined stages that payments are made at same as road building.

If a similar process is put in place for house building as the NCH expect hen houses to cost half a million

Bass Reeves

PropQueries wrote: »

Cairn Homes makes extensive use of sub-contractors. Here's an advert for a Site Engineer on their website. Some of the duties include:

1. Monitor and evaluate quality control for sub-contractor‘s work.

2. Setting out for Subcontractors:

- This role will involve working directly with the site team and subcontractors to ensure that the development is built as agreed.

- giving the gridlines / levels to groundwork or RC frame

- Foundations, Floor slabs, Blocklaying, Services and Civil Works

- House Plots on housing projects and issuing the surveys to solicitors

- Supervision and monitoring of ground works and civil engineering contractors

- Supervision and monitoring of concrete frame contractors

- RC frame experience desirable with residential and/or contracting background

- Develop strong relationships with sub-contractors to deliver the desired outputs—on time and on budget, with high attention to quality and detail


Link to Cairn Homes job advert here: https://www.cairnhomes.com/about-us/careers/site-engineer/

And last April: "Cairn to pay €5m in income supports to subcontractors". Link here: https://www.rte.ie/news/business/2020/0410/1129811-cairn-to-give-5m-in-income-supports-to-subcontractors/

I think you did not read my post. Read it again and again after than and then think before replying

PropQueries

Bass Reeves wrote: »

I think you did not read my post. Read it again and again after than and then think before replying

I think I did. You implied that the cost of building houses that Cairn Homes presented to their investors may be due to them hiring directly.

You stated "Cairns may be actually managing the site themselves with no or minimum use of subbies. Subbies will need a 20% margin to operate."

So, the reason for Cairn Homes being able to build their 1000 sq.ft. A-Rated semi-detached houses for an average of c. €100k is not down to cost savings made by hiring labour directly as they make extensive use of sub-contractors.

brisan

Bass Reeves wrote: »

It actually a very clear reason why the state should not give open ended commitment at tendering. It was a brown field site. And prices are virtually on time and materials. It was a design contract. The companies building it will complete millions of euro's of work before they receive payment. It has defined stages that payments are made at same as road building.

If a similar process is put in place for house building as the NCH expect hen houses to cost half a million

As I said developers know what it costs to develop a site and build houses .
Cost plus margin and no over runs with stage payments
No financing costs ,no EA costs .guaranteed buyers ,no waiting around for the last few to sell and snag them
We seem to great at finding problems in this country ,not great at solutions
Only issue I can see is maybe developers want bigger margins than they say and maybe its not as expensive to build a house as they say

Bass Reeves

PropQueries wrote: »

I think I did. You implied that the cost of building houses that Cairn Homes presented to their investors may be due to them hiring directly.

You stated "Cairns may be actually managing the site themselves with no or minimum use of subbies. Subbies will need a 20% margin to operate."

So, the reason for Cairn Homes being able to build their 1000 sq.ft. A-Rated semi-detached houses for an average of c. €100k is not down to cost savings made by hiring labour directly as they make extensive use of sub-contractors.

I did no such thing read the post again

PropQueries

Ok, so we have Cairn Homes stating that the cost of building each of their 1000 sq.ft. A-Rated three bed semi-detached units is c. €100k.

We also have developers in Waterford selling A-Rated two bed terraced houses for €165k.

I think we can all agree that the cost of building a house in Dublin is not anywhere near the €400k figure the DCC’s head of housing recently stated on the Pat Kenny show?

Graham

PropQueries wrote: »

Ok, so we have Cairn Homes stating that the cost of building each of their 1000 sq.ft. A-Rated three bed semi-detached units is c. €100k.

No. We don't.

Cyrus

PropQueries wrote: »

Ok, so we have Cairn Homes stating that the cost of building each of their 1000 sq.ft. A-Rated three bed semi-detached units is c. €100k.

We also have developers in Waterford selling A-Rated two bed terraced houses for €165k.

I think we can all agree that the cost of building a house in Dublin is not anywhere near the €400k figure the DCC’s head of housing recently stated on the Pat Kenny show?

what was included in the 400k? because its not comparable to your 100k thats for sure.

what do you think a site costs for one of these houses? site costs?

PropQueries

Cyrus wrote: »

what was included in the 400k? because its not comparable to your 100k thats for sure.

what do you think a site costs for one of these houses? site costs?

We're debating on the actual cost to councils building directly on council owned land and if they built their units at a similar cost base to Cairn Homes.

The article on the €400k figure is here: https://www.independent.ie/life/home-garden/dublin-city-councils-wine-into-water-housing-policies-39767811.html

Browney7

Cyrus wrote: »

do the state provide funding for the projects? fair enough if so.

also we are comparing 70 sqm 2 beds in waterford to 90 sq/m in dublin, and costs are always going to be higher in the main cities than the regional ones.

They effectively are - Activate Capital is backed the ISIF who in turn lend to the developer who builds on the site and then enters into an enhanced lease agreement with the council at a chunky gross yield. The state gets an awful deal long run but gets to keep debt off the national debt and instead accrue a much larger ongoing liability as current expenditure via HAP. Its an awful waste of tax revenue considering the state can borrow for 20 years for near 0%

PropQueries

Browney7 wrote: »

They effectively are - Activate Capital is backed the ISIF who in turn lend to the developer who builds on the site and then enters into an enhanced lease agreement with the council at a chunky gross yield. The state gets an awful deal long run but gets to keep debt off the national debt and instead accrue a much larger ongoing liability as current expenditure via HAP. Its an awful waste of tax revenue considering the state can borrow for 20 years for near 0%

Well, Cairn Homes over the summer, lobbied the government "for funding for a new, long-term affordable rent initiative" proposal.

To me anyway, and people can up their own mind by reading the article below, I think this would show that the developers now believe there's much more profit to be made in renting to the state or renting to people with support from the state than renting or selling into the private market.

The link to the article in the Irish Examiner is here: https://www.irishexaminer.com/business/economy/arid-40139519.html

Villa05

Bass Reeves wrote:

Since 2015 material and labour costs have probably gone up 50%. It easy to pick a figure out of your ar5e and decide its gospel.

The irony

brisan

Villa05 wrote: »

The irony

Wages have not gone up by anything remotely nearing those figures
https://www.statista.com/statistics/416212/average-annual-wages-ireland-y-on-y-in-euros/
https://www.google.com/search?safe=active&rlz=1C1GCEB_enGB889GB889&ei=fUXKX8_qO6K3gwe8pYioCg&q=average+industrial+wage+ireland+2020&oq=aveerage+industrial+wage+ireland+2020&gs_lcp=CgZwc3ktYWIQARgAMgQIABATOggIABAWEB4QE1DlMVj0QGDbSWgBcAB4AIABxwKIAZMHkgEHMS4xLjAuMpgBAKABAaoBB2d3cy13aXrAAQE&sclient=psy-ab

5 TO 6 % at most

Hubertj

brisan wrote: »

Wages have not gone up by anything remotely nearing those figures
https://www.statista.com/statistics/416212/average-annual-wages-ireland-y-on-y-in-euros/
https://www.google.com/search?safe=active&rlz=1C1GCEB_enGB889GB889&ei=fUXKX8_qO6K3gwe8pYioCg&q=average+industrial+wage+ireland+2020&oq=aveerage+industrial+wage+ireland+2020&gs_lcp=CgZwc3ktYWIQARgAMgQIABATOggIABAWEB4QE1DlMVj0QGDbSWgBcAB4AIABxwKIAZMHkgEHMS4xLjAuMpgBAKABAaoBB2d3cy13aXrAAQE&sclient=psy-ab

5 TO 6 % at most

Is the CSO chart not showing an increase of about 15%ish since 2015?

JimmyVik

PropQueries wrote: »

Ok, so we have Cairn Homes stating that the cost of building each of their 1000 sq.ft. A-Rated three bed semi-detached units is c. €100k.

We also have developers in Waterford selling A-Rated two bed terraced houses for €165k.

I think we can all agree that the cost of building a house in Dublin is not anywhere near the €400k figure the DCC’s head of housing recently stated on the Pat Kenny show?

Must get those builders numbers

Do you know much would it cost you to get a 40 sqm extension build on to an existing house you already own.

brisan

Hubertj wrote: »

Is the CSO chart not showing an increase of about 15%ish since 2015?

Only checked the average industrial wage figures
Even at 15% it’s still a long way off 50%
Most of my mates are in construction and they have got nothing like a 50% rise
even the self employed ones

JimmyVik

brisan wrote: »

Only checked the average industrial wage figures
Even at 15% it’s still a long way off 50%
Most of my mates are in construction and they have got nothing like a 50% rise
even the self employed ones

Opposite experience here.
Most of my mates the same.
And they are minted now. Well they werent for a while with covid because they were out of work, but before it and even now they are easily doing 50% better than they were in 2015. At least any with skills better than labouring are.

brisan

JimmyVik wrote: »

Must get those builders numbers

Do you know much would it cost you to get a 40 sqm extension build on to an existing house you already own.

Do you know the profit a builder makes on an extension that size ?

Marius34

Everything has a value in open Market.
Government controlled land is not free, it has a Value.
I do understand the use of "free" land for social housing. I don't understand the use of "free" for affordable housing. If that's in Dublin county you probably handing out 100K Eur. worth of land to someone, while others a paying for it.

PropQueries

JimmyVik wrote: »

Must get those builders numbers

Do you know much would it cost you to get a 40 sqm extension build on to an existing house you already own.

Here you go. Get his contact details and see what price he will offer you.

Link here to a developer selling a-rated two bed terraced houses in Waterford for €165k: https://www.myhome.ie/residential/brochure/two-bed-terraced-radharc-na-siuire-knockboy-grantstown-waterford-city-waterford/4437860

JimmyVik

brisan wrote: »

Do you know the profit a builder makes on an extension that size ?

Do tell?

PropQueries

Marius34 wrote: »

Everything has a value in open Market.
Government controlled land is not free, it has a Value.
I do understand the use of "free" land for social housing. I don't understand the use of "free" for affordable housing. If that's in Dublin county you probably handing out 100K Eur. worth of land to someone, while others a paying for it.

Well then you should be concerned at RTE selling off a parcel of "their" land for c. €100 million in 2017. Wouldn't that land have been put to better use to house people on the waiting list? I don't think the current RTE staff got together and purchased it in the past 50 years. Why should they be the sole beneficiaries from the sale of state owned land?

brisan

JimmyVik wrote: »

Do tell?

At least 40% of the quoted price and the extras are the cream on top
Dermot Bannon has lads quoting 300k fir a refurb and an extension and there again you have builders buying the land and building a 3 bed A rated 100sq mt semi for a little over 200k
The only small builders are those under 5 ft 10 inches in height

Marius34

PropQueries wrote: »

Well then you should be concerned at RTE selling off a parcel of "their" land for c. €100 million in 2017. Wouldn't that land have been put to better use to house people on the waiting list? I don't think the current RTE staff got together and purchased it in the past 50 years. Why should they be the sole beneficiaries of state owned land?

I don't know anything about RTE staff, or what they got free. I don't see anything free here? Someone paid 100mil, doesn't look free from your comment.
And I'm not against using government land for social housing. I didn't say anything like that in my comment.

JimmyVik

brisan wrote: »

At least 40% of the quoted price and the extras are the cream on top
Dermot Bannon has lads quoting 300k fir a refurb and an extension and there again you have builders buying the land and building a 3 bed A rated 100sq mt semi for a little over 200k
The only small builders are those under 5 ft 10 inches in height

We did a 40sqm one 3 years ago between myself 2 brothers (Well one brother and my dad did most of the skilled work tbh) and my

Dad. We had to hire in some skills that we couldnt do.
Anyway total cost came to €44K and that was without anyone getting a profit from it as it was on a relatives house.

We've done some on flipped renopvations between us over the last 10 years. They are getting more expensive all the time.