Irish Property Market 2020 Part 2

brisan

JimmyVik wrote: »

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.

Labour is getting more expensive ( not by much ) most raw materials are either steady or barely increasing in price
We bought our final house last year
Builder had a price of 275 in for work
He had received a 20 k deposit so we had to get that much out of him
We did it ourselves bigger to a much higher standard with a lot of extras ( extra bathroom heat pump , underfloor heating etc ) for a lot less
Small builders make a big profit on extensions , don’t kid yourself on anything else
If a plumber quotes 4K to a builder for the job the builder will quote at least 6k to the client , it’s the way it always has been

Pixlated Potatoe

If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long
Houses are not overpriced

Hubertj

Is part of the conspiracy theory also that construction costs such as materials are being artificially inflated? Is it part of the master plan to enrich the elites and “landlord classes”?

Haven’t heard people pipe on about construction inflation but no doubt there are some plausible arguments that it is all a con job on the Irish people.

PropQueries

Pixlated Potatoe wrote: »

If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long
Houses are not overpriced

But how are developers in Waterford selling a-rated 2 bed terraced houses for €165k?

Villa05

Pixlated Potatoe wrote:

If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long Houses are not overpriced

Funny that so many houses sell for below that price.
Maybe we need to do a collection for all those losses

Stopitwillya

PropQueries wrote: »

But how are developers in Waterford selling a-rated 2 bed terraced houses for €165k?

That house is not far from where I live. A really nice part of Waterford City with 2 fine primary schools, a secondary school and ballygunner gaa club all within 200 metres of that house. Very good value. Prices in Waterford City are likely to rise over the next 10 years due to significant investment in the city over the next 4 years.

Who2

brisan wrote: »

Labour is getting more expensive ( not by much ) most raw materials are either steady or barely increasing in price
We bought our final house last year
Builder had a price of 275 in for work
He had received a 20 k deposit so we had to get that much out of him
We did it ourselves bigger to a much higher standard with a lot of extras ( extra bathroom heat pump , underfloor heating etc ) for a lot less
Small builders make a big profit on extensions , don’t kid yourself on anything else
If a plumber quotes 4K to a builder for the job the builder will quote at least 6k to the client , it’s the way it always has been

Glass has increased 10% in the last 2 months, timber is up 20% wavin the same as is plasterboard , if they are small increases then fair enough but in my mind I’d classifiy them fairly substantial . They are just some of the basics don’t start looking into the more complex parts of construction. There is still a huge backlog on imports. Builders margins usually run at 7-15% of trade prices so don’t kid yourself thinking they are cleaning up.

combat14

Pixlated Potatoe wrote: »

If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long
Houses are not overpriced

perhaps if the average single person or couple has a combined salary of €115,000

Smouse156

Pixlated Potatoe wrote: »

If it costs 300k to build a house plus land cost ,plus profit then these houses are worth 4-500k all day long
Houses are not overpriced

Houses are ridiculously overpriced! Way beyond average incomes. Land is the most overpriced of the lot. They are mainly over priced due to the Brickie paying too much for land and government taxes & levys

Pixlated Potatoe

The same principle applies to houses that cost €100k to build plus land profit ect... their worth 150-180k all day long

Idbatterim

What absolute comedy, a2 ber, a3 ber... but commute from 40k. out by car, instead of forty floors up and short walk or cycle to work!

Pixlated Potatoe

combat14 wrote: »

perhaps if the average single person or couple has a combined salary of €115,000

That’s irrelevant

If you were a builder and it costs you 300k to build the house and 50k for the land do you sell it for 400k or 300k

Pixlated Potatoe

Smouse156 wrote: »

Houses are ridiculously overpriced! Way beyond average incomes. Land is the most overpriced of the lot. They are mainly over priced due to the Brickie paying too much for land and government taxes & levys

I agree with some of that however
The average tradesman is being paid say €1000 per week
Let’s say there is 10 tradesmen on site for 12 weeks
There’s 120k
then material most likely another 120k then insurances, machinery, cost of land , profit ,selling fees ,engineers ,architects, quantity surveyors
People still live in 1996 in this country house price wise
Inflation happened since then ,builders don’t have huge margins and most of the costs come from materials and labour

Who2

The current building requirements have added a minimum of 30k to the average 3 bed from what it would cost to build 10 years ago. If there was as much money in it as everyone thinks then it would be like 2005 again and there would be houses thrown up everywhere.

Smouse156

Pixlated Potatoe wrote: »

I agree with some of that however
The average tradesman is being paid say €1000 per week
Let’s say there is 10 tradesmen on site for 12 weeks
There’s 120k
then material most likely another 120k then insurances, machinery, cost of land , profit ,selling fees ,engineers ,architects, quantity surveyors
People still live in 1996 in this country house price wise
Inflation happened since then ,builders don’t have huge margins and most of the costs come from materials and labour

It’s true that actual hard construction costs are high , however, it is the soft costs that could be addressed. Heavy taxation of development land and a reduction in government levys would lower construction costs about 20%.

There is no point in lowering levy’s unless land is taxed aggressively as the benefit of lower levy’s will only make land even more overpriced.

cnocbui

Pixlated Potatoe wrote: »

That’s irrelevant

If you were a builder and it costs you 300k to build the house and 50k for the land do you sell it for 400k or 300k

This is a thread where the majority think there is no intrinsic value to a house and only the market value that someone is prepared to pay matters.

The correct answer to your question is €250K Every third person on here is hoping to snag a crisis sale bargaing that's 40% less than it's intrinsic value.

Pixlated Potatoe

The construction costs make up most of the value ,levies taxes ect...that you suggest are not going to make Jane and joe on a combined salary of €60k per year able to afford the 400k house
After the last crash when these 400k houses where selling for 250k they where under valued
Some one else rightly pointed out the new regs have added a huge chunk to building costs ,but also health and safety in construction has easily added another large chunk to this since the 2000s.
I honestly don’t know what the answer is for Jane and joe maybe more 50/50 government help to buy schemes
But what I do know is that the value of a property is always going to float + or- around the cost of build plus land

Villa05

Pixlated Potatoe wrote:

The construction costs make up most of the value ,levies taxes ect...that you suggest are not going to make Jane and joe on a combined salary of €60k per year able to afford the 400k house After the last crash when these 400k houses where selling for 250k they where under valued Some one else rightly pointed out the new regs have added a huge chunk to building costs ,but also health and safety in construction has easily added another large chunk to this since the 2000s. I honestly don’t know what the answer is for Jane and joe maybe more 50/50 government help to buy schemes But what I do know is that the value of a property is always going to float + or- around the cost of build plus land

There are plenty of homes selling for below 250k. Regulation costs can be reduced to 800euro as is the case in Northern Ireland and there system is more independent, effective and accountable, unlike our system here.

Graham

Villa05 wrote: »

Regulation costs can be reduced to 800euro as is the case in Northern Ireland and there system is more independent, effective and accountable, unlike our system here.

The regs relate to additional construction/material costs to improve energy efficiency. Not the costs of somebody with a clipboard.

The local authority contributions here are much higher than any NI equivalent, largely because they're used in lieu of higher property tax.

Villa05

Would forfeiting construction taxes for a recurring property tax similar to UK be a workable solution for all new builds in aiding affordablity.

Significant savings in heating an A rated house would help cover the increased annual tax

Implement measures that prevent the developer from soaking up the construction taxes as increased profit

mcsean2163

Cyrus wrote: »

im open to correction on this but afaik the state pays close enough to the going rate for those houses, i think they can specify lower cost F&F etc to bring the price down etc but it would be single digit percentages.

thats why they have done deals with developers in more expensive estates to take units elsewhere.

That should be illegal.

Graham

Villa05 wrote: »

Would forfeiting construction taxes for a recurring property tax similar to UK be a workable solution for all new builds in aiding affordablity.

It would also make sense from the perspective of giving LAs a more consistent income.

Have you seen the protestations when anything like that is suggested though.

Probably heading a bit OT there though.

Villa05

Graham wrote:

The regs relate to additional construction/material costs to improve energy efficiency. Not the costs of somebody with a clipboard.

I think the person with the clipboard would be one of the more expensive labour costs on the building site

A phenomenon not exclusive to the construction industry of course

Villa05

Graham wrote:

Have you seen the protestations when anything like that is suggested though.

I have not heard it suggested before.

Any FTB thoughts out there. Would you pay a higher recurring tax annually if you could knock 30/40k of the price of a new build house.

The savings on reduced mortgage and reduced heating costs would easily cover the increased tax

Graham

Villa05 wrote: »

I have not heard it suggested before.

Any FTB thoughts out there. Would you pay a higher recurring tax annually if you could knock 30/40k of the price of a new build house.

I was actually referring to increased LPT across the board, I don't think the LAs are in a position to allow a 30 year payment plan for a small number of FTBers.

Cyrus

mcsean2163 wrote: »

That should be illegal.

Social housing in expensive estates ?

Yes I tend to agree .

combat14

Pixlated Potatoe wrote: »

That’s irrelevant

If you were a builder and it costs you 300k to build the house and 50k for the land do you sell it for 400k or 300k

you can try sell the same house for a million if you like but if no one can afford it that wont work either

perhaps the builders should look at reducing the cost of the build, factor in actual real peoples wages i.e. what people in a real world can actually afford given so many cant save as much now with rents sky high .. and we can all meet in reality in the real world

PropQueries

combat14 wrote: »

you can try sell the same house for a million if you like but if no one can afford it that wont work either

perhaps the builders should look at reducing the cost of the build, factor in actual real peoples wages i.e. what people in a real world can actually afford given so many cant save as much now with rents sky high .. and we can all meet in reality in the real world

Last week, the Irish Housebuilders Association said:

“The fact is policy-influenced and soft costs account for 50pc-52pc of the cost of any home, said the report. A homebuilder building for the State can do so for 50pc cheaper because these additional soft costs are not in play."

Link to article in Irish Independent here: https://www.independent.ie/business/irish/builders-blame-government-soft-costs-for-social-housing-expense-39798455.html

Also, on MyHome today, there are over 70 listings for A-Rated houses in Ireland with asking prices of less than €250k.

So, construction material costs can’t be the reason for the higher price of new built homes in Dublin. I also don’t believe it’s labour costs as otherwise construction workers would commute to Dublin if the wage differential was indeed that high.

L1011

PropQueries wrote: »

I also don’t believe it’s labour costs as otherwise construction workers would commute to Dublin if the wage differential was indeed that high.

They do. Huge proportion of construction workers in Dublin are from Northern Ireland, commuting daily or weekly.

Marius34

combat14 wrote: »

you can try sell the same house for a million if you like but if no one can afford it that wont work either

perhaps the builders should look at reducing the cost of the build, factor in actual real peoples wages i.e. what people in a real world can actually afford given so many cant save as much now with rents sky high .. and we can all meet in reality in the real world

In real world private companies won't produce if there is no profit to make. And if there is good profits, supplies will ramp up.