2021 Irish Property Market chat - *mod warnings post 1*

Villa05

Bass Reeves wrote:

Availability of finance. Finance is too much loaded in favour of new builds. At present in Limerick a new build in Mungret gate is costing 290k. As a FTB you access the 10% tax relief which is 29k.

There is a thread on the Limerick forum dedicated to the social housing aspect of that development and it would appear the seeds of my fears have been sown

Villa05

jill_valentine wrote:

Just as a reminder for the sake of it - these chaps, the IIP, who would so generously consider allowing a number of serfs to buy a plot, got the IT to print a full on puff piece about how brilliant the Shared Equity scheme actually is, with the framing we're all just too stupid to appreciate it and a disclosure of Pat Farrell's affiliation only very delicately tucked in at the very end, on Monday.

That Same publication stated that the scandal in Davys was a rogue action despite the entire management team being involved and internal controls being bypassed
At the time Davy sponsored there
Insde Business podcast

Follow the money

Amadan Dubh

Mic 1972 wrote: »

Regarding long term leasing to the council, it's important to point out that a lot of estates - especially apartment blocks and gated estates - have restrictions that don't allow for social housing.
Investment companies have no interest acquiring random residential properties that cannot be rented out to the council. They will focus solely on new builds - new estates or new apartment blocks - so that they can set their own management rules and allow for social housing.

First time buyers are better off looking for second hand properties inside established estates where there is no competition from multinational investors and also there is no risk for social house next door.

We could be considered in the FTB bracket (though not very motivated to buy right now given we love the rental and area we live) but my feeling is starting to shift towards looking for the second hand properties in established areas should we look to buy somewhere for this reason you have mentioned. For now, we'll be keeping the powder dry until spring 2023 but I'm leaning towards a second hand house when the time comes.

Villa05

Cal4567 wrote:

Not entirely correct. These guys have been acquiring single properties as well as packages. I hear others have been doing too and then putting them together as 'portfolios' for either other investment vehicles or Councils. I agree though at the moment for FTBs, it is probably more sensible to buy second hand.

Yip, these boards were full of reports of sales falling through as the banks were putting properties into portfolios rather than proceeding with sale back as far as 2014

Villa05

Cal4567 wrote:

One could say good old greed has taken over, which was a catalyst for the financial crash. The acquisition by just the single entity of an estate in Kildare, has focused the eyes on the whole private and social housing property industry.

This could mothball very quickly, it's not just home seekers affected. Business is severely impacted by rents especially post covid. One could see a national down tools and all out protest supported by business and MNC.

Lines are being crossed

Sweet.Science

I suppose councils need these funds as a roundabout way of building social housing ?

Long term leasing is cheaper for their annual budget than building houses themselves

Mic 1972

Cal4567 wrote: »

Not entirely correct. These guys have been acquiring single properties as well as packages. I hear others have been doing too and then putting them together as 'portfolios' for either other investment vehicles or Councils. I agree though at the moment for FTBs, it is probably more sensible to buy second hand.

https://www.irishtimes.com/business/commercial-property/solas-living-pays-40m-for-157-homes-across-dublin-and-kildare-1.4530153

They buy second hand only if they can rent long term to the council, which is often not possible inside managed estates or apartment blocks.
I have asked this question to the EAs for the last few month, often cases the long term leasing to council was not an option

Cal4567

Mic 1972 wrote: »

They buy second hand only if they can rent long term to the council, which is often not possible inside managed estates or apartment blocks.
I have asked this question to the EAs for the last few month, often cases the long term leasing to council was not an option

Actually there are a few examples now out there of investment entities taking a double pronged approach. Some stock for PRS, some for social. I'm expecting the media to refer to this at some point, once they dig further. The 'portfolio' which can then be sold on to another private investment firm, could comprise both types of property. Or they keep the stock for their own company needs. Whatever they do, it still all takes out properties that could have suited individual private buyers.

combat14

dundrum shopping centre now also reporting significant problems getting staff and shops wont be able to open full hours as a result ... where have all the workers gone..... have they gone home to their home countries or is there something else a foot..?

jill_valentine

combat14 wrote: »

dundrum shopping centre now also reporting significant problems getting staff and shops wont be able to open full hours as a result ... where have all the workers gone..... have they gone home to their home countries or is there something else a foot..?

I wouldn't be in a massive hurry to work for an industry that could drop me again like a hot snot if there's another global event like this. Certainly not a public facing one until I've been vaccinated, and most would-be retail staff will be more or less last in line for that.

I know a few ex bartenders who were all treated horribly by their bosses when this all kicked off, all except one have found or are seeking work in a different industry altogether now. I expect Press Up and NolaClan in particular to have quite a bit of trouble coaxing many of their former staff back.

Mad_maxx

Sweet.Science wrote: »

I suppose councils need these funds as a roundabout way of building social housing ?

Long term leasing is cheaper for their annual budget than building houses themselves

plus a sizeable chunk of the rent paid out goes back to the state

combat14

Rte reporting tonight that home-builders reveal the staggering increases that have added almost €70,000 to the cost of their house.

what in blazes is happening in this country ....?

how will young people stay here at this rate if this continues and the government dont take voter leds steps to address the housing issue

Hubertj

combat14 wrote: »

Rte reporting tonight that home-builders reveal the staggering increases that have added almost €70,000 to the cost of their house.

what in blazes is happening in this country ....?

how will young people stay here at this rate if this continues and the government dont take voter leds steps to address the housing issue

It’s the same globally. Raw materials have increased in price, supply chain issues, manufacturing, specilation. My brother is a plumber in Boston. Materials have increased in prices and there is up to 6 week waiting time for some basic raw materials. Look at other industries having similar issues - semi conductors, chips etc. Some car manufacturers have had to slow production.

cnocbui

More evidence that investment funds are not essential instigators of property provision:

Investment firm that bought majority of Kildare estate now jointly buys 112-house unit in Dublin
...
The companies plan to rent out all 112 properties when the scheme is finished in early 2022, with the first properties due to completed this month and all homes now available for reservation.

https://extra.ie/2021/05/04/business/property/round-hill-buys-dublin-estate

cnocbui

Hubertj wrote: »

It’s the same globally. Raw materials have increased in price, supply chain issues, manufacturing, specilation. My brother is a plumber in Boston. Materials have increased in prices and there is up to 6 week waiting time for some basic raw materials. Look at other industries having similar issues - semi conductors, chips etc. Some car manufacturers have had to slow production.

Yes, the US media is making a big fuss over the soaring cost of timber which has added significantly to the cost of house construction:

Lumber prices have soared 230% in the last year, pushing timber and homebuilding ETFs to record highs

https://markets.businessinsider.com/news/stocks/lumber-prices-spot-futures-etf-wood-nail-timber-homebuilding-stocks-2021-4-1030323956?op=1

hometruths

Hubertj wrote: »

It’s the same globally. Raw materials have increased in price, supply chain issues, manufacturing, specilation. My brother is a plumber in Boston. Materials have increased in prices and there is up to 6 week waiting time for some basic raw materials. Look at other industries having similar issues - semi conductors, chips etc. Some car manufacturers have had to slow production.

And agricultural commodities rocketing as well. But no doubt some bright spark will post up the CPI figures and tell us there is no fear of inflation.

RichardAnd

schmittel wrote: »

And agricultural commodities rocketing as well. But no doubt some bright spark will post up the CPI figures and tell us there is no fear of inflation.

Given the amount of funny-money created over the past year, commodities are rising just about everywhere.

EddieN75

Tomorrow's front pages

https://twitter.com/gavreilly/status/1391137864767918086?s=20

combat14

'Cost of building our house has risen by 30% in a year'

https://www.rte.ie/news/regional/2021/0508/1217765-construction-costs-rising/

hard to see banks lending 30% extra for mortgages with current income limits

people will have to demand even higher wages from employers who have been decimated from a year long shutdown .. hard to see employers paying more at present

something is going to have to give ...

yer man!

RichardAnd wrote: »

Given the amount of funny-money created over the past year, commodities are rising just about everywhere.

So this is just flat out inflation then no?

Deleted User

Deleted User wrote: »

I've contacted my 5 local TDs. One gave a generic reply (FG), one gave an actual reply, asking for my number, to discuss it further (Ged Nash, Labour) and the other three didn't reply.

Ged hasn't actually rang me yet, but I'm curious to see will he. I'd imagine there's a lot of them being swamped with this. Not sure what good talking to me will do, though, but it's brilliant that he actually wrote a (real) reply. Though in saying that, I've his heart broke (or more specifically, his assistant's heart) with issues where I live, so maybe he's just familiar with me.

Just to follow up on this, Ged Nash rang me and we spent about half an hour talking about housing, the various issues and where we'll likely be in another 10 or 20 years.

Of course, we didn't achieve anything (it's not like I could greenlight any of his ideas, or him, mine) but it was good to hear his perspective and thoughts. He seems a genuine enough chap and we have similar opinions. I am surprised that he spent so much time on it. I have 5 local TDs:

Ged Nash (Labour): Personal email and spent 30 mins on the phone.
Fergus O'Dowd (FG): Generic email reply.
Imelda Munster (SF): No reply.
Ruairí Ó Murchú (SF): No reply.
Peter Fitzpatrick (Ind): No reply.

Amadan Dubh

combat14 wrote: »

'Cost of building our house has risen by 30% in a year'

https://www.rte.ie/news/regional/2021/0508/1217765-construction-costs-rising/

hard to see banks lending 30% extra for mortgages with current income limits

people will have to demand even higher wages from employers who have been decimated from a year long shutdown .. hard to see employers paying more at present

something is going to have to give ...

This would also significantly affect fixer uppers presumably, the increased building costs? That would put a ceiling on what sellers were hoping to obtain as well.

combat14

Amadan Dubh wrote: »

This would also significantly affect fixer uppers presumably, the increased building costs? That would put a ceiling on what sellers were hoping to obtain as well.

very valid point if fixer uppers will cost far more to 'fix up' people will need to pay less for them given lending constraints .. these prices will have to drop

otherwise buyers especially FTB may as well wait for new house and avail of govt 10% deal till end of this year anyway

Villa05

Amadan Dubh wrote:

This would also significantly affect fixer uppers presumably, the increased building costs? That would put a ceiling on what sellers were hoping to obtain as well.

Inflation of that nature will redefine what a fixer upper is. The days of chucking out a perfect kitchen to be replaced by an inferior one because you don't like the look of it may be over

yagan

yer man! wrote: »

So this is just flat out inflation then no?

Not necessarily.

When demand for any commodity suddenly drops there's an overhang of supply, oil actually went negative for a brief period back in March/April 2020.

As the global economy reopens mining and other extraction operations take time to reopen.

After the first reopening I went to buy some patio slabs but they were awaiting stock as producers everywhere were reopening at the same time.

You call it the whiplash to the slack from shutdowns.

cnocbui

Amadan Dubh wrote: »

This would also significantly affect fixer uppers presumably, the increased building costs? That would put a ceiling on what sellers were hoping to obtain as well.

Depends on the scale of upgrading we are talking about. The amount of structural work required for most fixer uppers is going to be vastly less than that involved in building from scratch, therefore the affect of these cost increases is going to be far greater on a new build than something existing.

The exception might be roof insulation, which likely wouldn't be any less, but not many fixer uppers need the roof taking off and a new one constructed from scratch.

A lot of what fussy people call fixer-uppers is little more than re-decorating. Very rarely is the term meant for taking something built in 1893 from stone and turning into something more suited to current expectations of comfort.

I see this as increasing the attractiveness of existing homes while also increasing their relative value and the price sellers can expect.

Villa05

jill_valentine wrote:

Just as a reminder for the sake of it - these chaps, the IIP, who would so generously consider allowing a number of serfs to buy a plot, got the IT to print a full on puff piece about how brilliant the Shared Equity scheme actually is, with the framing we're all just too stupid to appreciate it and a disclosure of Pat Farrell's affiliation only very delicately tucked in at the very end, on Monday.

I see on the sindo today that Pat Farrel is the former General secretary of the Fianna Fail party

You have former ministers of ffg being the mouthpieces for the banking, construction and now this guy for investment funds

Quite a gravy train for our politicians

cnocbui

I think any notions of housing price falls people were expecting, have well and truly been trumped by reality.

The only thing that could bring housing price declines in the next few years would be anothe GFC. With the US expecting something like 6.5% GDP increase, the UK 7.5, and proabably simmilar throught the OECD countries, the next financial market meltdown is likely years further out now.

People taking themselves out of the current market because they think it is too extreme, hoping for it to calm down and become more affordable, are making a mistake.

Idbatterim

The cost of vat on building materials and house price purchase is a joke. If there was a proper lpt and appropriate rents for social housing, you wouldn't need to rob one cohort of society... at the moment, huge amounts are benefitting colossal and immoral, at our expense...

But they wont touch lpt etc, they are totally screwed, they have made their own bed, cant wait for the fallout and political carnage now over the next few years...

Mic 1972

cnocbui wrote: »

I think any notions of housing price falls people were expecting, have well and truly been trumped by reality.

The only thing that could bring housing price declines in the next few years would be anothe GFC. With the US expecting something like 6.5% GDP increase, the UK 7.5, and proabably simmilar throught the OECD countries, the next financial market meltdown is likely years further out now.

People taking themselves out of the current market because they think it is too extreme, hoping for it to calm down and become more affordable, are making a mistake.

Agreed.


For me there were never any signs of prices slowing down, the asking prices were all pointing upwards in 2020 and still do now.


Prices will continue to go up