Investment Firms Buying Estates

RichardAnd

ongarite wrote: »

She may be angry but it was misdirected.
Investment funds weren't stopping her from buying a house.

She was in dreamland looking for a house near Finglas for 225K.
Do well to find a 2 bed apartment for that money anywhere in Dublin city/county.

At current prices yes. However, I think her point was that without funds' and institutions' buying up property, prices would not be so high.

DubCount

RichardAnd wrote: »

At current prices yes. However, I think her point was that without funds' and institutions' buying up property, prices would not be so high.

That is simply not the case. An excess of demand for housing exceeding the supply of housing coming on stream causes house price inflation, as does the increasing the cost of building.

Developers cannot build houses for 225k, let alone sell them for that price. Poor planning processes, excess building regulations, minimum wages, VAT on property, local authority charges.......

If you want "affordable property", you have to figure out how to build it for a price that makes it affordable. If it costs 300k to build a house, and there is a long line of people (buy-to-own or investors) prepared to pay 400k for it, you're never going to get to "affordable" without subsidy - and someone must pay for the subsidy (tax payers or other buyers).

RichardAnd

DubCount wrote: »

That is simply not the case. An excess of demand for housing exceeding the supply of housing coming on stream causes house price inflation, as does the increasing the cost of building. .

I agree. However, if we were to take investment funds and councils out of the market, that would immediately reduce demand, and prices would fall.

Spideoige

DubCount wrote: »

That is simply not the case. An excess of demand for housing exceeding the supply of housing coming on stream causes house price inflation, as does the increasing the cost of building.

Developers cannot build houses for 225k, let alone sell them for that price. Poor planning processes, excess building regulations, minimum wages, VAT on property, local authority charges.......

If you want "affordable property", you have to figure out how to build it for a price that makes it affordable. If it costs 300k to build a house, and there is a long line of people (buy-to-own or investors) prepared to pay 400k for it, you're never going to get to "affordable" without subsidy - and someone must pay for the subsidy (tax payers or other buyers).

That's all well and good but how is it possible for some developers to sell new units for 205,000 in Wexford? It's inflated land values and the government and local authorities are in a prime position to develop some of their own lands without having to pander to a developer who is either overvaluing their lands or paid too much for the site (where have we heard that one before?).

https://www.myhome.ie/residential/brochure/cluain-beag-clonard-wexford-town-wexford/4450354

TheRef

DubCount wrote: »

That is simply not the case. An excess of demand for housing exceeding the supply of housing coming on stream causes house price inflation, as does the increasing the cost of building.

Developers cannot build houses for 225k, let alone sell them for that price. Poor planning processes, excess building regulations, minimum wages, VAT on property, local authority charges.......

If you want "affordable property", you have to figure out how to build it for a price that makes it affordable. If it costs 300k to build a house, and there is a long line of people (buy-to-own or investors) prepared to pay 400k for it, you're never going to get to "affordable" without subsidy - and someone must pay for the subsidy (tax payers or other buyers).

Hold on a second. Minimum wages has absolutely nothing to do with the cost of houses. Minimum wage is already below the living wage, and expecting people to live in poverty to build houses when they will never be able to afford one is unconscionable.

Also, the narrative that there are not enough builders is just nonsense. It's very easy to find workers in non-EU countries and bring them in on a temporary basis.

Topgear on Dave

RichardAnd wrote: »

I agree. However, if we were to take investment funds and councils out of the market, that would immediately reduce demand, and prices would fall.

What would you do with all the renters that need somewhere to live?

timmyntc

Topgear on Dave wrote: »

What would you do with all the renters that need somewhere to live?

Councils & investment funds have the finance to commission new builds - thats the difference.
They can add to supply - whether investment funds choose to is another thing, but council should definitely commission new builds

thegetawaycar

ongarite wrote: »

She may be angry but it was misdirected.
Investment funds weren't stopping her from buying a house.

She was in dreamland looking for a house near Finglas for 225K.
Do well to find a 2 bed apartment for that money anywhere in Dublin city/county.

If the council and charities stopped buying up property in Finglas then 225K would be close to reasonable. No entity, state or otherwise should be allowed buy up (in the states case that should include rent) more than 15% of a new development, let those who want to pay their way offer and get the market to become more reasonable.

Where can one get access to the list of council owned/rented property?

maestroamado

Originally Posted by maestroamado View Post
Personally i think this should be addressed at the planning stage as it is in other countries.
If a corporation want to build 50,000 apartments let them do the development and sell or rent.
There was something like 290 houses around Lepardstown sold to one of these funds.
I wonder what was in the original planning application...

This is two years ago from a thread i created "Cuckoo Property"
This has being bugging me for about 3 years but was not given much heed at the time....

DubCount

TheRef wrote: »

Hold on a second. Minimum wages has absolutely nothing to do with the cost of houses. Minimum wage is already below the living wage, and expecting people to live in poverty to build houses when they will never be able to afford one is unconscionable.

Also, the narrative that there are not enough builders is just nonsense. It's very easy to find workers in non-EU countries and bring them in on a temporary basis.

I am not against the minimum wage, or the living wage for that matter. However there is a significant amount of man-power hours that goes into building a house. If you pay all the workers a living wage or above, that increases the cost of building.

The minimum wage in Ireland is much higher than the UK for example, so building houses is more expensive here.

If you want good living standards for workers, premium materials used in construction, high levels of tax etc., you cant expect to magic up buildings for very low prices.

JimmyVik

thegetawaycar wrote: »

If the council and charities stopped buying up property in Finglas then 225K would be close to reasonable. No entity, state or otherwise should be allowed buy up (in the states case that should include rent) more than 15% of a new development, let those who want to pay their way offer and get the market to become more reasonable.

Where can one get access to the list of council owned/rented property?

That would be a big list at this point

Geuze

DubCount wrote: »

The minimum wage in Ireland is much higher than the UK for example, so building houses is more expensive here.

UK min wage 2021 = 8.91 GBP.

Today's rate is 1 euro = 86.8pence

That is 10.27 euro.

Our min wage is 10.20

Practically no difference.

Klopp

Ireland are part of the EU, why is it buying houses and importing cars, we allow bidding wars driving up the prices and are subjected to Vrt and Nox on any cars imported.

Geuze

Geuze

SCSI 2020 house building cost data: 114 sqm house in Dublin.

Construction cost = 179k, this includes site works and site development
"Soft" costs = 192.5k
Total costs = 371k.

The soft costs include:

Land = 61k
Finance = 16.7k
Profit = 43k
VAT = 44k

(1) site costs - these need to fall, in my opinion by at least 80%

The land costs for a 114 sqm house in Dublin in 2020 are 60,823.

In my opinion this is way too high, it needs to fall to 10k-20k per house/apt.

(2) finance costs of 16,716.

Given that ECB rates are 0%, these finance costs are way too high.

A friend works in property finance. He tells me senior debt for the first 60% is more expensive than you'd think, like 5-6%. After putting up 20%, the developer must then raise "mezzanine" finance for the final 20%. This can cost 12%-14%.

This is completely insane.


(3) developers 15% profit margin, 42,671 per unit

If we de-risked development, this could be reduced.

timmyntc

DubCount wrote: »

I am not against the minimum wage, or the living wage for that matter. However there is a significant amount of man-power hours that goes into building a house. If you pay all the workers a living wage or above, that increases the cost of building.

The minimum wage in Ireland is much higher than the UK for example, so building houses is more expensive here.

If you want good living standards for workers, premium materials used in construction, high levels of tax etc., you cant expect to magic up buildings for very low prices.

Who is working on building sites for minimum wage?

The reason for high cost to build here is because of
- land prices (demand driven)
- low supply of timber (forestry licensing issues & general low supply)
- building regs on new builds (energy ratings etc)
- carbon taxes affecting almost all building materials

Everyone on site earns well above minimum wage - now the high cost of living in this country would factor into that, but fiddling with the minimum wage wont change anything.

Wanderer78

DubCount wrote: »

That is simply not the case. An excess of demand for housing exceeding the supply of housing coming on stream causes house price inflation, as does the increasing the cost of building.

Developers cannot build houses for 225k, let alone sell them for that price. Poor planning processes, excess building regulations, minimum wages, VAT on property, local authority charges.......

If you want "affordable property", you have to figure out how to build it for a price that makes it affordable. If it costs 300k to build a house, and there is a long line of people (buy-to-own or investors) prepared to pay 400k for it, you're never going to get to "affordable" without subsidy - and someone must pay for the subsidy (tax payers or other buyers).

the main cause of house price inflation has in fact been related to the overall money supply to the market, primarily in the form of credit, and now with rapidly rising deposits, this is further inflating prices. you can clearly see this in this previous snap shot of our debts, which of course lead us straight into 08

Topgear on Dave

Geuze wrote: »

(3) developers 15% profit margin, 42,671 per unit

If we de-risked development, this could be reduced.

Good luck with that, weren't many sites closed for 4 or 5 months of the last 12. Covid certainly wasnt in any builders plans. Who knows what else could happen.

Donald Trump

Geuze wrote: »

(3) developers 15% profit margin, 42,671 per unit

If we de-risked development, this could be reduced.

I've made this point before. But that should not be included in "building costs". It would not be included as a "cost" in figures for any other industry.



It is double counting, especially if you are already including this along with finance costs which are as a result of the finance companies taking the actual market risk.


A proper site tax should be levied on all sites zoned for a particular purpose until they are developed. That would deter developers from hoarding and sitting on sites.

The Student

Wanderer78 wrote: »

the main cause of house price inflation has in fact been related to the overall money supply to the market, primarily in the form of credit, and now with rapidly rising deposits, this is further inflating prices. you can clearly see this in this previous snap shot of our debts, which of course lead us straight into 08

Credit has been constrained by the Central Bank rules. People have been able to save deposits during the lockdown and will raise prices due to supply constraints.

The State has been responsible for a number of causes of price increase. HAP, tax take from individual landlords, RPZ and the pro tenant RTB.

Also on the above is the States refusal to construct social housing. Equal to this is the whole concept of non eviction of non paying social tenants.

We can't afford to put further debt on the State to build these properties. Our national debt is unsustainable at the moment without incurring more.

RichardAnd

The Student wrote: »

Credit has been constrained by the Central Bank rules. People have been able to save deposits during the lockdown and will raise prices due to supply constraints.

The State has been responsible for a number of causes of price increase. HAP, tax take from individual landlords, RPZ and the pro tenant RTB.

Also on the above is the States refusal to construct social housing. Equal to this is the whole concept of non eviction of non paying social tenants.

We can't afford to put further debt on the State to build these properties. Our national debt is unsustainable at the moment without incurring more.

Don't forget the closing construction sites and creating the "bid-to-view" system.

timmyntc

Wanderer78 wrote: »

the main cause of house price inflation has in fact been related to the overall money supply to the market, primarily in the form of credit, and now with rapidly rising deposits, this is further inflating prices. you can clearly see this in this previous snap shot of our debts, which of course lead us straight into 08

No - you've posted this on several threads and been called out on it each time.

If your graph was anything to go by, surely our house prices would be multiples higher than the height of the boom given we have so much more private debt in this country.

Or maybe its because the vast majority of the private debt in that graph is debt loaded onto corporations that are located here for tax reasons.
It has nothing to do with house prices.

Wanderer78

The Student wrote: »

Credit has been constrained by the Central Bank rules. People have been able to save deposits during the lockdown and will raise prices due to supply constraints.

The State has been responsible for a number of causes of price increase. HAP, tax take from individual landlords, RPZ and the pro tenant RTB.

Also on the above is the States refusal to construct social housing. Equal to this is the whole concept of non eviction of non paying social tenants.

We can't afford to put further debt on the State to build these properties. Our national debt is unsustainable at the moment without incurring more.

yes credit has indeed been limited towards irish borrowers, but not towards international borrowers, including investment funds, and since we have relative free movement of capital, have a guess where its been going to?

timmyntc wrote: »

No - you've posted this on several threads and been called out on it each time.

If your graph was anything to go by, surely our house prices would be multiples higher than the height of the boom given we have so much more private debt in this country.

Or maybe its because the vast majority of the private debt in that graph is debt loaded onto corporations that are located here for tax reasons.
It has nothing to do with house prices.

as explained above!!!

we need to move on from all this deficit nonsense, deficits are simply the public entity of the money supply, credit being the private sector entity, once again, in order to have a growing and expanding economy, we must also have a growing and expanding money supply, i.e. our debts must increase, as debt is our money supply. we have become overly reliant on the private sector entity of the supply, i.e. credit markets, which is the primary source of credit fueled booms and busts. you need to look at the overall global money supply, both public and private sector money supplies, in order to see the bigger picture

L1011

Wanderer78 wrote: »

yes credit has indeed been limited towards irish borrowers, but not towards international borrowers, including investment funds, and since we have relative free movement of capital, have a guess where its been going to?



as explained above!!!

we need to move on from all this deficit nonsense, deficits are simply the public entity of the money supply, credit being the private sector entity, once again, in order to have a growing and expanding economy, we must also have a growing and expanding money supply, i.e. our debts must increase, as debt is our money supply. we have become overly reliant on the private sector entity of the supply, i.e. credit markets, which is the primary source of credit fueled booms and busts. you need to look at the overall global money supply, both public and private sector money supplies, in order to see the bigger picture

Take this theory to the Economics forum. Do not post it on here again

C14N

Donald Trump wrote: »

A proper site tax should be levied on all sites zoned for a particular purpose until they are developed. That would deter developers from hoarding and sitting on sites.

Should be on all property for any purpose. We have taxes for undeveloped properties, they're just not enforceable, and things can be arguably "developed" while also being extremely under-utilized. It's always easy for property owners, even of vacant or derelict properties, to come up with some legal argument for why it's not vacant/derelict. If the tax is just applied across the board to everything, you don't end up with this.

godtabh

.42. wrote: »

Could it not be that investment funds should be submitting planning permission for these estates and fund the building of them?

That will happen if funds are blocked from buying estates

CollyFlower

Jesus, the worm has really turned here, it looks like that any new builds will have to leave aside a - % for private buyers and give the majority of the units to social tenants.

Just curious here but do investment funds have to pay a yearly property tax on each unit they hold?

The signal being given to the Investment Companies/REITs is that this is business as usual despite the soothing words of the Politicians to the Citizens.
The favourable tax breaks will remain. The underlying supply issues will not be address through introduction of new strategies to address the shortfall.
This gives Investors an assurance that their investment is being supported by Government and that its scarcity will be assured.
There is no reason for Investors to stop buying housing/apartment developments.

The hypothesis after the crash was that "the Market" would deliver residential property to market while simultaneously supporting the Courtry's financial system and it was encouraged by Government pulling every lever avaiable to it in terms of facilitating agressive tax planning, inward migration, social housing policy, pension planning.
No sanity check is being done by Government to see if the expected outcome was being achieved and they don't even want to assess the situation as that would involve coming to the conclusion that the Government at the time in which FG was the largest party with a confidence of supply agreement from FF made a bad choice.
Two FG Teachers from the West made the decisions over 10 years ago which brought us here.

Donald Trump

C14N wrote: »

Should be on all property for any purpose. We have taxes for undeveloped properties, they're just not enforceable, and things can be arguably "developed" while also being extremely under-utilized. It's always easy for property owners, even of vacant or derelict properties, to come up with some legal argument for why it's not vacant/derelict. If the tax is just applied across the board to everything, you don't end up with this.

Easy to do for any land zoned as residential. As soon as it is zoned you pay rate X. When planning permission is granted you freeze that for say a two year window and after that is elapsed you pay rate Y. That only stops when the units are paying residential property tax.

maestroamado

_ZeeK_ wrote: »

Seeing reports of investment firms buying parts of estates or whole estates.

https://www.businesspost.ie/houses/global-property-investment-firm-buys-most-of-170-home-estate-in-kildare-783922ac

Just wondering if anyone has come across this? E.g. buying a new home and discovering your neighbouring properties would be owned by private funds.

If so, how did you discover this? Presumably the developer isn’t obliged to disclose this information.

For me this has been Government policy for the last few years as i mentioned it here some time ago.
SF made noise about it a few years ago but it's much of a point if they cannot follow through.
It's sad to think that there is a generation of professional people coming on-stream who will never aspire to own a home of their own.
All of the politicians are talking about it now but what were they doing when it has been happening and they seem to be saying they were not aware this was going on.
There will be a bit of chatter about it for a few weeks and then some new topic will be the news.
I do not think the trend we have been following for about the last 5 years can be easily reversed.
There will surely be another recession coming down the line so that may re-adjust the balance.
I pasted in a couple of links i pulled from an old thread as advised by one of the mods.


Good luck with the search...



https://www.thejournal.ie/un-ireland-vultures-funds-tax-4563403-Mar2019/



https://www.thejournal.ie/cuckoo-funds-review-fianna-fail-4583259-Apr2019/


https://www.independent.ie/irish-news/rush-for-build-to-rent-as-plans-for-more-than-6000-properties-are-tabled-in-just-five-days-38100933.html


https://www.boards.ie/vbulletin/showthread.php?t=2057979369