Irish Property Market chat II - *read mod note post #1 before posting*

fliball123

https://www.boards.ie/discussion/comment/120653684#Comment_120653684

Thanks for that and I also predicted prices would start dropping this year around April of last year due to the interest rate hikes and got ridiculed again basically changing my opinion on property prices from 2020 and its happening currently and some here stick the head in the sand and refuse to believe it.

DownByTheGarden

https://www.boards.ie/discussion/comment/120653684#Comment_120653684

He is closing his eyes and wishing for it now though to be fair. Imagine thinking that builders are going to keep building houses if they cant make a profit from it. Its not even the most outlandish thing he has said either.

DataDude

https://www.boards.ie/discussion/comment/120653684#Comment_120653684

Can second this. Have been on this thread since 2020 and of all the posters making predictions, fliball has been by far the most accurate.

Predicted a boom in 2020 when conventional wisdom suggested otherwise. Predicted a fall a few months in advance of all the CSO stats turning negative late last year.

I disagreed with him most of the time so think that makes me the least accurate 😂

fliball123

https://www.boards.ie/discussion/comment/120653705#Comment_120653705

So In your opinion 10 Billion profit made by 50 construction companies = no profit :) now who is in fantasy land there? I have simply tried to explain to people like yourself that the squeeze will be put on construction companies once the shinners get into power the status quo that has been there for 2/3 decades will be broken and they have made no secret about the vacant property tax and am pointing to other facts like the continuous upping of interest rate hikes will mean a higher % of our population will not be able to afford the current price point for property, this can already be seen with the property price drops seen over the last 6 months.

Dav010

https://www.boards.ie/discussion/comment/120653741#Comment_120653741

Profit isn’t realised at the start though, unless the developer sells early to an institutional/state investor. A project which begins today may be at last two years away from going for sale, and longer again before developers see the profit. So it is highly probable that if prices are stagnating/falling now, they may be lower in two years time. Developers are trying to predict profit margins in the future, something that was easier to do a few years ago, if they are in doubt, then like all investors, they choke off investment.

hometruths

https://www.boards.ie/discussion/comment/120653716#Comment_120653716

 Have been on this thread since 2020 and of all the posters making predictions, fliball has been by far the most accurate.

Agreed. And that's from a pretty big field, there has been no shortage of posters making predictions!

hometruths

https://www.boards.ie/discussion/comment/120653705#Comment_120653705

If you're a builder sitting on a land bank with a whopping great use it or lose it tax you will either build on it if you can do so at a profit or sell the land to somebody else who is able to build on it profitably.

Houses will still be built.

fliball123

https://www.boards.ie/discussion/comment/120653805#Comment_120653805

Yeah I understand this but most developers develop in phases so that they can realise profit on an ongoing basis. They may well choke investment like you say, but if the Shinners get in (and its looking more likely) and significantly up the vacant land tax. The question I am asking is how long can any construction company continue with an asset basically decreasing in value as the vacant site tax is eating into it and the property prices are dropping, throw in the new paradigm of higher and higher interest rates this will mean liquidity via loans is not really a viable option and this is going to be a serious issue one that will push many to the wall and if they are not building they have no revenue stream coming in either. DBTG may think I am wishing, but I have put up facts figures and interview links and he has more or less played the man and not the ball ( a sure sign your losing the argument) but I honestly cant see any company (construction or not) surviving using this model

Dav010

https://www.boards.ie/discussion/comment/120653835#Comment_120653835

If paying the tax is cheaper than building, then of course builders will pay the tax, also developers broadly all work in the same trading conditions, if one can’t turn a profit, there will be significant risk that the next one can’t either . Besides, there will be so many necessary exemptions that there is no guarantee that any new vacant property tax will be anymore successful than the current one.

hometruths

https://www.boards.ie/discussion/comment/120653868#Comment_120653868

That all depends on who is implementing the tax and how motivated they are to make it work.

As I understand it, fliballs point is that a) SF are likely to lead the next government and b) they are less likely to cater to the needs of developers with lots of necessary exemptions

That seems like reasonably sound logic to me. Certainly not wishful thinking.

dontmindme

https://www.boards.ie/discussion/comment/120653865#Comment_120653865

You're getting slightly ahead of yourself in the scenario you're painting. We have higher interest rates currently, the SF government however, if it ever happens that is, is at least another twelve months away, and it remains to be seen what they actually do once they take the reins.

fliball123

https://www.boards.ie/discussion/comment/120653868#Comment_120653868

That approach of paying the tax will mean that construction companies have to charge an even higher price for these properties to achieve the same profit margin. Already with property prices dropping it would suggest affordability has become a real issue for those buying so square peg round hole I don't know how they expect to sell at a higher price point when due to affordability prices are dropping.. The current vacant site tax is at too low a rate to make any difference currently

DataDude

https://www.boards.ie/discussion/comment/120653816#Comment_120653816

Bring back PropQueries. He was just a little ahead of the curve with his predictions!

Dav010

https://www.boards.ie/discussion/comment/120653906#Comment_120653906

The exemptions will not just be for the benefit of developers, they will apply to all vacant land owners and therefore must take into account the circumstances which may arise.

hometruths

https://www.boards.ie/discussion/comment/120654012#Comment_120654012

PropQueries was great! I actually PM'd him a few months ago with my shock late realisation:

Could fliball be a leading indicator?!

His reply:

😂 I actually noticed the same thing over the past 6 months or so.

fliball123

https://www.boards.ie/discussion/comment/120653939#Comment_120653939

True it is 12 months away but I dont think the shinners will be able to back down from fixing the "housing crisis" they have basically built up their credentials on the promise to fix this. So yeah it could be more of the same but if your a construction company looking at this in the current climate what would you do? 12 months is a short time in the construction game I mean as a previous posted pointed out some construction project last years. Sure look at the Childress hospital :)

DataDude

https://www.boards.ie/discussion/comment/120654101#Comment_120654101

Prop queries

’there was 60mm of rain in Cambodia yesterday. I think this clearly shows that there will certainly be AT LEAST a 60% drop in Irish House Prices in the next 3 months’

No end to that man’s creativity. The thread was better with him around.

hometruths

https://www.boards.ie/discussion/comment/120654146#Comment_120654146

He was definitely prone to a tangent, but I think there was some method in his madness. For example he was pointing out the impact of institutional money hoovering up everything in site and leasing them back to the government long before it became fashionable to moan about that.

Certainly agree the thread was better with him. Never really understood why he was banned. Irrespective of whether he was right or wrong, he was endlessly polite in the face of the dog's abuse his posts attracted.

In an case I doubt he'd come back now anyway even if he was allowed!!

BlueSkyDreams

https://www.boards.ie/discussion/comment/120654123#Comment_120654123

But what will the Shinners actually do regarding housing?

increase vacant land tax, yes.

Possibly restrict investment funds, which will just lead to fewer homes being built, not more.

We arent going to magic up thousands of tradesmen becasue the Shinners get in. So where is their labour?

I just dont see a clear path to them actually increasing output, especially when facing into a headwind of higher interest rates and building costs.

fliball123

https://www.boards.ie/discussion/comment/120654220#Comment_120654220

The shinners are the real unknown to be honest but they have made serious ground on the promise of fixing housing so I doubt they will be more of the same, but it is an unknown.

Well a really simple and cheap way would be to up the modular home initiative. This would give those needing a home somewhere to live and would ease the pressure valve on supply.

I mean you make statement after statement about construction companies not building but expect our younger generation to afford higher prices when they cant afford the current prices today. Companies are feeling the pinch with the cost of living and energy crisis and in a lot of cases cannot afford pay rises so where does the people 30 and under get the cash from, the banks are upping their rates on a monthly basis so this option is most likely going to cost more.

Funny you say we cant magic up thousands of tradesmen when we literally did that from 2021 to 2022 we have just added 40k construction jobs.

You argue without facts you are literally licking your finger and sticking it in the air to see what way the wind is blowing when it comes to your opinion.

https://irishbuildingmagazine.ie/2022/09/01/cso-report-shows-40000-increase-in-construction-employment/

BlueSkyDreams

https://www.boards.ie/discussion/comment/120654309#Comment_120654309

The Shinners are certainly an unknown prospect and yes, they have clearly set their stall out on house building.

But as we all know, promises are often made with little substance by politicians.

I am interested to see how they will increase housing output. What will they do differently...

I like the Modular home idea and there will likley be precedent for that at scale to house Asylum Seekers.

I wonder whether these homes will be objected into oblivion in urban areas, where people want to live, though.

I agree that the young folks cant afford the prices, but that doesnt mean the Shinners will oversee increased housing output, it just means that either the young wont get a look in (like today) or the prices will fall. Which, of course, is likley.

40k increase in contruction staff is a lot in 12 months, put its post covid and from Q2 2021 to Q2 2022.

Most industries were resetting during that period, so its to be expected.

i am thinking more in comparitive terms with today. The industry isnt going to expand at that rate from now and over the next 5 years.

If we take 2022 and 2023 housing outputs, which is 23k to 30k in 2022 and perhaps 20k to 25k this year, are the Shinners likley to up that output significantly?

I dont really see how.

Construction industry is expected to expand about 4% annually over the next 3 years, so no sign of large numbers of staff being made available from here on out.

Perhaps SF will invest more heavily in social housing completions & scale up teams there and hopefully they would take some blockages out of the planning process. But all that will take time to enact and years to realise.

Over the next 5 yrs, its hard to see the numbers rising too much over 30k per year, regardless of who is in govt.

Hopefully I am wrong.

dontmindme

As a current house hunter in the Dublin area, all I am seeing is higher asking prices and plenty of money to buy in the 300-400k range. Earlier this year I looked at a 3-bedroom house with garage for sale in Drimnagh, listed at €325, but with really low interest/demand at the beginning of the year 300k would have sealed the deal. Today houses that were being listed at high 2s or low 3s are now being listed at 340-350k. I see now two bed corpos in Drimnagh currently making >350k. Here's one that's currently at 375k (myhome website is a disaster for me currently)...

https://davidross.ie/property/190-carrow-road-drimnagh-dublin-12/

The price falls reported must be nationally as I'm not seeing it where I'm looking in my price range in Dublin.

Jonnyc135

https://www.boards.ie/discussion/comment/120653816#Comment_120653816

Well I predict that there will be a softening, time will tell especially if IR stay elevated for the next year or so and the 3-4 year fixer mortgage people at very low interest rates from 2019/covid times end up with some slapped ar$e.

Villa05

https://www.boards.ie/discussion/comment/120654487#Comment_120654487

The people that took a mortgage holiday during Covid may be feeling the pinch. I do hope they had the foresight to lock in there rates prior to the increases

Villa05

https://www.boards.ie/discussion/comment/120654447#Comment_120654447

You won't see price drops at that level in Dublin, more likely to see more competition as those that were fishing in the 400/500k pool have been kicked out to the 300/400k pool

PommieBast

https://www.boards.ie/discussion/comment/120653404#Comment_120653404

The whole point of building operations being a web of shell companies is there are no assets to take. It is criminal but it is how things are done.

It is a blunt instrument but some sort of use it or lose it has to be introduced into the planning system. As is it is a p!sstake where planning permission is a speculative instrument rather than an intention.

Murph3000

It will be interesting to see effect of two more rate hikes on the market.

More interesting will be what happens if banks are forced to up their deposit rates and knock on effects on mortgage markets. I am hearing more and more people moving money out of Irish banks to try chase yields.

Murph3000

https://www.boards.ie/discussion/comment/120653700#Comment_120653700

Interesting, what actions have you taken on the back of your predictions, out of curiosity. Or are you just looking for points?

fliball123

https://www.boards.ie/discussion/comment/120655149#Comment_120655149

Your looking at this from the POV of the company if an asset is not used there is a tax someone somewhere has to pay if its not used, shell companies can transfer assets I am sure there would be a cost for doing this not to mention a tax. It needs to be done from the asset POV if someone has planning to build and the site is left vacant each year its not built on tax needs to be paid on it by someone.

PommieBast

https://www.boards.ie/discussion/comment/120655168#Comment_120655168

I mean something a bit more brutal - if planning permission is given on a site and no significant works are done within a fixed period of time, then the planning permission is lost outright. Merely taxing unused permissions does not break them as an asset.