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

Villa05

https://www.boards.ie/discussion/comment/121712202#Comment_121712202

Get apprentices in at 16, 17 like it used to be and start them on the minimum wage

Too many in school at that age that do not want to be there, give them an outlet other than crime.

Been done in Germany for years

Donald Trump

https://www.boards.ie/discussion/comment/121712087#Comment_121712087

You might not have heard about it, as it was kept fairly quiet and secretive at the time, but the State actually set up an agency to deal with the fallout from developers defaulting on loans. They called it NAMA.

Donald Trump

https://www.boards.ie/discussion/comment/121715535#Comment_121715535

I don't necessarily think that apprenticeships should be paid a lot more. They are training. It isn't comparable to a menial minimum-wage-type-job scenario. A more accurate analogy of a first year apprentice might be someone doing a one-year cert at the local regional college.

The issue you will have now with apprenticeships is that someone going into the building as a worker will need to accept that they will quite possibly never be able to afford the houses they are building because the market is so limited that you can only really compete by getting in to the top tier of earners.

Villa05

https://www.boards.ie/discussion/comment/121712026#Comment_121712026

Why would you price an item at a level that people can't afford? it makes no business sense?

It makes sense if your representatives are constantly lobbying Government and dictating policy and you know that there are massive subsidies from the taxpayer incoming to prop up prices

25 to 30% of housing output are one off homes in rural locations. If one can build 6,000 one off homes in isolated locations, could you double that by building terraced or semi d's in central locations

Greater supply and I suspect greater profit for the builder plus significant competition for the large developers

Blut2

https://www.boards.ie/discussion/comment/121712202#Comment_121712202

You've ignored the question again I see. Is that because you can't answer it?

New grads in my company currently earn about 35k a year. I would entirely support them getting a pay bump to 40k a year, and wouldn't care if it had no impact on my wage. They need the money far more than me. Thats how most human beings with empathy work.

Qualified tradesmen would absolutely support apprentices getting paid at least the minimum wage even if it made no impact to their own wage. Because 1) it would make their jobs easier (more and better quality apprentices) and 2) because its the right thing to do.

Its absolutely insane that you think someone should work 40hrs a week for 286euro a week.

The Student

https://www.boards.ie/discussion/comment/121715847#Comment_121715847

New grads are being offered what they are for business reasons nothing more nothing less. Who pays for increases in costs to a business? Somebody has to pay for it so who do you suggest does? Perhaps you should lead by example and take a pay cut to fund a pay increase for the low paid you reference.

You have claimed qualified trades people and you would have no problem with increasing pay to those on lower pay and I have asked you to give actual examples of this.

Strawman polls are irrelevant to this discussion can you provide an example in the public domain where the above happened?

The Student

https://www.boards.ie/discussion/comment/121715683#Comment_121715683

Ask yourself a question as a politician if I listen to developer lobbyists how many votes are in it for me to get elected compared to those who are desperate to purchase a property.

Logic would suggest the latter would be the better option for the politician as they want to be elected.

Add to the above if a politician can deliver housing without subsidies it then leaves more taxpayers money available for other causes.

A politician who could deliver both of the above would be voted into power overnight.

I am looking at this based on common sense it makes no sense for the State not to make home ownership better at the cheapest price possible for all both the purchaser and the taxpayer in general.

The Student

https://www.boards.ie/discussion/comment/121715591#Comment_121715591

You might then fully understand how NAMA worked. NAMA enforced significant "haircuts" on the loans they took over. NAMA actually made a profit but don't let facts distort your argument.

I suspect you are referencing the bank bailouts which the State needed to keep the banks liquid. This was needed to have a functioning day to day banking system. You know the one you get your wages paid to, the one that processes direct debits, the one that processes credit/debit card trans etc.

Villa05

https://www.boards.ie/discussion/comment/121716269#Comment_121716269

Your living in a logical sensible bubble. The property market in Ireland has not been in such a state for as long as I can remember, close to 3 decades.

Political parties have traditionally been heavily backed financially by developers. All the key sectors in property development, finance, and investment funds have ex FFG politicians as there lobbyists.

The sector has effectively returned to what resembles a pyramid scheme as more and more tax payers money is looted to give to tax payers to afford accommodation. The more that's looted the more price increases and the more taxpayers money needs to be taken

The political rational for this is the illusion that the government is helping you to get a home. The more they "help" the more price increases so those that purchased in the past get the "feel good factor". The key to keeping this going is to get the Critical mass in home ownership which gets more and more expensive with this approach and will most likely lead to an economic crash

You mentioned in another post that developers need to be compensated for risk in the event of land prices falling. With the approach above that risk is much greater and when land prices are rising the developer is more likely to hoarde rather than build as in the last 6/7 years.

The system is broken, a new approach is needed

Blut2

https://www.boards.ie/discussion/comment/121716222#Comment_121716222

By that logic then why do we have a minimum wage for any job? Why do retail workers get paid €508 a week? Why do McDonalds workers get paid €508 week? How does that not break those businesses?

Theres absolutely nothing to suggest that paying 1st & 2nd year apprentices at least minimum wage would add substantially to the costs on something as expensive as housing. Apprentice wages do not make up a significant amount of the cost of an average €400k house.

Heres the main union for construction workers in Ireland literally calling for an increase to apprentices wages. Note, not an industry wide pay increase (as you suggested had to be linked), but only one for apprentices:

https://www.irishtimes.com/ireland/2022/12/01/starting-pay-well-below-minimum-wages-is-turning-people-off-apprenticeships-union-warns/

You've avoided my question again I'll also note. Do you think someone should work 40hrs a week for 286euro a week?

And I'll add to it - do you think its good for the country, and our housing market, that we have a chronic shortage of tradesmen, because too few young people are going into it? Because that €286 a week is a massive part of that.

Donald Trump

https://www.boards.ie/discussion/comment/121716306#Comment_121716306

I would suggest that you don't give up the day job.

Here's some homework for the weekend. See if you can answer these questions, and then tie them together at the end:

1) Why was there a need to create a "bad bank" (i.e. NAMA) for developer loans?

2) Given that you mention haircuts, can you think of any reasons why the banks might have been willing to sell certain loans at a hefty discount to the par value?

3) Can you think of any possible link between having to sell said loans at such a discount (hint ... "loss") and the need for banks to get "bailouts"?

Bass Reeves

https://www.boards.ie/discussion/comment/121710774#Comment_121710774

Grand in theory, however the employer employing an apprentice pays him there rates for four year. He pays them during there block release terms, 9 months in four years, he pays them for 20 days holidays and 11 bank holidays every year. That nearly another 6 months in a four year period. So for employing an apprentice for 4 years an employer has them.working for 2 years and 9 months in that four year period.

The problem lies in its seen now as a right of passage to go to college for a year or two whether you are really interested in it or not. So by the time you are 20/21 you instead of having completed half your apprentice people have wasted two years partying at college

It would not take much for employers to stop taking on aprentices and only employ fully competent skills.

An employer only breaks even with an apprentice in the last year

Padre_Pio

https://www.boards.ie/discussion/comment/121716685#Comment_121716685

The 508 a week is for employees 20 and over. I would also counter that a Mcdonalds employee is probably fairly well trained in the job after a month, and his value to McDonalds is greater than the wage they pay him.

Compare that to an apprentice. How much time must an employer invest in training an apprentice, vs the value they get from that apprentice. The answer is very little, especially with block release. That's why the pay isnt great in the first year, but it's pretty good by year 3.

Timing belt

https://www.boards.ie/discussion/comment/121716688#Comment_121716688

Maybe look up capital costs to a bank and do some homework yourself.

banks lent heavily to developers for profit with most banks having a dedicated team to wipe the developers arse just to get business and didn’t care what risks were attached.

if banks didn’t sell impaired loans at a discount they would have needed more expensive capital to stop going bankrupt….They actually saved money by selling at a discount and before you say the loss hadn’t crystallised it is irrelevant as banking regs require the capital which at the time was a much bigger bank bailout or the bank going bankrupt.

Donald Trump

https://www.boards.ie/discussion/comment/121718031#Comment_121718031

Perhaps read the posts before you go off on an uninformed rant. Other poster's position is that the developers did not have any significant contribution towards the banking crisis.

I'd find it very strange that you appear to agree with them on that point.

If you want to talk about Basel rules and pillars, I can do that all night. But it has nothing got to do with the posters assertion. So perhaps start another thread on it?

Donald Trump

@Timing belt @The Student

Here you go, seeing as you both seem to be of the opinion that developers didn't cause anything.

https://www.ft.com/content/7d509be4-1220-11e2-868d-00144feabdc0

In case you need a subscription and don't have one, here is a sample paragraph:

During the Celtic Tiger boom, 772 developers borrowed €74bn from the main Irish banks, which they ploughed into speculative property investments in Ireland, the UK and beyond. When the property bubble burst and prices slumped by up to 70 per cent in Ireland most developers were left hopelessly indebted and Dublin was forced to rescue its main Irish banks at a cost of €64bn.

It goes on to give a list of some of the highest profile bankruptcies and how indebted they were at the time

Blut2

https://www.boards.ie/discussion/comment/121717654#Comment_121717654

You're listing 20 days holidays and 11 bank holidays a year as if they don't apply to every single other worker in the country.

Going to college for a year or two and dropping out isn't whats taking most of the lads who would otherwise have become apprentices. We don't have significantly higher numbers of college dropouts now than we did 20 years ago. Its the fact they can earn more, doing easier jobs, in other industries.

I seriously doubt that an employer only breaks even on an apprentice by their 4th year, given their low salaries. Source?

https://www.boards.ie/discussion/comment/121717762#Comment_121717762

Do you think an untrained labourer adds more value to a construction site than a second year apprentice? Because they earn well above minimum wage.

There are plenty of other industries where it takes long periods of time to reach fully trained (and value adding) status. And where your employer will pay you while getting further education. But they all get paid while doing so, well above minimum wage in many cases.

Timing belt

https://www.boards.ie/discussion/comment/121718171#Comment_121718171

I answered your 3 questions so what was your point of asking them

Donald Trump

https://www.boards.ie/discussion/comment/121719577#Comment_121719577

I wasn't asking you to answer the questions. They were somewhat rhetorical questions directed towards another poster who claimed that it was individual loans that caused the issues - and they didn't appear to understand any connection between problems with developer loans and the necessity for bailouts.

While there was clearly blame amongst many participants - not least major supervisory failure - it would be silly to defend the developers as blameless.

The Student

https://www.boards.ie/discussion/comment/121716685#Comment_121716685

The law for current trades people apprentices is as is and falls outside the min pay set by law. You will note the hourly rate is set as a % of those qualified in the same trade.

You appear to think I said a particular rate was good or bad (you might show me exactly where I posted that ascertain).

Pay is set at the rate of the market if the pay is not attractive then get employment in a sector that pays you what you want. Eventually market forces will either force apprentice rates up or people simply won't enter the trade.

Whether you want to accept the concept being a developer is a business transaction pure and simple. If you increase costs in any business someone has to finance those increased costs.

The Student

https://www.boards.ie/discussion/comment/121718265#Comment_121718265

Where did I say developers were solely responsible for bankrupting the country? They played a part but were not solely responsible.

The bailout funds were used to acquire shares in the main banks in exchange for the bailout.

Banks share price took a severe hammering and alot of people lost life savings they invested in these shares.

Donald Trump

https://www.boards.ie/discussion/comment/121720688#Comment_121720688

You said:

Developers did not bankrupt the country as has already been suggested to you.

Read the link to the FT article.

Padre_Pio

https://www.boards.ie/discussion/comment/121719505#Comment_121719505

" Do you think an untrained labourer adds more value to a construction site than a second year apprentice? Because they earn well above minimum wage."

Yes I do.

Blut2

https://www.boards.ie/discussion/comment/121720648#Comment_121720648

You've made multiple posts attempting to justify the current state of affairs, and current pay rate for apprentices. Which would suggest you very obviously think the current rate is 'good'.

"if the pay is not attractive then get employment in a sector that pays you what you want."

Are you being intentionally dense? This is literally the entire exact problem that I brought up in my initial post on the subject. People aren't becoming apprentices in high enough numbers, largely because the pay isn't high enough. Which is why we need to raise apprentice wages. So that we can recruit more of them.

Its really not rocket science.

Bass Reeves

https://www.boards.ie/discussion/comment/121719505#Comment_121719505

Yes holidays and B/H's apply to all staff, however apprenticeship spend nearly another 20% of there Time on block release. The employerhas to co er this cost.

A student in college is not only paying fees to attend but most are working part-time adding 10-20 hours to there college week. Apprentices are paid from day one. there rates are linked to the craft rate.

Y1= 33%

Y2=50%

Y3=75%

Y4=90%

Taking the block release period into account the rates are fair IMO.

On the labourer. A labourer is working g from day one they have no block release except for statutory H&S training ( safe pass) which most will have to have completed before they are employed

The Student

https://www.boards.ie/discussion/comment/121721597#Comment_121721597

You don't appear to understand how business works. If pay is not enough people won't go into the industry, developers can't develop so they make no money.

Yet again you are interpreting something that I have not even said. Try actually reading my posts rather than seeing something I did not post.

Solution - increase wages to attract more into sector. It's the developers who need to realise this is simple supply and demand remember economics 101.

On a final note if you want to personalise comments bring it on.

Blut2

https://www.boards.ie/discussion/comment/121721964#Comment_121721964

So you do in fact agree that we need to increase apprentice wages to attract more into the industry then. Thats a complete 180 from your initial posts. Its good to hear you've admitted the error of your ways.

https://www.boards.ie/discussion/comment/121721956#Comment_121721956

A completely untrained labourer on day 1 is adding far less value to a building site than a mid-year 2 apprentice, yet gets paid far more per hour. Anyone whos ever worked on a building site would tell you that.

Most white collar workers regularly attend professional training, up to and including entire academic years away from the work place, on their employer's dime. An MBA for example is almost always employer funded, to the tune of €40k+ fees and an entire year away from the work place.

Paying for employee training is completely normal and good business sense, which is why its so common.

I note you've not given any source for your dubious claim that "an employer only breaks even on an apprentice by their 4th year". Presumably that means you have none?

Villa05

China starting to look like Ireland in 08

https://twitter.com/KobeissiLetter/status/1754488591856652291?t=bBcqXKrW847pHAsyWQ5M-w&s=19

Villa05

There are multiple issues in the drop in numbers taking up apprenticeships paticularly in construction sector

1 poor employment terms and conditions throughout your career

2 we are fast approaching the most of the sale price of a home going to people who never got there hands dirty on site

3 Traditionally a sector that have little regard for customers, does not attract employees

4 Better pay and conditions in MNC at starter level, progression opportunities are greater within and funded by company in many cases. Many MNC are snapping up apprentices as there skills are heavily sought after

Again we need to get kids disillusioned with the academic system into this pathway as early as possible. The skills they obtain will always be in demand, be it in construction or elsewhere

hometruths

https://www.boards.ie/discussion/comment/121716427#Comment_121716427

The sector has effectively returned to what resembles a pyramid scheme as more and more tax payers money is looted to give to tax payers to afford accommodation. The more that's looted the more price increases and the more taxpayers money needs to be taken

The political rational for this is the illusion that the government is helping you to get a home. The more they "help" the more price increases so those that purchased in the past get the "feel good factor"

Nail on the head. And now we've reached the stage that the first featured property on myhome.ie homepage is not using a picture of the house to grab your attention, but a graphic highlighting how the taxpayer helped out their fellow taxpayers Max and Andrea by funding 25% of their house purchase price.

Have we jumped the shark?