House Prices

Huge hikes in property prices started back in the 2000's after the government introduced the Part 5 regulations. Any politician who thought that the developer wouldn't pass that cost on to private buyers was deluded.

Getting an extension is going the same way. Something you would build for €30k between yourself and a few tradesmen only 10 or 15 years ago will now cost you €150k due to all the regulations and hoops that exist now.

I had a discussion recently with a guy whose business is buying and renovating derelict housing. I asked him what the difference was between now and the Celtic Tiger era when prices were similar. He said back then the margins for developers were absolutely huge - basically it was just inflated cheap credit from people getting mortgages that were far too big and a huge chunk of that was passing straight through to the developers. This time out, due to a combination of the increased regulations and, more recently, a massive increase in building material costs, more and more of that money is going into the actual property. That also means that the floor price for a property is a lot higher. He was saying that he buys derelict houses because he can get them for cheaper than it would be for him to build them nowadays (even after he renovates them).

we clearly need to maintain high insulation standards, but have no other choice but to increase state interventions and involvement into the market, the so called free market has completely failed, and is now in a state of collapse, in providing this critical need

Thickness of insulation should have been determined at an early stage as part of the overall design of the house, along with initial BER. I assume it was a block built house?

There are a number of different issues mentioned above

Firstly, requiring houses to be built to a high standard is not really a problem, standards should be high. Basically every unit built before 2000 (and plenty built since then) needs a substantial and expensive upgrade.

At least new houses can somewhat justify their price tag given the standard they are built to, a bigger problem is that the price of old stock is pegged to new stock with little justification for it. Particularly in Dublin, poor quality older units are too expensive as they usually require a lot of work.

There needs to be greater tax on property value appreciation with the ability to offset the cost of works done which contributed to theat value appreciation. If all the empty nesters were going to be hit with bigger tax on their own stupidly valuable yet draughty old house, they could take a lower price to reduce the tax burden, or do the place up to offset the tax - either way it is a benefit for the next generation of owners who are expected to pay sky-high prices for even houses requiring substantial works.

A big contributor to the cost of new housing which should be easily reigned in is land. There are lots of people out there sitting on prime, zoned residential land but either haven't the ability to develop it, want to sell but only for a ridiculous price, or both. There should be some mechanisms in place to get them to develop themselves, or if they can't do that, sell to someone who will. Taxing undeveloped zoned lands will help but they also have to look at dampening down the speculative value put on land. Speculation will keep pushing prices up until people start overpaying but nobody knows they have overpaid until its too late. Not having to pay huge amounts upfront just for land would take a lot of risk out of it for developers, particularly small local developers.

Nobody really knows. I asked that developer that I mentioned in an earlier post if now was a good time to buy and, of course, he said yes.

Short of a full scale recession that severely reduces people's incomes and savings, it's difficult to see prices coming down too much, given the severe lack of units out there right now. Only if all of the institutional investors left the market, could I imagine a price crash and why would they when they are currently fleecing renters?

Current housing problem is entirely artificial & created by the government intentionally in order to create favourable conditions for the banks

*Mandatory A rating for new builds

*Requirement to use qualified tradesmen who are in short supply & can't be trained up quickly

*"Local needs" and other restrictions preventing an individual building on a piece of land

*Bedsit ban

*Allowing REITs to be a thing

*Kibosh on affordable modular homes/log cabins

*Zoning laws, height restrictions

*Completely overkill requirement for percolation area if not connected to a mains sewer

*Excessive fees for planning applications

All the above have been implemented by the government to make sure individuals have to cough up 300k + mortgage interest to have a place to live. This is great to recapitalise the banks and boot on the economy but it does mean everyone is being made a big eejit of by being forced to pay so much for a simple brick box with a very artificially inflated price.

I think I'll buy a fecking boat and live in that, only the government have their Waterways Ireland bullyboys out in force to prevent people using that escape route to get out of buying a 300k house

There were plenty of houses built before all those rules came in and they are perfectly fine and you have people queuing up to get a 30 year mortgage for them

No I am against the idea of paying hundreds of thousands. But standards are too high and labour too expensive all due to government regulation. There is also plenty of decent quality prefabricated stuff available that's artificially being held back through planning laws. If you are stuck for a place to live a substandard house is better than no house at all

We'll end up with tent cities and slums if the government keeps holding back construction in order to help out their bank buddies

Then buy in prefabricated ones from a place they can build them cheaper. Plonk 6 or 8 of them down on a 1 acre site and it could bring the cost to less than 100k per house. They might not be perfect houses but they'll get people out of a pinch

There are all sorts of prefabricated houses being built across the country and have been for two decades; from standard timber frame to SIPs to full modular units which are combined on site. If you think prefabricated houses are being "artificially being held back through planning laws" then you have absolutely no clue what you are talking about.

A lot of it appears to be for commercial / temporary dwelling / airBnB but I have yet to see or hear of someone buying a site and plonking one of these on it to live in. I wouldn't really count "timber frame" in the same category to be honest

They dont know any more than the man in the moon. Look at it this way. House prices are roughly the same now as they were over a decade and a half ago. If you had bought then at the price you are buying at now you would be over half way through your mortgage. Compare that situation to renting now and for the next 10 years and your mood will lift.

This will be the issue for builders going forward. I think normal ordinary punters will start putting off extensions, refurbs and such as they just can't afford it. Thus work will start drying up for some builders. Especially in rural locations.

With house prices also out of reach for a lot of people I think we are going to have another construction related crisis. Possibly not a crash of the levels we have experienced but not far off it. A correction is needed to some degree.