Softening house market?

You are starting to learn Bass. Almost there. Now answer this - How much return should you get on your equity if you have zero equity in?

Now the next question for you to work out is if builder Johnny claims to finance 100% of his project with debt, how much did he need to put in as equity?

Regardless, as I said to the other poster, you are free to explain to Revenue that you are putting your "expected margin" down as a cost if you want. See how they respond.

oh will i just ignore the parts that make no sense? be better Donald.

okey doke. None of your posts make any sense. And given we are now selectively quoting parts of sentences, I will ignore your scutter from now on

That's a bit silly. Your advice is that builders should never build because of risks involved in building. That would apply at any point in time and in any market.

No what several posters have pointed out to you is that builders will stop building if there is no possible margin.

Therefore there builders will continue to build of prices drop if the following happens,

Materials drop in price

Labour drops in price

Regulation/ planning/ development costs drop

They can replace the sites at a lower cost

Either of the above will allow them to continue to build. They will probably continue in existing sites however they will be reluctant to start the development of newer sites that they owner unless they are replacing them cheaper.

Every buisness works that way. My profit on an animal is not the cost over his purchase less the finishing costs, it's less the finishing costs and his replacement costs

In 2012 this country was f@@ked if you want to go back there you are welcome. In 2012 the government was trying to restart the economy and trying to balance the budget created by overspending on public services during the noughties and money it put in to save the banks.

It's had a legacy of unfinished sites and buildings. I do not think there was any substantial number of houses knocked as such. There may have been some shells of houses knocked ( I think there was an accidental death of a child in one such area) on partially completed sites

There is a group of sub ten houses near me being finished at present. I think the sit was bought from the bank in 2018 ish and has been 90% finished by a small builders who has been in no rush to complete with the way prices were rising.

Did I see a figure of 2k as the number of units actually knocked or about 2% of total stock by Nama and the banks at the time. Many forget that Nama only took over debts where the liability was over 20 million. These were the really big bigger projects.

Debts under this were handled by the banks. If I remember rightly the government was very slow on the idea of REITs, it was mainly the pushing of this agenda by ultra left SF, PBPand a few in labour like Roisin Shorthall.

There think that these REITs would compete with the smaller LL and you would have cheaper rentals. I explained this would not be the outcome but the posters now b!tching about REITs are of the same ilk and persuasion as those so gung-ho for them then.

Remember the trade unions, the charities, the political left all were telling us that these would provide cheap rental accomodation just like Germany, Scandinavian and other Continental countries. 😂😂😂😂😂 I still laugh at that.

Let me repeat it was the same type people b!tching about REITs now that wanted them whether politicians or posters on here.

The government fear of building social housing is having more Ballymuns, Moyrosses, Knocknahenies, the gettos in smaller urban centers. Even most social commentators up until lately were against large scale social housing projects. SF ( PBP ) etc are the only cohort pushing this longer-term .

I am not a fan of the idea myself

But you also won't include the price of buying and financing the land you already own in your expenses for rearing the animal. Nor will you include your required margin per animal as an expense either

The poster I responded to suggested that the builder should sell the sites for half their cost rather than build on them. They can do that. If they do though then another builder can buy them at the lower price and build on them.

When the Baron of Ballsbridge was spending 50m+ an acre and asking his missus to "pick a number" to decide how many millions to pay for a house, that is not a ratchet mechanism beyond which he must be protected from the price ever falling below that. Developers outbid each other for sites. If they foolishly pay too much, then they need to accept the consequences. What gives land its value is its zoning. It is usually not a unique feature of the land. That is given by society and should be transferrable to another site by society if it isn't used. It is ridiculous that the authorities would arbitrarily award such a gift to someone in order to allow them to provide houses as part of an implicit social contract, but then sit back and allow the builder to decide not to build until he can get his ransom. Just zone it back to GB and rezone the field beside it for residential instead. We'd see plenty of houses being built then!

Financing interest is tax deductible against income as are buying and selling ( solicitor auctioneer etc)costs, any capital investment, sheds housing etc as well as any land improvements are tax deductible similar to any other business.

Donald you are waffling as I posted in my last post stay away from farming you have not got a clue about it or any business it seems.

Oke Doke Bass. If you have your farm bought and paid for and you are doing up your accounts, you can try to claim that the land is worth 25k an acre and include an imaginary interest cost of 1,000 Euro an acre (4%) in your expenses for what you would pay on interest if you were to purchase it today. Come back to us and let us know how you get on with Revenue.

When was the last time you brought your car to a mechanic for a quote on how much it would cost to fix it and he gave you an estimate which included parts, labour, and the interest he would have to pay on a mortgage if he were to buy and finance his premises today?

Maybe you do get quotes like that.

Waffling again Donald away from the farming you have not got a clue.

No I could not but I could buy more land, and improve it. I be allowed to write down the interest on that loan and any improvement costs as well as any investments accross the rest of my farm.

As well if I had a job or another business if there was a loss I could write down that loss against PAYE income from either of them. Not only that I could structure capital allowances to make sure it was the higher rate of tax I was allowing against the depreciation

Or are you suggesting that Cairn are paying coupons on loans to certain investors similar to what used happen with Dr Sir or is it Sir Dr at Fitzwilton decades ago.

Interesting development in the UK that may have consequences for the Irish market:

https://www.bloomberg.com/news/articles/2022-10-18/property-funds-start-selling-assets-to-help-stricken-pensions

Property Funds Start Selling Assets to Help Stricken UK Pensions

• The CBRE UK Property PAIF plans to sell 1 Albemarle Street
• L&G and Abrdn funds also among those selling real estate

ByJack Sidders

18 October 2022 at 16:32 GMT+1

Real estate funds whose investors include UK pension schemes have begun offering properties for sale to meet redemption requests. 

The CBRE UK Property PAIF has appointed broker CBRE Group Inc. to sell 1 Albemarle Street in London’s West End, according to people with knowledge of the process. Legal & General Group Plc’s Industrial Property Investment fund is offering for sale warehouses at Trafford Park in the north-west of England, said separate people, who asked not to be identified as the process is private. A pooled pension property fund at Abrdn Plc is selling warehouses at the Thames Gateway Park in Dagenham, east London, other people said. 

The sales are the latest sign that the turmoil that has rocked the UK pension industry in recent weeks is still reverberating through financial markets. Pensions have been dumping stocks, bonds, collateralized-loan obligations, and pulling money from almost any fund that will give it back. 

Representatives for Abrdn, CBRE Global Investors and L&G declined to comment.

Many defined benefit pension schemes deployed so-called liability-driven investment strategies that enabled them to ramp up leverage and juice returns. The Bank of England was forced to step in to stabilize markets after rising gilt yields triggered margin calls at the funds that came too quickly for them to manage. 

The central bank intervention bought the pension funds extra time to increase their cash buffers. There are around 5,500 so-called defined benefit schemes in the UK, according to The Pensions Regulator, managing around £1.8 trillion. 

The 1 Albemarle Street property in London’s Mayfair district is among the top holdings in the CBRE fund and is valued at about £60 million to £70 million, according to a fund fact sheet. CBRE Investment Management, which manages the fund, deferred redemption payments earlier this month. The Thames Gateway warehouses are among the largest assets in the Abrdn fund. 

1). You decided to inject into the hypothetical scenario that the owner could sell the site for 50k.

2) Given that another person could purchase the site and make 50k on building and selling the house in the hypothetical scenario, do you think that a rational person will pay 50k for the site?

I mean it is very easy to refute any argument if we are allowed add in our own facts to "prove" something. You might as well have said that instead of building the house and making 50k, they should sell the site which cost 100k for a million quid

Apologies, I forgot that this mechanic received him MBA at the Bass school of business. His estimate of costs to fix your car will also include his "required return" along with the rates for his time, the parts, and the interest charge for his premises as if he was mortgaging it today.

That central bank rule was the only thing keeping house prices under control. Bloody dangerous clowns if they change it. Houses are just going to jump by thousands now.