Softening house market?

Not quite. Everyone forgets that many businesses availed of massively generous supports. They remember PUP but not the wage subsidy because those people kept getting paid as normal.

At that point in time, nobody knew how the pandemic would progress.

No. You don't include your "required margin" as an expense. Not sure why you are bothering with your attempted strawman. It's very childish.

Also if you include the actual costs of outsourcing everything, including the risk, then you actually have no justification for demanding any profit.

If I want to own a restaurant and then I include as my costs the cost of financing 100% the building and capital (in which case the bank is taking all the risk there), and also include the cost to have all the management outsourced, then what am I bringing to the table to demand an additional "required return"? Even if I do manage to get away with demanding a "required return", it doesn't go into my projected costs. I put in my costs and my income and then I have profit and I compare that profit to my required return to see whether I will proceed.

If I decide to finance and manage it myself and pay myself a salary 200k to manage the restaurant, and calculate 100k a year for my pocket as compensation for the capital I put in, then why am I adding an extra 15% as a "required return" to my "costs"? That's not part of my costs. My salary is. My charge for the capital is. My "profit" isn't a cost.

Feel free to try it out with Revenue though. If they come telling you that you owe tax on profits of 100k in your business, you can tell them no, that you actually made a loss of 100k because they didn't take into account your required margin of 200k as an expense 😉

The cost of capital you refer to is the interest on debt finance. There is also a cost of the equity finance which the margin reflects. Their business is funded by a combination of debt and equity. Equity shareholders need to get a return otherwise whats the point of investing. If you expect businesses to run with zero return to equity shareholders then no businesses would be started.

What is the ber, I can't see it on the listing

So you are saying that Cairns a PLC quoted company on the Irish stock exchange is fiddling it's accounts.

You are away with the fairies. You are waffling again. Anybody working in a publicly quoted company is paid a wage whether it's a the photo copier assistant or the chief financial officer.

It's profits have to be verified by auditors who you say are allowing the accounts to be fiddled. It's yield on it's shares are about 6%. It's has 650 million tied up in sites and 300 million in ongoing building work.

It gross margin is 21% and net margin is 15%. It's actual share value is less than 50% of its 2017 price so investors are not exactly rushing to hold the shares of this so called highly profitable company

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.