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

hometruths · 02-06-2023 8:28am

I'm very supportive of the zoned land tax as mentioned above, without any wriggle room for developers, but this caught my eye in the IT

Wicklow County Council has refused planning permission for 98 houses near Greystones on residentially zoned land, on the basis that the town has already reached its population target for 2028.

The decision could have far-reaching implications – including an effective ban on new planning permissions in the Greystones–Delgany area for the next five years.

I think that is a decent decision by the council, but how would it effect the tax liability?

As much as I think the construction industry is prone to utter BS with their poor mouth lobbying, I'd have some sympathy for the argument that it is unfair to expect them to pay tax for not developing land if they are unable to get planning on that land.

awec · 02-06-2023 11:34am

https://www.rte.ie/news/business/2023/0602/1386959-demand-for-new-build-homes-up-114-daft-report-shows/

RTE are running this story that cites some Daft report, but I cannot for the life of me find any reference to it on Daft. It's not on their list of reports.

Trying to see if they share the underlying data in the report.

Anyone know where to look or found it already? Do Daft give the media a head start on their reports before releasing them publicly?

hometruths · 02-06-2023 1:25pm

https://www.boards.ie/discussion/comment/120669627#Comment_120669627

I also tried to find the report without success.

It's a good example of how the housing narrative in Ireland works.

Daft releases a hard to find report claiming their figures show demand is up by 114%. Or up by 1783% in the 400 - 500k new homes bracket.

Cue lots of fearmongering headlines and reactionary cries that this is evidence we need to build 50k homes a year etc etc.

Presumably if daft's figures are an accurate reflection of increased demand we'll see a similiar jump in mortgage approvals.

I doubt it though.

DownByTheGarden · 02-06-2023 1:34pm

https://www.boards.ie/discussion/comment/120670110#Comment_120670110

I dont put much stock in Dafts reports at all. Asking prices are nothing to start trying to gauge a market off of. And neither is the amount or type of searches done. People search for property all the time in all sorts of areas and types, without any intention to buy what they are searching.

Collection of searches and asking prices are not dependable data to be basing any sort of report off of unless it is a report about the number of searches only. A search does not equal demand.

Its just Daft trying to stay relevant because they are falling out of favour with people both advertising and looking for rentals.

The dwindling supply of second hand houses wont help them either.

Blut2 · 02-06-2023 1:37pm

https://www.boards.ie/discussion/comment/120667020#Comment_120667020

They absolutely should have borrowed to invest in infrastructure/housing when interest rates were that low, but the FG&FF governments of the time made a deliberate decision not to. Their main priority was stabilizing and then increasing house prices, so they consciously decided not to engage in large scale housing construction.

Its very, very different now, with housing the number one issue for voters in the country. No political party in the state over the next 5+ years is going to de-prioritize housing, because it would result in electoral annihilation. Even FG, our most economically right-wing party, is trying to talk up how many social housing units they're getting built per year, and how rapidly that number is increasing, now.

Theres just no plausible scenario for the next few years whereby developers not building would result in widescale unemployed construction workers and a shutdown of housing construction. Regardless of who we have in power (though it will most likely be SF soon) the state is going to utilise any spare capacity they can find pretty much instantly. Partially because the funds are there, partially for ideological reasons (if SF), but mostly for pure vote winning.

Sierra Oscar · 02-06-2023 1:38pm

https://www.boards.ie/discussion/comment/120669627#Comment_120669627

They issue a press release under embargo to the media first with the report being published on their own website thereafter, but usually pretty quickly. I'd say someone has forgotten to upload it to the website. Either that or a reporter broke the embargo.

PommieBast · 02-06-2023 2:31pm

https://www.boards.ie/discussion/comment/120668608#Comment_120668608

I seriously thought it was gonna be FF+SF last time and that MM would get the chop to enable it. Anyway back on topic....

DataDude · 02-06-2023 2:52pm

US and Aus house prices seem to be back on the rise after some fairly chunky falls last year/early this year. They are much further down the track of higher mortgage rates. Quite surprising, especially as both had much bigger increases in COVID times due to looser lending policies than here.

https://www.news.com.au/finance/real-estate/interest-rate-rises-fail-to-curb-rising-house-prices/news-story/ace0ff729e51c7a487e7cecae8ab596d?amp

https://www.bankrate.com/real-estate/housing-prices-falling-across-country/

DownByTheGarden · 02-06-2023 3:06pm

https://www.boards.ie/discussion/comment/120670398#Comment_120670398

FF would be finished for good if they teamed up with SF though. So it would be their very last go at the top table if they went for that.

I know quite a few die hard FF supporters and they will never be turned, apart from if FF went into power with SF.

wassie · 02-06-2023 3:25pm

https://www.boards.ie/discussion/comment/120670480#Comment_120670480

Im not as well versed in the US market given they operate a fixed-rate mortgage system, except it seems to disincentivises homeowners from moving house as they would have shift onto a higher new fixed rate loan, the net result is people stay put on their existing 30 year fixed rate and supply reduces accordingly.

But in Australia the drivers in the recent growth surge are similar in some respects to ours - very strong population growth underpinned by immigration driving demand combined with low supply.

I think it will be short lived however. They are facing a fixed rate cliff edge as nearly 1 in 5 loans (estimated at nealy 900,000) will come off fixed rates across this year so the full effect of rate rises hasnt yet been felt.

DataDude · 02-06-2023 3:30pm

https://www.boards.ie/discussion/comment/120670611#Comment_120670611

Interesting - not that familiar with Aus market but thinking about Ireland I don’t see ‘rolling off fixed rates’ as that big a deal.

Anyone rolling off bought 3-5 years ago so has on average seen 15-20% wage growth since then and have a house that’s worth 30-40% more. So there won’t be widespread defaults or people throwing back the keys? Repayments will remain very affordable for people.

Maybe different in Aus if people borrow much higher amounts relative to income to begin with?

wassie · 02-06-2023 3:41pm

Definately, especially those who bought in the last couple of years in Aus. Its been noted that not only have they bought at the top of the market, they are also more likely to have LTI of 6x or greater on their borrowings.

The mortgage controls here in this country I think should be given a lot more credit for keeping house prices from going even higher than what they have. I think we have already seen the bounce in the FHB market since LTIs were increased to 4x.

A lot of FHBs over there are facing "mortgage prison" and unable to refinance as the roll of ultra cheap fixed rates due to not having enough equity.

https://au.news.yahoo.com/interest-rate-buffer-intact-despite-024516149.html

As much as I don't like to say it, at least their banks can repossess defaulters....

DataDude · 02-06-2023 3:47pm

https://www.boards.ie/discussion/comment/120670665#Comment_120670665

6x income. Yikes. How would you sleep at night!

Ozark707 · 02-06-2023 3:56pm

https://www.boards.ie/discussion/comment/120670480#Comment_120670480

Those are MoM increases, associated with the 'Spring' selling season. YoY decreases are increasing due to the fact the MoM increases last year in Spring were higher than this year. The 30yr rate also hitting levels seen back in November so I suspect these rises will be short lived.

Meanwhile in the UK...

https://www.telegraph.co.uk/property/house-prices/house-prices-fall-buyers-high-mortgages-interest-rates/

Villa05 · 02-06-2023 4:18pm

Sunny bank holiday weekend seemed a good time for this revision/press release

http://www.rte.ie/news/business/2023/0602/1387089-cso-economy-figures/

hometruths · 02-06-2023 4:28pm

https://www.boards.ie/discussion/comment/120670665#Comment_120670665

There are just over 106,000 PDH mortgages here in "mortgage prison", in that they are in arrears or they have restructured arrears. That's almost 15% of all outstanding PDH mortgages - 712,000.

These mortgage holders not only cannot refinance if they wished to, but the vast majority cannot trade up or down either. So they are stuck where they are.

This is the principle cause of the second hand market being clogged up, but it has knock on effects that those people not in mortgage prison who would ordinarily buy and sell in the second hand market cannot do so either. This is why turnover of existing stock has been at historic lows for almost a decade.

Every year this continues is a greater build up of pent up supply. Sooner or later, admittedly probably later, that pent up supply will be released. But when it does I think people will get an enormous shock of how quickly we can move from a position of crisis shortage of housing to oversupply of housing.

All the talk and focus is on the lack of supply in the new build market.

I really think some of that talk and focus needs to shift to the problem of lack of turnover in the second hand market.

Blut2 · 02-06-2023 4:54pm

https://www.boards.ie/discussion/comment/120670625#Comment_120670625

The debt to income ratio allowed on Australian mortgages goes up to 9, its much higher than here. And much riskier for fallout from interest rate increases as a result.

JohnnyChimpo · 03-06-2023 10:04am

https://twitter.com/KevDoyle_Indo/status/1664897242271035393?t=kuWqoz2el0zBOT-YsIdVOg&s=19

The shakedown laid out clearly for all to see here

ButtersSuki · 03-06-2023 10:19am

https://www.boards.ie/discussion/comment/120672825#Comment_120672825

Is there a non-paywall version of this article?

Dav010 · 03-06-2023 10:43am

https://www.boards.ie/discussion/comment/120672851#Comment_120672851

Copy and paste any news article behind a paywall onto the site, if it isn’t archived by someone else already, it only takes a minute or two to get around the paywall.

https://archive.ph/tSz6M

hometruths · 03-06-2023 11:24am

WCC's refusal for further planning for Cairn because Greystones is full is causing plenty of comment. IT reporting today that builders are saying it has national implications as other areas will also hit targets early.

Local councillor Derek Mitchell said the problem goes back to the method used to calculate the number of new homes needed to house the proposed population of Greystones/Delgany. He said there was an assumption that the number of people in each new home was 2.19, later amended to 2.5 people per house and this dictated the amount of houses needed, and the amount of land to be rezoned. But census figures showed a higher number of people per household at 2.79 people, he said, and so the population targets were reached before the anticipated number of new homes. He estimated the overall discrepancy at about 10 per cent.

This is significant because a lot of our housing demand projections are based on the assumption that we will be converging towards the European average household size of approx 2.2 - eg Ronan Lyons at 60k a year.

But the reason the Euro average is so much smaller is because they have a much higher proportion of their housing stock as 1/2 bed apartments.

Either the demand is for smaller household sizes and we need to adjust our type of building supply,

Or the demand is for larger households and we need to adjust our demand projections.

It doesn't make any sense to fulfil a demand for household size of 2.2 by building 3 bed semis.

The Greystones situation is a good example of why.

https://www.irishtimes.com/ireland/housing-planning/2023/06/02/greystones-planning-decision-has-national-implications-say-home-builders/

BlueSkyDreams · 03-06-2023 12:53pm

https://www.boards.ie/discussion/comment/120670159#Comment_120670159

Councils building nothing but social homes isnt going to solve our problems though.

Its homes for people on average salaries and above that are needed also (and should be prioritised), but the govt doesnt seem interested in that group.

Lets hope the private developers keep building so there is at least some new stock comimg online for people that work on median or average salaries.

BlueSkyDreams · 03-06-2023 12:59pm

https://www.boards.ie/discussion/comment/120672993#Comment_120672993

I was thinking the same in that this scenario can't be unique to Greystones.

Surely all objectors need to do now is dig out their local area plans and quote the population target for 2028.

I am sure there will be other towns or districts of cities that have already hit their number and even if they haven't, you could effectivley cap the number of new units that can be approved over the next 5 years, to ensure you stay under the population limits.

This ruling looks like gold dust to Nimby residents and councils.

Blut2 · 03-06-2023 3:43pm

https://www.boards.ie/discussion/comment/120673168#Comment_120673168

There are close to 80,000 households on HAP currently, costing the state over €1bn a year. Its both a colossal waste of money and a huge factor in the private rental sector being so over capacity currently.

Getting those households off of HAP, and into social housing, both saves the government money and helps create capacity in the private housing market. It should have been done years ago, but wasn't for ideological reasons.

suvigirl · 03-06-2023 4:26pm

https://www.boards.ie/discussion/comment/120673168#Comment_120673168

It'll stop them buying the private homes and pushing up the prices, leaving private homes to be bought by private buyers.

BlueSkyDreams · 03-06-2023 6:25pm

https://www.boards.ie/discussion/comment/120673711#Comment_120673711

I agree with the principal of moving HAP tenants to social housing, but i dont think its ever going to happen.

It would look poor from the govts perspective to shoehorn HAP tenants into exclusivley social housing estates.

And what if the tenants refused to move?

You cant disband HAP because there arent enough social homes to move the tenants into anyway, even if they did agree to transfer.

Therefore, the transition would have to be done on a phased & optional basis.

i think the other problem is that creating 100% social housing just leads to Ballymun type estates.

Councils should build socially mixed develepments.

Some cost rental homes, some shared ownership homes, some 100% ownership homes, some fully council rented homes etc.

So we get a mixed and diverse group of residents from different economic stratas.

That way, we can part the waves between social and private housing, as you say, but without ghettoising social housing estates in the process.

There is a preconception that social housing has to be for poor people.

But we are all paying for social housing via our taxes and it should be available to everyone.

The council should enable mixed social developments, in the same way it forces private developers to.

I guess the problem is that the councils are obsessed with clearing a "social housing list."

And only the low income folks ever get on that list.

We are doing it all wrong. Everyone that wants to be should be on that list, regardless of income and wealth.

Private rents and house prices would fall as a result of creating mixed council developments...which I think is great, but is probably the same reason why the govt will never take my approach!

BlueSkyDreams · 03-06-2023 6:28pm

https://www.boards.ie/discussion/comment/120673959#Comment_120673959

Yes but shoving all HAP tenants into social housing is bad for society.

Councils shouldnt be interfering with the private market, i agree. But they should also be building houses for everyone, not just those on low and no income.

That way, we wont end up with expensive ghettos full of low income households.

suvigirl · 03-06-2023 6:31pm

https://www.boards.ie/discussion/comment/120674457#Comment_120674457

Yes they should be building affordable housing absolutely, but right now, in the short term they need to build social housing. Not all social housing ends up as ghettos!

A year or two building, taking social tenants out of private housing, then bang onto affordable and mixed housing estates, which is where I would like to see us end up.

Blut2 · 03-06-2023 6:40pm

https://www.boards.ie/discussion/comment/120674449#Comment_120674449

?

To qualify for HAP you literally need to have applied to, and be on, the social housing list. HAP tenants are regularly, in large numbers, moved to social housing.

Social housing should absolutely be available for everyone, that system works very well in places like Vienna or Singapore. Much better than the private sector dominated rental market in most of the Anglosphere. But when theres a very limited amount of it (as in Ireland at present) then priority has to be given to those who need it the most (and who're already costing the state a fortune in HAP) - the poorest.

J_1980 · 03-06-2023 6:48pm

https://www.boards.ie/discussion/comment/120673711#Comment_120673711

Government get 50% back with tax on landlords. It’s far cheaper than financing and maintenance on social houses…..

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

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