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

So you're advocating the continuation of tax funded charities purchasinh housing stock adhocly on the open market from Global investment funds?

They are the government for all intensive purposes…the only reason they are structured like this is so that any debt they have is not consolidated into government debt.

Multiple polls with different results wheather ECB will increase rates in September.

The latest poll by Bloomberg shows Economists believe there will be an increase.

https://www.bloomberg.com/news/articles/2023-08-14/ecb-still-seen-delivering-one-last-hike-in-september-poll-shows#xj4y7vzkg

"Unmoved by recent signs that inflation pressure is abating, economists continue to predict that the European Central Bank will deliver one final increase in interest rates next month.

The deposit rate will be lifted to 4% in September from 3.75% now, a Bloomberg poll showed. At the same time, respondents reckon officials will start cutting borrowing costs in March"

It looks like most polls believe there will be one more increase by year end. Just arguing weather it will be in September or later.

well it’s better than them entering into long term leases that cost more and result in owning no asset at the end. I’m not advocating anything just expressing an opinion that it’s a step in the right direction if it means moving away from costly long term leases.

Are you advocating that housing charities should do Nothing or that we should stick with a policy of experience long term leases?

There’s a general consensus out there that we are building close to as much as we can with the labour we have. If you’ve tried to get a tradesperson in the last two years, it’s hard to disagree with that suggestion.

So by doing what you’re proposing, all you’re going to do is redirect resources from private building to public building. Less houses to buy/rent for those on middle incomes and above. More houses to give to unemployed/lower incomes.

Im not saying the above is inherently wrong or right, but I think it’s important to accept this is merely a redirection of capacity rather than creating additional capacity. ‘Just build more houses’ is over simplistic at the moment.

And as many have said, I would put a significant bet that this new state building company would build fewer houses and at a higher cost than the private sector. So it’s not even a 1:1 redirect.

If the private sector slows and workers start to lose jobs/emigrate like they did in 09, I would strongly support the state picking up the slack to ensure we keep on building instead of shipping our talent out to Australia. But that just isn’t the current situation we are in.

I would strongly support setting aside public funds to keep construction going if/when private sector runs cold. A counter cyclical measure of sorts.

It would be cheaper to build at that point in the cycle and would give crucial certainty to people considering trades that they won’t be hung out to dry when the economy turns. It’s exactly what we should have done in the last recession, but sadly when your country is broke and house prices are collapsing, it’s hard to get public support for spending money to keeping building more houses.

Most ideas of a state building company don't have it starting at full tilt tomorrow, sucking up labour from the private sector, as you're arguing against. Both because of the negative impact on the private sector and because of the logistical issues of scaling up such a large project. Its instead a medium/long term plan.

There are lots of relatively easy to do things - start making apprenticeships and the trades more attractive by offering higher salaries and guaranteed long term state contracts, start importing labour (and housing it in modular housing if need be) etc. Over a 5-10 year window they could achieve a lot.

Ideally we'd reach a scenario where the state would have say 10,000-30,000 permanent full time employees in construction who build housing units consistently, year after year, through both up and down turns.

And as you mention, if slack does emerge in the private sector, then suck up any spare capacity temporarily from there if practical.

I thought under EU legislation you really can’t have a state backed building company ? Due to competition laws

I see often here the assumption that tradesmen are hard to get.

I think work has slowed down for tradesmen. I see lots of them advertising or if anyone puts a small job on, no shortage of responses.

Are we really sure that we are short of tradesmen?

What kind of jobs people here found hard to get responses from a tradesmen? Small nixer like patching a tiny hole in the wall type of job?

One of the biggest issues I think we have is how we as a State view housing in all its forms.

The State can't manage its stock as non payment of rent, non payment of mortgages, anti social behaviour in social housing estates etc. People going on housing lists once they turn 18.

One of the reasons the AHB are gaining such prominence is they remove the State from housing people and they have to deal with delinquent tenants etc.

If we actually dealt with these issues some (not all) of the housing crisis would be reduced.

Offering higher salaries to apprentices would have a very marginal effect on driving up overall construction prices in the private sector. Apprentice salaries aren't a meaningful percentage of the overall cost of building a house.

The government will have built enough modular housing to house 2800 Ukrainians by the end of this year. The first modular homes came online in June, only 14 months after Ukrainians started arriving here. The cost of each unit is working out to approx €145k. They're not difficult, time-consuming, or expensive, to build, when the political will is there, it turns out. If we built modular housing to house imported construction labour at a similar rate within three years we could have circa 5000 imported workers housed, and working for the state.

Both are very much relatively easy in the context of the worst housing crisis in the history of the Irish state. Neither would require massive amounts of funding, and neither would negatively impact the lives of Irish people (ie voters).

Was it even on the open market

"If there were other bidders, why is a state backed housing agency spending 72m to outbid private investors buying fully tenanted blocks? Surely the 72m would be better spent somewhere that addresses or alleviates a currently unmet housing need?"

The issue is the state has completely failed to build social/affordable housing (€1bn unspent in the capital budget for housing last three years etc) over the last decade and so our government is now panicking and throwing money at the problem - by buying up and leasing private sector housing instead.

Which is obviously a terrible idea on multiple levels. It uses tax payers money to bid against them, it vastly over pays for the properties, it leaves no asset with the state long term when they're leases, and most fundamentally of all it doesn't actually help the housing crisis because it doesn't add any housing units to the market - it just adds to social housing by removing units from the private sector. Its a net gain of 0.

That 72mn would pretty obviously have been much better spent actually building state owned apartments, and letting the IRES apartments go for sale to the private sector. But that would go against FG's ideology.