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

This is mostly correct, but its worth noting that as of January a majority of the population (69%) would support a drop in home prices of almost a third tomorrow. 63% of Irish people polled said they would like to see property prices fall even if it meant their own home depreciated in value. [1]

So a strong majority of the public, and even of homeowners, are actually OK with home prices dropping significantly. Its not a case of homeowners all wanting an increase in prices vs renters wanting the opposite.

Even if they themselves aren't directly impacted most homeowners these days have children, or relatives, or friends, who're meaningfully impacted by the housing crisis. Or they're business owners/managers who can't get staff because of the housing crisis. Or they just care about the negative impact of the housing crisis on the country in general.

The core problem is our government's political parties care more about the property industry than what the public wants or needs.

[1]https://www.independent.ie/irish-news/poll-public-backs-mary-lou-mcdonalds-call-for-300000-average-house-price-in-dublin/a1386646140.html

We'll never catch up to anything with things as they are, but that's its own kettle of fish.

Regarding the metro-link, I think it will never be built. Just look at what happened with the children's hospital, and no one will face consequences for that.

It’s not just home owners that are impacted..: Would trades men, suppliers etc be happy to take a 30% pay cut? That’s a genuine question on the economic reality of a 30% price drop because cost of building would need to drop or no new houses would be built because to do so with the existing cost basis would generate a loss.

Can you explain how it would work once you join up the dots and look at the full picture

Crikey, that’s a lot of wishful thinking.

There are certain inalienable truths, developers will not build if they think they are going to lose money on a project ( a 30% drop in the current climate would only result from a seismic event in our economy), and the government would never be able to ramp up their building projects at the rate which private developers would slow them down if a collapse in house prices of the magnitude you are talking about occurred.

I’m always bemused by these polls, it’s like asking the public would they like the price of a pint to drop 20%, of course they say yes if they think they will ever buy a pint. Ask them if they want an economic shock that would cause prices to drop 20% over a short period and potentially lead to them losing their job/wages being reduced, and you might get a different response.

can you please explain where the 30% saving in cost is going to come from because if there is no savings in cost then your talking about building at a loss…(regardless of it being private or the government….This sounds like some SF policy that when you dig into the figures you quickly find out they don’t add up and is something from a fairytale)

It is the wont of certain people on this thread to blame all on government policy, whilst ignoring the part played in our recovery over the last 10 years that led to full employment and a large number of high paying jobs. It’s almost as if they want to go back to 2012 when houses were cheap, but people still couldn’t afford them.

I agree that it won’t happen without some major event… I’m just trying to point out that the idea that house prices drop by 30% and nobody takes a paycut or pays more taxes is more or less impossible because of knock on consequences that people like to ignore.

for example OP said builders could go into infrastructure construction so not to take a pay cut…but this means less people building houses which equals less supply which equals higher prices…. The figures don’t add up

There Is no way you will get a 30% drop without there being a drop in both labour and material prices of nearly similar amounts.

Most of what you post is bananas economics. Yes the government has a surplus. However for the state to procure say 20k houses a year even at SF's 300k price would cost 6 billion a year. Last year the current budget surplus was 1.3 billion.

The reality is that it cost money to build houses, the higher the number you build the more it costs per unit. Maybe if the Greens are not in government after the next election the new government can change the terms of reference of An Bord Pleanala and defund An Taisce. But even with more planning premissions and the PP happening faster and cheaper it will not necessarily make houses cheaper.

The other suggestion for the government to stop all commercial build would have serious conquences. At present commercial is slowing down anyway but ceasing it completely would have conquences for companies both big and small

Cut tax paying subsidies? Do you mean rent subsidies?

The other points I agree with; although the commercial build migrarion to resi should take care of itself now, at least for a few years.

The big difference with houses back then to now was you bought the walls with windows and doors ( well you could describe them as windows and doors) and virtually nothing else.

At present people building self builds are starting to reduce/take out expensice features in houses, such as corner or feature windows, extra large sliding doors, vaulted ceilings etc because of the costs involved.

Young lad took out a vaulted ceiling because it was adding 5k to build cost and it would have caused extra cost to the heat recovery system.

Genuine question as I see similar comments on here regularly about the budget impact. Won't these houses be sold almost instantly, considering the demand, resulting in no budget deficit? If sold at cost with no profit they'll still generate the same return as the invested capital or close to it.

As such this is totally different to any current government spending in that it's not new 6 billion needed to be taken out of taxes each year, like healthcare budget overruns for example. It's money that is invested and then returned back into the exchequer as soon as the house sells. So the same 6 billion could be reinvested in perpetuity every year in theory.

I think the budget argument is totally bogus TBH. Not to say there aren't other arguments against direct government building of housing, like competition for labour with private companies, general bureaucratic inefficiencies and the often mentioned EU state aid rules (not that anyone can explain how other countries avoid these and still build plenty of housing, for example Finland).

The 20k is mainly the social and some affordable element. It could turn out substantially higher as demand for social housing would substantially increase.

The reason are first people that at present sharing with HAP would want a separate apartment/ house. You then have the house with multiple family units both rented and existing social and private. This is all assuming 50k+ units build a year and costs @ 300k which is economically unlikely.

This is why I always say HAP is an exceedingly excellent value for the government. In 2022 I think it cost approx 750 billion. It housed 68k households with the households paying part of the payment to the state as well as the LL.

To house that many @300k a house would cost 21 million alone. You can add to that the demand from those in multiple houes etc and people that do not bother with the system but would be entitled to it if they applied

Personally speaking, I bought in 2022, and my house is now worth about 10% more than what I paid for it. I would lose out if prices dropped, but to me, it's better in the long run for everyone if this happens. The policies of the state to perpetuate growth are beyond socially deleterious, and whilst I don't have kids myself, I do have nephews, and I want them to have a future.