The standard of high density housing is appalling in Dublin. I lived in a beautiful block, huge apartments, couldn't hear a sound from neighbors, great privacy the way it was set up back from a main road in it's own grounds, but the were built sometime in the 90s. I would never have considered apartments as a long term home until I lived there. Anything from the bubble years seems to be disgraceful. We need focus on building apartments that serve as actual homes, rather than an overpriced cardboard box to lay your head while the whole of the 46A commuters peer in your window
New Government scheme to help first time buyers - Advice to avoid
- Thread starter Bronte
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The standard of high density housing is appalling in Dublin. I lived in a beautiful block, huge apartments, couldn't hear a sound from neighbors, great privacy the way it was set up back from a main road in it's own grounds, but the were built sometime in the 90s. I would never have considered apartments as a long term home until I lived there. Anything from the bubble years seems to be disgraceful. We need focus on building apartments that serve as actual homes, rather than an overpriced cardboard box to lay your head while the whole of the 46A commuters peer in your window
I think (and hope) that it's an election stunt...the big launch so close to election day. It'll quietly slip into the background with very little take up by FTB's, only to get relaunched again 6 months ahead of the general election (by which time, the housing crisis will have worsened even more)...they might get Richard Bruton to do the relaunch, he loves that gig!
If this Govt cared about FTB's or any other person trying to buy a home, they'd fastrack planning, reduce levies on new builds and drop the 20% social housing requirement for X period of time.
Instead, at the behest of the various lobby groups in the property market, they raise the amounts that can be borrowed!!!
And what else have they done in the property market....oh yeah, in 2013 and 2014 they allow landlords to buy and pay no CGT if they hold the property for 7 years. So that's helped drive the 2nd hand market mental in large parts of Dublin, with Cork and Galway following suit by some accounts.
It's sickening, absolutely sickening
If this Govt cared about FTB's or any other person trying to buy a home, they'd fastrack planning, reduce levies on new builds and drop the 20% social housing requirement for X period of time.
Instead, at the behest of the various lobby groups in the property market, they raise the amounts that can be borrowed!!!
And what else have they done in the property market....oh yeah, in 2013 and 2014 they allow landlords to buy and pay no CGT if they hold the property for 7 years. So that's helped drive the 2nd hand market mental in large parts of Dublin, with Cork and Galway following suit by some accounts.
It's sickening, absolutely sickening
mandelbrot
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Well it's an ill wind...
I'm delighted, it's the first time something likely to work in my favour has happened in YEARS. After 4 years of college, 4 years of crap wages while training in my profession, qualifying just in time to be made redundant, seeing our savings eaten up by that, and basically starting from Zero again financially at 30 (my OH being in a similar situation at various times), this policy will mean we can buy a home together in late 2015 instead of 2017. So ye will have to forgive my selfishness when I say, thank god for something that suits us!!
Oh, and where I live, not even this policy is too likely to inflate much of a bubble, in case anyone wants to try to dampen my enthusiasm with warnings of overpricing...
I'm delighted, it's the first time something likely to work in my favour has happened in YEARS. After 4 years of college, 4 years of crap wages while training in my profession, qualifying just in time to be made redundant, seeing our savings eaten up by that, and basically starting from Zero again financially at 30 (my OH being in a similar situation at various times), this policy will mean we can buy a home together in late 2015 instead of 2017. So ye will have to forgive my selfishness when I say, thank god for something that suits us!!
Oh, and where I live, not even this policy is too likely to inflate much of a bubble, in case anyone wants to try to dampen my enthusiasm with warnings of overpricing...
No CGT is certainly an incentive for investors to get into the property market. But it doesn't just apply to landlords. Is their evidence it has helped the property market, is it this that is driving the market. Even with this incentive, if you want to be a landlord than you'd want more than this to make it worthwhile. With all the costs it's hard to justify buying.
You'll end up with a larger mortgage and the property will cost more than it should have if this policy comes to fruition.
3, 4, 5 increase house prices and increase borrowings.
What is the actual issue in Dublin. Who owns the landbanks, what is stopping the building. Is it a lack of finance for the builders, a problem with planning, the 20% social housing requirement.
It surely is possible to build and make a profit. If it is not possible than the cost of land must be too high, is that possible.
This is really only a Dublin problem, don't really see it in the other two large markets of Cork and Galway.
Brendan Burgess
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Hi Bronte
I think that it's the other way around. Prices in Dublin mean that it is profitable to build houses. Outside Dublin, it is cheaper to buy an existing house than to build a new one.
I think that it's the other way around. Prices in Dublin mean that it is profitable to build houses. Outside Dublin, it is cheaper to buy an existing house than to build a new one.
House prices are for 3 and 4 bed homes are up by circa 50% in many parts of SCD over the last 2.5 years (I know, because I am desperately trying to buy one that won't cripple me until I'm 70). So yes, I firmly believe that this CGT incentive has 'helped' drive that ridiculous rise
There are developers who have purchased sites for €50,000 or less in the sell off in recent times. Surely it is profitable to build 3 and 4 bed semi's on these sites at a reasonable profit in Dublin.
As regards this proposed Gov scheme if you create a sudden "availability" of buyers with money prices will go up and mortgages will be bigger.
Could be creating a future mini crisis together with what we already have.
As regards the the CGT incentive is there much evidence that Investors are buying a lot of the properties in Dublin other than the bundles of Apartment Blocks that were sold in single lots mainly purchased by foreign entities.
As regards this proposed Gov scheme if you create a sudden "availability" of buyers with money prices will go up and mortgages will be bigger.
Could be creating a future mini crisis together with what we already have.
As regards the the CGT incentive is there much evidence that Investors are buying a lot of the properties in Dublin other than the bundles of Apartment Blocks that were sold in single lots mainly purchased by foreign entities.
mandelbrot
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That was my point Bronte, I don't think I will, because the market (housing-wise and employment-wise) where I want to buy is sufficiently depressed that not even this policy is likely to spark too much life into property prices.
Even if it does, we're paying €700 a month in rent at the moment, so unless the 2015 property price that we pay with this policy in place, is at least €10,000 more than the 2017 price that we would have paid without this policy in place, then we're no worse off. To my mind we're still better off, because we'd place a value on the extra 18 months in our own house, rather than in someone else's that we can't furnish or decorate to our liking...
Don't get me wrong, I'm not actually saying that I believe this is a sensible Govt policy, I'm just saying it actually suits me, for once.
Unless you imagine you're the only couple whose demand is brought forward two years by this policy, how is it not going to affect things? What about the replacement effect whereby those who are priced out of markets elsewhere can now afford to buy in yours? Bringing forward demand will have exactly the same effect as putting money in people's pockets -- upward pressure on prices. Only increasing supply can have an ameliorating effect. However, this government is committed to raising prices and is pathologically unable to stop meddling in the market.
So, why are they not being built?
Matthew Moore
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I'd imagine if developers have land there's no incentive to build and sell at the bottom of the market. The price of building is going nowhere fast but who knows where selling prices will be in a year or two.
But clearly, we're well past the bottom of the market, at least in Dublin. So the question remains: why are more houses not being built?
Brendan Burgess
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Not really sure, but I imagine that there are a few reasons.
It is very difficult for developers to borrow money.
Developers may feel that prices may fall before the houses are actually built.
It may be profitable, but not sufficiently profitable to compensate for the risk involved.
It may be profitable, but it may be more profitable if they wait.
Planning permissions may have lapsed.
In the UK the equivelant scheme is discredited. And the boss at the Bank of England wants to stop the market from continuing to overheat. He's going to prevent it by making banks stress tests higher and by discouraging banks easing mortgage criteria. Unlike the mad scheme Enda and Gilmore have copied the Governer thinks the answer is more house building.
Meanwhile here in la la land no actual progress on housebuilding being progressed. But Nama has now sold O' Flynn's 'loans' and his company apparently hold landbanks in Dublin. But it will be two years I'm guessing before we see any house building.
Meanwhile if the radio and print media are to be believed the houseing shortgage is getting so chronic they are now looking at old army barracks to house people, the whole thing is so crazy.
The good news though for those much loved people, landlords, rents are going to go bananas as Min for Housing, O' Sullivan is talking to the social welfare people about the rent ceiling being eased. Why they don't just change the limit I don't understand. Good news though for those with BTL's that were not covering their costs.
Gerry Canning
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In the (Bubble) years Government left the (market) to resolve most housing issues.
In the (Bubble) years Government withdrew their own social housing building programmes.
Since the (Bubble) years Government are paying more and more on rent supplements.
Today the amount of (lost) Rent Supplement does not cover Dublin type rents.
We now have a horrible perfect storm in housing.
There is no quick fix, but some suggestions.Most are gleaned from contributors.
1. Force; by penal rates that Building Land owners use it, or lose it or get heavily taxed
2. Instigate an immediate Co Co building programme of X units per Co Co.
That would employ some of our well-skilled builders, we need housing so it is a win win.
3. Once good housing comes on board that will have the effect of dampening the price of standard houses.
3a. It also means house prices will not rise , it also means that with lower house costs families are not squeeezed for years with high mortgage repayment.
With a sustained Co Co building programme , it means normal houses will always be at no more than true market value , therefore NO bubble, therefore no huge mortgage to be paid each month, therefore more free cash for households...
People seem to forget that a Large Mortgage payment is a huge year on year drain on our economy.
Surely Housing is the one Social Need that must be properly tweeked by a peoples Government?
Surely anything Government does to heighten prices is anti-social?
Surely anything Government does to hold down prices is a benefit to society?
What do you in AAM think?
In the (Bubble) years Government withdrew their own social housing building programmes.
Since the (Bubble) years Government are paying more and more on rent supplements.
Today the amount of (lost) Rent Supplement does not cover Dublin type rents.
We now have a horrible perfect storm in housing.
There is no quick fix, but some suggestions.Most are gleaned from contributors.
1. Force; by penal rates that Building Land owners use it, or lose it or get heavily taxed
2. Instigate an immediate Co Co building programme of X units per Co Co.
That would employ some of our well-skilled builders, we need housing so it is a win win.
3. Once good housing comes on board that will have the effect of dampening the price of standard houses.
3a. It also means house prices will not rise , it also means that with lower house costs families are not squeeezed for years with high mortgage repayment.
With a sustained Co Co building programme , it means normal houses will always be at no more than true market value , therefore NO bubble, therefore no huge mortgage to be paid each month, therefore more free cash for households...
People seem to forget that a Large Mortgage payment is a huge year on year drain on our economy.
Surely Housing is the one Social Need that must be properly tweeked by a peoples Government?
Surely anything Government does to heighten prices is anti-social?
Surely anything Government does to hold down prices is a benefit to society?
What do you in AAM think?
Both good sensible suggestions Gerry. Simple and straightforward and unfortunately appear to be too simplastic for the Gov to implement! Councils should be in a position where if landbanks are unused for a period, then they can use compulsary purchase legislation to acquire them at an acceptable market price. There is a huge need for additional social housing and this can be an incentive for the market as a whole.
I accept the reluctance to get involved in the marketplace, but the practise of hanging on to key sites by either banks or private individuals (using them as pension pots or savings schemes) is now damaging to the economy and needs to addressed. We cannot countenance a situation where the housing supply is deliberately maintained at a trickle in order to drive up prices. Where are the Government spokespeople on this issue?
You need five elements in place to get the house supply chain moving.
1) You need owners of land to make it available. (I think this can be solved by higher prices)
2) You need enough developers willing to take on the associated financial & development risks ( I think this also can be solved by higher prices)
3) The banks need to have sufficient funds available to them, to lend.
I dont think the Irish banks are sufficiently strong to open the loan books in the way that is needed.
4) You need banks WILLING to lend, taking on reasonable levels of risk
Banks are clearly in contraction mode / fire fighting mode, not expansion mode
5) You need buyers willing to buy.
I think 1 & 2 can be solved by higher land / house prices.
I think 3 & 4 will require government / EU input. In my view this is the real issue. Its a financing / banking issue not a land supply issue
I think 5 is the only one currently in place.
The only way out of this is higher prices and greater liquidity.
1) You need owners of land to make it available. (I think this can be solved by higher prices)
2) You need enough developers willing to take on the associated financial & development risks ( I think this also can be solved by higher prices)
3) The banks need to have sufficient funds available to them, to lend.
I dont think the Irish banks are sufficiently strong to open the loan books in the way that is needed.
4) You need banks WILLING to lend, taking on reasonable levels of risk
Banks are clearly in contraction mode / fire fighting mode, not expansion mode
5) You need buyers willing to buy.
I think 1 & 2 can be solved by higher land / house prices.
I think 3 & 4 will require government / EU input. In my view this is the real issue. Its a financing / banking issue not a land supply issue
I think 5 is the only one currently in place.
The only way out of this is higher prices and greater liquidity.