Ireland needs cheaper homes not bigger mortgages

Mocame said:
I don't think there is any evidence that the state taking a % of new developments for social housing pushes up prices for everyone else.
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Interesting point which I will reflect on.

I would have thought that a developer makes more profit selling at market price than to the local authority.

So he might not lose actual cash by selling to the local authority, but his overall profit is lower. So he has to achieve his total return over 90 units instead of 100 units.

Brendan
 
Instead of focussing on demand-side issues, we need to focus more on supply-side.

Massive cuts in cost of land
Much cheaper finance
De-risk building houses, so 15% developer margin's aren't required
Massive boost to labour supply of builders.
 
Mocame said:
Just one issue - I don't think there is any evidence that the state taking a % of new developments for social housing pushes up prices for everyone else.
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Who do you think is renting the buy to let properties?

On the issue of price, what percentage of people who own houses could afford to buy that house at todays prices?
Average household income in Ireland is around €30,000. Average incomes for working people are around €45,000. At 3.5 times income that's a mortgage of €157,500. The median price of a house is around €350,000.

What other asset class could that be said of?
 
There are tens of thousands of properties that could be used for residential purposes. They are the rooms over shops, many of which were originally designed to be lived in. We should be homing in on those to get them back into use ASAP. The owner should not have any increase in rates and grants should be available to cover the cost of bringing them up to code.

Instead we have pre-63 properties which are absolute hovels and fire traps. I looked at a property recently with a relative in such a building in South Dublin. It was advertised as a one-bed unit. The place stank and was damp. The owner had broken through into the attic and there were beds and mattresses all over the place. I think 9 people were living there. It was Dickensian. The rent was €1250 per month.
 
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NoRegretsCoyote said:
What matters is the monthly mortgage payment to provide shelter for me and my family. The policy discussion should focus on affordability, not prices.
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So you don't think that if you had paid 40% less for that same property that your monthly mortgage payments would be lower, and thus more affordable / sustainable?
 
Leo said:
So you don't think that if you had paid 40% less for that same property that your monthly mortgage payments would be lower, and thus more affordable / sustainable?
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Indeed. Over the last 20 years the value of my house has varied from €300k to €900k. Interest rates have fallen and risen. Trackers were available, then they weren't. Underwriting standards were loosened, then tightened. Average wages have risen.

All of these factors feed into affordability. Price is not the only one.
 
Homelessness happens when the cost of the average home, rented or bought, is more than one third of the average income of the average household. When rents are lower than that we just don't see it.
 
Leo said:
So the single dominating factor affecting affordability of that home is the price.
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My next door neighbour paid more but has a 70bp tracker.

I paid less but am paying 2.8% (was 4.3% at origination).

There are a lot of things in the affordability equation. Price doesn't "dominate".
 
NoRegretsCoyote said:
My next door neighbour paid more but has a 70bp tracker.

I paid less but am paying 2.8% (was 4.3% at origination).

There are a lot of things in the affordability equation. Price doesn't "dominate".
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If person A buys a property at 900k on a 70pb tracker, and person B buys one for 300k on a 4.3% variable, who pays more each month?
 
Leo said:
If person A buys a property at 900k on a 70pb tracker, and person B buys one for 300k on a 4.3% variable, who pays more each month?
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And trackers are gone now, having made a relatively brief appearance in the market.
 
Protocol said:
Instead of focussing on demand-side issues, we need to focus more on supply-side.

Massive cuts in cost of land
Much cheaper finance
De-risk building houses, so 15% developer margin's aren't required
Massive boost to labour supply of builders.
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What risk is there in building houses at the moment? If they're built in the right places they'll sell, if they're not then they probably shouldn't have been granted planning permission.
What interest rates are builders being charged at the minute? And what is the cause of that being higher than it should (if indeed it is).
How do you boost labour supply?
 
dereko1969 said:
What risk is there in building houses at the moment? If they're built in the right places they'll sell, if they're not then they probably shouldn't have been granted planning permission.
What interest rates are builders being charged at the minute? And what is the cause of that being higher than it should (if indeed it is).
How do you boost labour supply?
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Very well said dereko 1969
I think you should have said, what risk is there in building homes with planning in the right places and of a design that can be sold to the average Industrial wage earner close to their place of work who save a deposit to buy a home after five years saving a deposit,
 
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kinnjohn said:
Very well said dereko 1969
I think you should have said, what risk is there in building homes with planning in the right places and of a design that can be sold to the average Industrial wage earner close to their place of work who save a deposit to buy a home after five years saving a deposit,
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There's no risk in that scenario. In reality the developer buys the land with a loan then spends 5-8 years getting planning permission and then actually building the houses.
Nobody is building houses in cities which can be sold to the average Industrial wage earner close to their place of work who save a deposit to buy a home after five years saving a deposit, not without a big handout from the State.
 
Purple said:
There's no risk in that scenario. In reality the developer buys the land with a loan then spends 5-8 years getting planning permission and then actually building the houses.
Nobody is building houses in cities which can be sold to the average Industrial wage earner close to their place of work who save a deposit to buy a home after five years saving a deposit, not without a big handout from the State.
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In 2005 the population of Dublin was forecast to reach 2 million, By 2021
think the present population of Dublin at present 1.43,

there is 570000 fewer living in Dublin than the forecast figure for 2021 I don't think Dublin shrunk, there must be scope to build seeing the population is 570000 less than expected by 2021,

at present, the government are giving handouts to people to build mansions that were going to be built with or without a handout,


If people on average wages are working in our cities there has to be planning to house them long term,

There is a very big unforeseen social security retirement bill on its way for people on low wages who moved to Ireland move out of Ireland after 15/ 20 years because of housing problems, We might as well spend it on housing than recycling labor because of housing problems related to the wage levels paid in our Citys,

If you are on an average wage after four five six seven or eight years of savings there should be a plan that the average wage earner can secure a home for the rest of their working life and retirement, in the area they worked all of their life,

this is how it was at the start of your working life you posted you are in your mid to late forties
I am in my late sixties and it was the same back then as when you started working,

The Citys I have visited of late within the EU new building seems to be planned around smaller units but homes for all who work within them,

From what I can see the age profile of staff on average are older than Ireland and they appear to be holding down full-time jobs,

I get the feeling in Ireland people on low to average income who travel long distances opt out of work long before the state contributory retirement date, I suspect the state is picking up the tab somewhere along the line,
 
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