"Let's demolish the four great myths of housing"- Conor Skehan

Surely we should be doing a deep analysis of all our costs relative to UK at least, how much does it cost for developers to connect to services, how many tradesmen hours per house at what cost?
From reading @Purple's comments comparing against the UK is pointless. If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.
 
Rent has risen 50%+ in 10 years but salaries have not.
 
From reading @Purple's comments comparing against the UK is pointless. If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.
Yes @Purple might have some good ideas as regards streamlining and factory construction of components but they are still not widespread anywhere. The UK has a very large manufacturing and assembly line production system , so surely they would not be slow in coming up with manufacturing system for construction. In Spain and Portugal I noticed that their construction techniques are even more labour intensive than here, narrow streets, tall buildings, so you cant fit in big equipment, anecdotally they are employing cheap migrant labour from North africa to do this. If you are going to preserve historic buildings and street scapes it requires alot of labour.
 
Absolutely, in-fill housing and refurbishment will always require labour intensive methods.
I passes a new build every day for 18 months on my way to work. Each unit on the terraced rows has a brick built bin enclosure outside the front door. There were close to 100 units. Each bin enclosure was hand built using methods which have been around for around 3000 years. They could have been made from concrete with a brick finish shell. It would have been cheaper and faster. The roofs were constructed on site. It was craft construction instead of mass production. Craft construction is slower, more expensive and lower quality.
 
Good points, but doesn't our popular culture promote craft construction, the whole "room to improve" Dermot bannon phenomenon ? Perfectly good houses are gutted for "bespoke" "contemporary" solutions, I know it's a tv show but it has consequences, a lot of skilled labour tied up in these projects even though the original house was perfectly ok and just needed some upgrades.
 
That's fine if we've removed skilled labour from the initial construction phase.
Toyota don't build cars the way specialists do in bespoke one-off builds but we use the same manufacturing process to build high volume estates as one-off houses. Imagine how much a car would cost if was built that way?
 
Rent is dead money

Buy a house for €200,000 pay €400 a month interest

Rent the same house for €1,200 a month.

The utility is almost exactly the same, i.e you get to live in the house.

The difference €800 a month is dead money.

Now if you could rent for less than the interest cost of the loan, then the money paid in rent would not be dead money.
 
Good luck with finding a house for €200,000. Also why would one person rent a house? It is more likely that you would share it with 2 or 3 others. Then suddenly the rent isn't so punitive. From direct experience a significant number of rental units are shared but all we hear about is the headline rent, not the per head amount. Ultimately arguing about rent being "dead money" is pointless, the sort of debate that goes on in a pub all night.

On a separate point I see that the 200,000 vacant units debate is back on. A few years back this figure was apparently 180,000 odd. If memory serves me right it came from census data that if a census caller to a house didn't receive an answer the house was marked as vacant. When looked into no one could verify this "vacant" number as real. In fact I remember that a council official in North Dublin commented that in his (large) area there were very few units vacant. Accordingly if Dublin doesn't have tens of thousands of units vacant then how could 200,000 arise? I accept that there is probably thousands of properties vacant but nothing remotely close to 200,000. It is a convenient figure for opposition parties to bleat on about. The probability is that a significant number of them are peoples holiday homes, peoples private property, no business of anyone else.
 
The probability is that a significant number of them are peoples holiday homes, peoples private property, no business of anyone else.
I'd say that they are nearly all private property but that doesn't mean they aren't the business of the public at large. Drive around urban Dublin and take a look at the areas over shops and see how many could be used for accommodation. Of course if the owner goes to the considerable expense of refurbishing them and renting them they'll be hit for a large increase in their Rates and have a massive increase in their insurance.
 
This is not true. Many people who bought houses in 2003, 04, 05, 06, 07 are actually paying a higher percentage of net income now, 15 years later, than when they purchased the property.

Buying a property since the boom and massive bust comes with a big warning sign. Your property price can plummet or wages can plummet and your tax bill can go up.
 
That's the crux of the problem; there's been no real wage inflation in the last 20 years but property price inflation has been massive. That has resulted in a wealth being concentrated in capital rather than labour but it's a global problem caused by the opening up of the labour market in South East Asia from the late 1980's.
 
Lots of people weren't on trackers.
That's why I said "on average".

Look at Figure 1 here.

By 2015 the majority of mortgages originating in 2005-07 were on a tracker, with a substantial minority for 2003 and 2004 too.

there's been no real wage inflation in the last 20 years
That's just nonsense. The CSO's long series shows an increase in real wages 2001 to 2015 of about 1% a year. It's gone up since again.
 
That's why I said "on average".

Look at Figure 1 here.

By 2015 the majority of mortgages originating in 2005-07 were on a tracker, with a substantial minority for 2003 and 2004 too.
Fair enough.
House prices now are nearly as high at the peak of the boom and money is significantly more expensive. It is harder now for an average working person without equity to buy a house now than it was 20 years ago.

That's just nonsense. The CSO's long series shows an increase in real wages 2001 to 2015 of about 1% a year. It's gone up since again.
It's also true to say that real earnings growth are lower now that at any time since the CSO started keeping records in the 1940's (fig.1.2 in your link).
When I say no real wage inflation I means that there was none worth talking about. It's half what it was a decade ago and a third of what it was in the 1990's. Therefore it's true to say that real wage growth is reducing a very significant rate.
 
But we don't have large scale building of housing estates to benefit from the economies of scale that Toyota do. The building of a car is different to that of a property.

Certainly if we built all houses exactly the same (the only difference being size ie two bed, three bed or four bed) then yes we could get economies of scale in some parts of the build process. But we don't as no builder is big enough to benefit to any large degree.

if builders were removed from the process and people purchased directly from the manufacturer then they could decide their own fit out etc.
 
and money is significantly more expensive.

No it is not. In 2001 3-month euribor averaged about 4%.

It's also true to say that real earnings growth are lower now that at any time since the CSO started keeping records in the 1940's
Well if you move the goalposts from levels to rates of change........

Even 1% wage growth means a doubling of living standards every 70 years. I think a doubling of living standards over a lifetime is very much worth talking about.
 
No it is not. In 2001 3-month euribor averaged about 4%.
How many people buy houses on the Eurobar rate?
My mortgage is at 0.78% above the ECB base rate. I don't think you'll find any lenders offering mortgages at that rate now.
I didn't know why you are referring to inter bank rates in the context of a discussion about the affordability of homes.

Well if you move the goalposts from levels to rates of change........

Even 1% wage growth means a doubling of living standards every 70 years. I think a doubling of living standards over a lifetime is very much worth talking about.
The rate of increase since 2010 is around 0.6%.

You seem to be arguing that living standards are increasing and home ownership is just as achievable for those starting out. If so the ESRI disagrees with you.
In the past we'd be able to rely on emigration to take the pressure off the housing market in a time like this but that option is effectively closed at the moment.
 
I didn't know why you are referring to inter bank rates in the context of a discussion about the affordability of homes.
Because you said "money is significantly more expensive" than 20 years ago. It's not. Figure 7 here shows a mortgage interest rate of about 5% in 2001. It's more like 3% now.

you seem to be arguing that living standards are increasing and home ownership is just as achievable for those starting out.
I am not arguing this.

I am just picking holes in your dubious claims.
 
Because you said "money is significantly more expensive" than 20 years ago. It's not. Figure 7 here shows a mortgage interest rate of about 5% in 2001. It's more like 3% now.

I am not arguing this.

I am just picking holes in your dubious claims.
So houses are relatively more expensive to fund now than they were 20 years ago, given that the average residential property price then was €175k and now it's €275k. Tracker mortgages were introduced in 2001 and by 2004 banks were offering rates of 0.95 above the ECB base rate or 2.95% in total and that reduced further as ECB rates dropped so yes, 20 years ago interest rates were higher than they are now but 17 years ago they weren't, and property is nearly 50% more expensive now than it was then.

Prices are around the same now as the height of the boom but interest rates are higher on most mortgages since the banks are no longer offering tracker rates.

Other than nit-picking I fail to see the point of your posts.