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 If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.
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 If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.Surely we should be doing a deep analysis of all our costs relative to UK at least, how much does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?
Rent has risen 50%+ in 10 years but salaries have not.This is a silly analogy; we purchase food because the opportunity cost of subsistence farming is far higher than buying it from a supermarket.
The issue, to my mind, of renting vs. purchase is much simpler.
a. Rent will most likely remain a fixed percentage of your income.
If you are paying 30% of your monthly income in rent today, in 10 years time, you will still be paying 30% of your monthly income; whereas a mortgage, as a % of your income will be less in 10 years.
b. With the exception of social housing, you have no real security of tenure when renting; whereas no one can put you out of your home.
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.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 If their method for building houses is similarly outdated it's like comparing horses when everyone else is driving cars.
Absolutely, in-fill housing and refurbishment will always require labour intensive methods.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.
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.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.
That's fine if we've removed skilled labour from the initial construction phase.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.
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.The probability is that a significant number of them are peoples holiday homes, peoples private property, no business of anyone else.
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.If you are paying 30% of your monthly income in rent today, in 10 years time, you will still be paying 30% of your monthly income; whereas a mortgage, as a % of your income will be less in 10 years.
b. With the exception of social housing, you have no real security of tenure when renting; whereas no one can put you out of your home.
Not true on average given the prevalence of trackers at the time.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.
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.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.
Lots of people weren't on trackers. I still am, thankfully.Not true on average given the prevalence of trackers at the time.
That's why I said "on average".Lots of people weren't on trackers.
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.there's been no real wage inflation in the last 20 years
Fair enough.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.
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).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.
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.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?
and money is significantly more expensive.
Well if you move the goalposts from levels to rates of change........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
How many people buy houses on the Eurobar rate?No it is not. In 2001 3-month euribor averaged about 4%.
The rate of increase since 2010 is around 0.6%.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.
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 didn't know why you are referring to inter bank rates in the context of a discussion about the affordability of homes.
I am not arguing this.you seem to be arguing that living standards are increasing and home ownership is just as achievable for those starting out.
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.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.