Yes, of course it makes sense for the banks, which is why it's happening. The banks then control both the existing housing supply and the availability of credit to developers. That creates a perverse incentive to perpetuate a housing supply crisis, which is damaging to the economy in other ways. The answer to the question in your first sentence, then, depends on who you're asking.
Why there is so little house building in Ireland
- Thread starter Brendan Burgess
- Start date
Thanks Bronte,
I'd forgotten the details and the effects.
I agree that the government should not interfere, but with the advent of NAMA (and its continuance from an initial objective of selling off the dodgy loans to now actively investing in property) it seems that the state has become involved in the property market in a very big way.
Firefly.
Just to return to the original point of this thread...
If land is free/cheap to developers, and the cost of construction is high, then the way forward is to build on larger sites.
People (in Dublin at least) will pay more for a given house on a larger site. The land may be valueless when it's an empty field, but it certainly isn't when it's an acre of garden around a 4 bed detached house.
Of course we can't solve the volume problem by building one house per acre so it won't be allowed to happen.
Others ways of looking at the problem...
Is the existing housing stock is overpriced, relatively? New houses SHOULD be expensive, cos they're supposed to be better built. That's progress, right?
Is this a failure of architecture? Or services? What if the govt worked with developers to ensure that these vast new estates were serviced by Educate Together schools?
If land is free/cheap to developers, and the cost of construction is high, then the way forward is to build on larger sites.
People (in Dublin at least) will pay more for a given house on a larger site. The land may be valueless when it's an empty field, but it certainly isn't when it's an acre of garden around a 4 bed detached house.
Of course we can't solve the volume problem by building one house per acre so it won't be allowed to happen.
Others ways of looking at the problem...
Is the existing housing stock is overpriced, relatively? New houses SHOULD be expensive, cos they're supposed to be better built. That's progress, right?
Is this a failure of architecture? Or services? What if the govt worked with developers to ensure that these vast new estates were serviced by Educate Together schools?
Why should new houses be more expensive?
Every other manufactured good is cheaper in real terms now than it was at any time in the last 200 years.
Houses can and should be manufactured and assembled to a higher standard at a lower cost now than they were 20 years ago. The reason they aren't is that the construction sector is more interested in moaning than innovating, more interested in looking for handouts than sorting out their own problems. The very fact they are looking for the government to do anything "for them" typifies the problem.
More expensive than existing stock. I'm not making an argument about costs of construction over time, but if you can't build low end new houses then better build higher-end ones.
But since you raised the costs-over-time issue...
If you can work out how to scale yourself to live on a silicon wafer then I'm sure you'll find your "house" is much cheaper. In the real world houses have a large wage cost component so are more like a service product (e.g. posh restaurant food) than a manufactured good.
Has the price of eating a 2-star Michelin dinner dropped in the last 20 years?
Brendan Burgess
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Building land is expensive in Dublin.
In May 2012, it was €194k to build a house before site costs. Even if it has risen in the meantime, presumably it's a max of €250,000. Most 3 beds sell for far more than this in Dublin. So it would not make sense to build one house on an acre, when you can build 12.
In May 2012, it was €194k to build a house before site costs. Even if it has risen in the meantime, presumably it's a max of €250,000. Most 3 beds sell for far more than this in Dublin. So it would not make sense to build one house on an acre, when you can build 12.
That's nonsense. Most of the house can be built off-site in a factory with automated lines. First fix electrical and plumbing can be done at that stage. The assembly of the units on site can be speeded up by using the correct power tools instead of 18th century hammers.
Then proper QA and QC can be carried out at the time of manufacture so the purchaser isn't relying on our third rate tradespeople to fit windows, plaster walls and hang doors. Who knows, the plumbing mightn't leak and the doors and windows might open and close properly!
The only major element that needs to be manufactured on-site is the foundation and that is done using heavy equipment.
Houses in Ireland are built in the same way as they were 50 years ago. At least half of the on-site labour cost can be removed, maybe 75%. The off site labour can be done more efficiently and to a higher standard.
We need to build houses the way most of Europe and North America does. The site is what's valuable so the house itself should be able to be changed every 50 or 100 years without a massive financial and environmental cost.
I think your point about off site building is correct.
At the end of the boom a number of developers were fitting bought in bathrooms. That is the entire room, walls floors ceiling and all the contents. Mostly imported from Italy. And of course because they were factory made they were perfect. They had connection points for water, power and waste, they were unloaded and plugged in!
Seeing as the radio/TV is full of false concern/concern/shock/platitudes and nonsense on homelessness about the death of a homeless man, one is reminded of this thread back then and our debate on solutions, here's the predictable knee jerk reaction of this constant back peddling government:
http://www.independent.ie/irish-new...ifted-to-tackle-homeless-crisis-30795027.html
All so utterly preventable, but sure what would a landlord driven to insanity with Irish water know about causes of Dublin's property mess, and the new vote buying row back on property tax.
What next, a new Bacon against landlords, we the enemies of the people, and the root of many people's ire.
Sophrosyne
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Agree completely!
Hi RainyDay,
Looks like even the Labour Party (Joan Burton) is seeing the light regarding bedsits..
“The reduction in the number of bedsits available has undoubtedly put an awful lot of pressure in terms of the number of places available for single people on their own might find a home,” she added.
http://www.independent.ie/irish-new...ifted-to-tackle-homeless-crisis-30795027.html
Firefly.
The issue was debated extensively on this forum. At a certain time all of us country people who went to work in Dublin started out in bedsits. They are not ideal for long term living but neither are hostels or hotels. At least with a bedsit you have your own privacy and while not being perfect they did provide an affordable level of accomodation to those in most need. We need to work towards a standard of accomodation that is both affordable and acceptable, but until sufficient accomodation of this type becomes available there is no benefit in banning bedsits.
The figures reported in this tweet might be relevant to this debate;
https://twitter.com/BRegsBlog/status/550250457604816897?s=03
https://twitter.com/BRegsBlog/status/550250457604816897?s=03
J
jjm
Guest
very interesting looking back now,
Brendan Burgess
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It would also be interesting to see what the government ministers were saying back then.
And what will we and they be saying in 3 years.
Brendan
And what will we and they be saying in 3 years.
Brendan
Well Firefly how right you were. As was Purple. All of us still here. Tommy who dealt with landlords was on the ball too. All of us back in 2014 and before. It amazes me the mess the government has created. Today they will march for housing to be a metal right. Knee jerking the government into some fanciful solution that won’t solve anything. But they won’t discuss options with ordinary landlord like me. I see properties I could buy and convert into love apartments, but there is no reason to do so as the costs and risks are too high because of government policies.
You have your answer now. And things are going to get a lot worse. Eventually the lack of affordable rental is going to drive investors out of Ireland and the jobs with them. It’s a catastrophe.
Proof that even back in 2014 it was clear REITs would drive up rents.
Steady on now, we're not Japan!