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Thread: I'm not being funny - We are probably at the bottom of the housing market

  1. #1
    Politics.ie Member
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    Default I'm not being funny - We are probably at the bottom of the housing market

    To be upfront and honest, I am sans house at the moment and renting. I have a bit of money in the bank thanks to a sale of a house a couple of years back.

    We started to look at building a year or two ago and got quotes etc. All ready to go and the bank wouldn't lend us the money (us and everyone else). In hindsight they did us a favour.

    Now here's the funny thing, it is now more expensive to build than to buy. And that is assuming that the asking prices are real and not a work of fiction. We are now contemplating selling the site we have (we have someone keen to buy for local reasons) and buying.

    For the majority of houses in our area, if were were to build them it would cost more than buying them. Now people on this site will argue about rental yields and oversupply. I am not saying the market will move anytime soon. The absence of funding is still a major issue.

    What I am saying is that when it costs more to build than buy, the market has overshot it's medium term level. An engineering friend of mine told me that builders are desperate and quote at cost or below cost just to keep cashflow going. So it ain't "greedy builder" syndrome. The costs I am looking at are direct labour.

    BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.

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    Hmmm. Not convinced. Unemployment on the way up. Emigration on the way up. Interest rates on the way up, all of which means demand will continue to decline.

    Best of luck in whatever decision you make.

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    Politics.ie Member richie268's Avatar
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    Quote Originally Posted by Rebel_Yell View Post
    To be upfront and honest, I am sans house at the moment and renting. I have a bit of money in the bank thanks to a sale of a house a couple of years back.

    We started to look at building a year or two ago and got quotes etc. All ready to go and the bank wouldn't lend us the money (us and everyone else). In hindsight they did us a favour.

    Now here's the funny thing, it is now more expensive to build than to buy. And that is assuming that the asking prices are real and not a work of fiction. We are now contemplating selling the site we have (we have someone keen to buy for local reasons) and buying.

    For the majority of houses in our area, if were were to build them it would cost more than buying them. Now people on this site will argue about rental yields and oversupply. I am not saying the market will move anytime soon. The absence of funding is still a major issue.

    What I am saying is that when it costs more to build than buy, the market has overshot it's medium term level. An engineering friend of mine told me that builders are desperate and quote at cost or below cost just to keep cashflow going. So it ain't "greedy builder" syndrome. The costs I am looking at are direct labour.

    BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.
    you made me laugh

  4. #4

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    All depends on location. Some areas are close to bottoming, others have a long way to go.

    On average however, given the considerable headwinds (unemployment, interest rates with only one way to go, either tax raises or more cutbacks in budgets for at least the next 4 years), one has to expect that disposable income will be falling for the next few years, which can't be positive for house prices.

    Basically, theres no real risk in waiting. Worst case scenario, theres a magical turnaround in the economy and we get inflation based raises.

    But the days of feeling panicked to get on the ladder lest prices get away from you are over.

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    Politics.ie Member fluffykontbiscuits's Avatar
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    What I would do mate is probably look at if people know cheap tilers, brickies, sparks etc.

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    Just heard from an estate agent in Sligo. They had 7 houses for sale as part of a liquidation. The houses were snapped up with people queuing overnight. I've also heard that well priced semi-d houses in Dublin south postcodes of note are selling too. It's obvious the punter knows what their floor is but its waiting for the supplier (estate agents/sellers) to price for that level accordingly. The bottleneck of the zombie banking system doesn't help.

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    Politics.ie Member libertarian-right's Avatar
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    With a government deficit so big, prolonged depression and deflationary cycle, I could add in so many more factors, all of this will have a knockon effect in the property market for the foreseeable future.

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    Politics.ie Member ballot stuffer's Avatar
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    Not even close.
    Sow the wind, reap the whirlwind.

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    Quote Originally Posted by Rebel_Yell View Post
    Now here's the funny thing, it is now more expensive to build than to buy.
    That says more about build costs than sale prices. We're far from the bottom. Very very far.
    The future saviour of the Irish Economy: Charles Darwin

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    Politics.ie Member roc_'s Avatar
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    Quote Originally Posted by Rebel_Yell View Post
    To be upfront and honest, I am sans house at the moment and renting. I have a bit of money in the bank thanks to a sale of a house a couple of years back.

    We started to look at building a year or two ago and got quotes etc. All ready to go and the bank wouldn't lend us the money (us and everyone else). In hindsight they did us a favour.

    Now here's the funny thing, it is now more expensive to build than to buy. And that is assuming that the asking prices are real and not a work of fiction. We are now contemplating selling the site we have (we have someone keen to buy for local reasons) and buying.

    For the majority of houses in our area, if were were to build them it would cost more than buying them. Now people on this site will argue about rental yields and oversupply. I am not saying the market will move anytime soon. The absence of funding is still a major issue.

    What I am saying is that when it costs more to build than buy, the market has overshot it's medium term level. An engineering friend of mine told me that builders are desperate and quote at cost or below cost just to keep cashflow going. So it ain't "greedy builder" syndrome. The costs I am looking at are direct labour.

    BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.
    Have a look into more modern building techniques such as http://web.eng.fiu.edu/prieto/HeavyC...ab-Tilt-up.pdf Also, some of the newer interior drywall build kits are extremely cost effective. Spend more time on the design, then do a complete take off and source ALL your materials at the same time up north or in the UK. (You will negotiate good discount if you buy everything together). Stuff is still way overpriced here. Don't bother unless they are willing to price match AND give you discount. Then, you should be able to get labour at reasonable price in the coming year or so. If your design is properly done and presented, there will be much less hours spent in building... Building costs during the boom years were a joke because they could get away with it. If you put your mind to it and properly utilise modern technology, you can build for WAY less. Most builders here need to start working in different ways to be able to give genuine value to their customers. Until they do, you're better doing it yourself.
    “Words are animals, alive with a will of their own”.

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