Hi Jim and Chris. Very useful overview of the multifaceted housing market issue(s). If the current crisis provokes more short sighted meddling in the market it’ll just veer further off course.as someone who’s been involved in property development since the 80s I’d really like the conversation to get more balanced.
We don’t hear much about the role of indigenous property developers and how they take on acquisition, financing, planning, construction cost and market risks in order to deliver a much needed product.
Since the 2008/9 crash, the playing field is tilted heavily in favour of Investment Funds, with local developers at distinct disadvantage in terms of tax regime and financing. Add to this the fact that the tax take is a significant chunk of all housing sales prices, while populist voices keep insisting that housing can be delivered at ridiculously low prices, and you perpetuate the image of the greedy speculative developer.
It should be borne in mind that there’s a very real risk associated with apartment development versus suburban semi-d development - as an entire multi-unit block must be completely finished in order to close the sale of just one dwelling.
The absence of a proper financing model over preceding decades has pushed many developers to opt for carpet development of semi-d units in budget areas so that the output can respond to a variable market, and limit the funding exposure.
Provide reasonable financing for local developers and let them operate in a non-punitive tax regime, and you’ll definitely see the delivery of housing for sale to the public. Treat them like a fundamentally useful and worthy part of the solution in other words.
Thanks to Steven for his comments and I would agree with the principles expressed. In relation to the financing challenges, I would ask both of you and Steven are elements of the 'green deal' a (partical) answer. In my question I am referencing what I see going on in Netherlands who have a similar housing challenge to Ireland and are in a rebullding programme, but one with an emphasis on better design/build methods which also minimise (carbon) impacts on the environment (use of doughnut economic principles from Kate Raworth). So I am aware of some of the anti-competitive forces in Ireland's building market (e.g. cement / block suppliers) and could this sustainable focus be part of a resolution? Also in relation to our younger population who want to purchase a property, would this 'green' focus be a popular one? Thanks Richie
Hi Jim and Chris. Very useful overview of the multifaceted housing market issue(s). If the current crisis provokes more short sighted meddling in the market it’ll just veer further off course.as someone who’s been involved in property development since the 80s I’d really like the conversation to get more balanced.
We don’t hear much about the role of indigenous property developers and how they take on acquisition, financing, planning, construction cost and market risks in order to deliver a much needed product.
Since the 2008/9 crash, the playing field is tilted heavily in favour of Investment Funds, with local developers at distinct disadvantage in terms of tax regime and financing. Add to this the fact that the tax take is a significant chunk of all housing sales prices, while populist voices keep insisting that housing can be delivered at ridiculously low prices, and you perpetuate the image of the greedy speculative developer.
It should be borne in mind that there’s a very real risk associated with apartment development versus suburban semi-d development - as an entire multi-unit block must be completely finished in order to close the sale of just one dwelling.
The absence of a proper financing model over preceding decades has pushed many developers to opt for carpet development of semi-d units in budget areas so that the output can respond to a variable market, and limit the funding exposure.
Provide reasonable financing for local developers and let them operate in a non-punitive tax regime, and you’ll definitely see the delivery of housing for sale to the public. Treat them like a fundamentally useful and worthy part of the solution in other words.
Steven
Thanks to Steven for his comments and I would agree with the principles expressed. In relation to the financing challenges, I would ask both of you and Steven are elements of the 'green deal' a (partical) answer. In my question I am referencing what I see going on in Netherlands who have a similar housing challenge to Ireland and are in a rebullding programme, but one with an emphasis on better design/build methods which also minimise (carbon) impacts on the environment (use of doughnut economic principles from Kate Raworth). So I am aware of some of the anti-competitive forces in Ireland's building market (e.g. cement / block suppliers) and could this sustainable focus be part of a resolution? Also in relation to our younger population who want to purchase a property, would this 'green' focus be a popular one? Thanks Richie