Austin Goes Country With 20k Completions Projection .

…for next year. 40k for this year.

He was speaking to an IIB Brokers shindig in Galway during the week and his comments are carried in this weeks Galway Advertiser Digital Edition which is Here as indeed are previous weeks along with the current weeks.

( specifically on page 64 of 144 07/02/2008 edition )
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Then the old Austin seemingly comes back in the next sentence.

But he never gave us a year for that “snap-back” … or does he mean a snap-back from 20k to 10k in 2010 ???

So, that’s 60,000 houses over the next two years, that nobody wants.

Grand so.

-Rd

Well for the first time in a long time they should have stopped building these empties. Where are we right now ? well north of 300k , about 330k to 350k empty and supply finally heading towards demand for the first time in years.

Natural demand c.40k a year unless emigration kicks off ( it will) so thats more like c.20k units a year.

Up to 20 years to get rid of the overhang Nationally , 19 if they flatten a few of them .

About 4-5 years to get rid of the overhang in the Big Cities alone , 9 or 10 to sort out the feasible commuter belts .

Beyond them, not in my lifetime I should think.

Let me get this straight.

The industry that did acount for 15% of net output last year is going to exeprience a ~50% fall in (gross) output this year, and up to ~50% fall in (gross) output the year after that. We can say that will be net.

So by 2009 15% of national output will have contracted by 75%, of 15% of 2006 GDP. That is more than 11% of GDP dwon the swanee. Who exactly will be left employed to buy any new builds???

The public service :blush: emm I think so anyway

Was Residential alone 15% of GDP or was all construction including Civil 15% of GDP , I know residential employed c 200k of 285k in about 2006 so thats 150k jobs seemingly gone ( 18k of them last year , the rest in this and next year) .

Some of the 150k will be redeployed to refurbs and renovations where you could get nobody for years of course. That does not mean they won’t sign on too 8)

2006 components of GDP here geckko, cannot find the 15% figure myself but open to guidance as always .

cso.ie/releasespublications/ … nt/nie.pdf

Yeah residential alone made up 15% of the economy in 2006 with construction in total coming in at 23% of the economy. There is a lot of fairytales being told by government and their lackeys about where this will lead the economy. I showed on another thread how come the end of 2009 there will be 100k+ less working in construction. A 30k 09 completions rate is what I penciled in plus a slump in commercial building. Now try to imagine how many associated and service industry jobs will go? Another 100k+? At its most simplest how many breakfast roll preparation jobs will go? Tot it all up and where does it leave the economy?

If the economy contracts by 11% there will be no pay rises for public sector, a recruitment embargo, no filling of promotions and tax bands at 22 and 45 before you can say property pin.

I dont think half of the current pub sectors realise that. I have lost count of the number of public sector people who think they will be buying up bargains when every one else loses their jobs. 1980’s baby!!

Its all a direct consequence of our rather peculiar tendency to build empties , well us and the Spanish and the Maltese who are even worse than us with 25% empty.:frowning:

And its inevitable and its best gotten over with quickly .

Austin forgot to mention the other consequence , namely that unemployment will be 6% by the summer and 8% by early next year .

Spanish unemployment has gone from 8.2% to 8.6% to 9.0% in the past three months , again because of the unravelling of a monster construction bubble a bit sooner than ours.

And on top of that, two thirds of the people involved in building houses last year are going to sit on their hands while prices rise sharply, and they won’t think to themselves “I want a piece of that action”.

I said on another thread that I can see a period when there will be practically zero new starts outside of one off houses in the countryside.

Think about it. Theres already upward of 300,000 unsold with another large amount of stock about to come onstream over the next 12 months or so. Mr. A has said elsewhere that his experience is that the market is currently at about 30% volume-wise of what it was when those currently under construction were started at the height of the madness. I think the general consensus is that “the crash” or whatever it may be called has not really begun to sink into the public consciousness as of yet. When it does I would say that its possible to expect complete market stagnation for a period (not necessarily 12 months, maybe 3/6) ie things overshoot on the way down as as they did in the other direction on the way up. Is it therefore not conceivable that there will be a period, be it 3/6 or 12 months, whatever, when no builder would consider beginning a new scheme? Why start a new development at such a time? ie massive supply for sale, all new builds having to reduce prices and still not selling.

If there is a period with a slowdown of such magnitude in new starts, it stands to reason that there would then be a period, possibly a 3/6 month period, maybe 18 months later (Im not sure how long it takes to complete a housing estate or an apartment complex), during which there are no completions coming online during which the broader economic situation would suffer drastically as a result?

Duplex has said that there is a constant demand for social housing which could sustain 10,000 builds per year, but with the trend of late towards the State diverting resources for such social housing into private developments could that figure of 10,000 be questionable?

It just doesnt make any sense to me that they can keep building indefinitely if they ever want to shift the backlog. They have overshot to such a monumental degree on the way up that to my uneducated economic eye it seems that some semblance of equilibrium can only be achieved by such an overshoot in the opposite direction. Call it my Karma theory of economics if you wish :wink:

i’ve said this before but the public sector embargo is already here in the health service and is slowly on its way into the main civil service. promotions will ALWAYS be filled regardless of embargo as they were during the last embargo (pay rises is a different thing altogether)

The household cessation rate in Ireland is about 25-30,000 pa. (ie the death rate releasing new homes, morbid I know). The rate of new household formation is anyone’s guess going forward. How many economic migrants will we see over the next few years, we might see economic emigration?.

There are approx. 400,000 people renting privately in Ireland and 40% of these receive Supplementary Welfare Allowance; so if the government wanted to house this 40% in new build social housing it might boost construction for a couple of years. But it would crucify landlords in the private rented sector(these people are living in existing housing, the supply is there). If I had any faith in the government I’d be concerned, and I have no faith in the government so I’m worried. :frowning:

The public sector added nearly 11k last year. Some f***ing embargo!

I can pick up the slack. TUG is the public sector… :wink:

20k? :open_mouth:
They must realise they are damned if they do and damned if they dont?

Anyone think Europe will give us a dig out?
Recovery is a way off yet!

Those people who claim that this doesnt affect them , negative equity doesnt matter as they bought to hold on to the property for “a long time”. That argument just doesnt hold any water.

Property is going to be looked on as a disease not as an investment.
Oh and dont just hold off buying a house, if your thinking of getting another car you there will no doubt be a huge second hand range soon.