Builders' fees go through the roof (Letters, Independent)

The Irish Property Bubble (2006) The Republic of Property
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By Trim, Co Meath
Thursday August 07 2008

For the past few months, we have been inundated with media reports about the “collapsing” construction industry. If, as we are allegedly informed, there are many builders currently unemployed, can someone please explain to me why I’m getting the same quotes (average quote €165,000 for a contract build) from builders to build a 138m sq bungalow on my own site as I got two years ago at the height of the boom?

CSO figures tell us that the average house price in the Republic of Ireland in 1996 was €87,000, and this rose to over €300,000 in 2006 (Irish Independent, July 31).

At last these grossly inflated house prices are coming back to more realistic levels, but why are the grossly inflated prices that builders were charging customers during the boom years not also coming down?

To put builders’ wages in context, it ought to be pointed out that one does not require third-level qualifications to be a builder in this country (unlike in Germany, for instance).

I went to university, studied hard and after 12 years’ teaching, my gross annual salary currently stands at €53,000.

However, someone with no qualifications can tell me that he wants €165,000 to build my house and supposing that he builds four or five houses a year, is it any wonder that all the builders I know have the best of houses, cars and holidays, while I’m still in rented accommodation trying fruitlessly to get onto the property ladder?

It cost an average of £35,000 to build a house of 138m sq 10 years ago.

When are builders going to come down from Cloud Cuckoo Land and start charging clients realistic prices?

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I used to share a house with a teacher and was forever hearing about how teachers went to university and so should get at least the same salary as an IT professional. This was at the height of the dot-com boom.

This was typical of the attitude from her and her militant co-workers. They seem to think that everyone should have an income that is solely based on their level of education.

Teachers: Short hours, very long holidays, job security and a nice pension but still moaning.

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Next we’ll have arts graduates demanding the same wages as those who spent their formative years gaining valuable experience in flipping burgers.

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The equation of ‘unqualified’ with ‘unskilled’ is a bit dumb from someone parading their education, or worse, charged with educating others.

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Not to mention the fact that he/she extrapolates the cost of building one house to infer the income from building several houses over the course of a year for a single person.

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In his analysis he has forgotten to take inflation into account. For example, the cost of building materials has rocketed and the builder will also have to pay wages to his staff. These will also have increased because of inflation.

If he is not very happy with his salary why doesnt he go out and find another job!

You often find that those who become teachers are those who are not able to get a better paid job for the subject they have studied. For example, the best maths graduates often get jobs as traders (e.g. derivatives traders, etc) for banks and brokers or become engineers, scientists or accountants. Those who are unable to break into any of these professions often become teachers and then they are forever complaining and whinging that they are not earning as much as their comtemporaries.

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I thought someone as educated as this teaher would be able to write a more intelligent letter.

A lot of construction and even the university educated construction workers are now on the dole , those that make you any happier?

Anyone with any qualification can tell you he wants anything to do anything.

When people stop paying the builders these prices.

This guy will be back in 24 months time complaining about the negative equity he is in.

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Teachers.tch :unamused:

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I wonder what margin the builder is making on that 165K?

Also, the builder is entitled to charge whatever he likes. Its a free market. Whether he gets the business or not is up to how canny the consumer is. My parents got a lovely extension built on their house for 30K while some chancers quoted double this.

A teachers pay scales are fairly rigid and there is not really any scope for risk taking and corresponding reward. In general, your salary in the private sector is based soley on your value to the company, not how many years training/experiance you have.

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edit

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€53k for a bleedin teacher?

No wonder the country is fubared.

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sorry I got confused , I will edit my post

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So what happens when the Govt doesn’t have the funds to pay these wages (which is starting to look likely)? Do they just borrow more and more and we get fleeced with higher taxes?

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There is a pretty large chip on view there. As has been commented on already this would appear to be whinge 3a from the teaching manual. It is more usual to see it wheeled out during the Easter conferences.

On the substantial point, I know anecdotally from neighbours that builders are hard to get to do extensions. However when I mention this to my father in law who is in Donegal he says they are all up there scratchin around with nothing to do.

So it would appear that our teachers predicament could be easily altered if he/she applied their vast, highly edumicated and super intelligent brain to the task.

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No we’re a low tax economy.
We get fleeced through new “charges” instead.

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Hmmm. I think I see a solution here.

Our teacher friend needs to stop teaching and start building houses.
They can start with their own as kind of practice like.

How hard can it be? You don’t even need a third level education.

-Rd

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A cousin of mine wanted to put an extension onto his kitchen and was quoted 300k. He ordered the builder out of the house immediately.
It seems that to compensate for falling volumes, the builders are resorting to the classic Irish trick of increasing prices to “compensate”.

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firstly a teacher might not understand ‘profit’ as they don’t ever have to generate any, in fact of all sectors of society i have found that teachers are perhaps the least likely to understand business concepts because they can’t be fired and they never have to actually hit any ‘targets’ or generate a profit margin on what they do. The only ones who have any grasp of this tend to be teachers of business or economics and they are in the minority - i should state that this opinion focuses on primary/secondary school teachers not university level.

all of that aside: build prices are coming down, i have already seen stage payment mortgages actually requiring less than initially applied for because of changes in quotes, maybe for that particular home it doesn’t make sense for a builder to take it on for less, in that case the writer should wait it out and see how much they can get it done for in 6 months time when things have dropped even further, construction materials were expensive because of high demand, as demand for them wanes the prices for timber etc should drop and thus his overall cost.

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I personally believe that build costs are as low as they can get at the moment. Builders are literally paying people to build. (i.e. they are charging below cost so that they will have money coming in). It is causing a problem for Quantity Surveyors as how do you overlook a price like that, however if the builder is charging below cost then there is a possibility that he will go bust during the project and that causes serious problems.

Builders pricing below cost can only last for a short while.

Regarding building materials, the market for this is global and inflation is likely to continue for the foreseeable future. If people don’t want timber here, it can be sold in France. Building Material price inflation will not be affected by the slowdown in Ireland.

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I am stunned. As that is what a teacher is earning, I have reevaluated my position and I am going to leave the career path I am on. I am working in the ‘knowledge economy’, I have my ‘4th level’ qualifications but I no longer see any reason to bust my hump to carry other people. I have the very kind of skillset I keep hearing Ministers bang on that we need to increase the numbers of. Well, now they will need one more. I despair.