In 2006 Construction accounted for 25% of GDP or so …not GNP
In 2008/2009 GNP shrank by 25% as the construction industry imploded. They had left us with 350,000 empties in their frenzy of ill advised building.
35% of bank lending in 2006 was construction related. We need to retire 35% of our banking capacity. Anglo and INBS need to be destroyed and wiped out, we do not need them any more and never did …seeing as they mainly funded the building of empties.
We also need to demolish about 100,000 units to achieve stability in the housing market, let that be a start not bloody NAMA. The only market to corner will be the topsoil market to cover these up
I have a serious and naive question about this: what is keeping the empties off the market? Even if they are all sold at a loss, surely it’s more than they are earning now?
I would imagine that they are the wonderful collateral being used by the banks as security for the bankrupted developers. To put them on the market would only depress the market more and allow people to buy a reasonablly priced house, and we couldn’t have that now could we in this so called capitalist society?. And while they rot into the ground we will have to prop up those same banks with taxpayers money… Ah yes a great little country we live in indeed… and all the while the people sleep… A bunch of full on self flagellating alcoholic masochists…
I completely disagree with demolition.
We need our costs to come down.
Property prices were the main instigator of our higher costs, both in terms of the rent businesses had to pay, as well as the higher salaries required by employees to pay for their artificialy high rent/mortgages.
Lets use this excess supply to force down property prices and with it, our costs.
This will enable the country to regain its competitiveness more quickly and grow once again.
+1. All that has to be figured out is a mechanism to enable homeowners in negative equity to trade their properties and maintain their debts. Many of them will go bankrupt, but what of it? We have an opportunity to lower the cost of living in this country, improve our competitiveness and release huge amounts of capital for better uses than over-paying for bricks and mortar.
Agreed. But what hope is there our FF overlords, ballsey property moguls to the man, will put the national interest above their own. Economic treason indeed.
For the life of me, I cannot understand the demolition argument, Every property in Ireland has a clearing price. The cost of demolishing is not too far off the cost of construction, given the amount of money that has already been spent on Limerick Regeneration with nothing as yet been built. I know there is probably an element of “Jobs for the Boys” about it, with probably more being spent on Admin than actual graft.
I see your point but in the case of some developments, those that are badly built, built on bogland, in the middle of nowhere with no infrastructure, those in towns decimated by unemployment with no future investment likely, then isn’t the best option to get rid of these?
I’d agree with Pyramid, put them on the market for 40K, they’ll shift. At least its something back. People can buy them as holiday homes even if its just a hillwalking base or rural retreat, in some cases very rural.
In the past the banks couldn’t take a write down on properties as it dragged the whole loan book down and brought them back into insolvency. I’d think that will change over the next 12 months as they get hard cash from the Gov. While I rarely agree with the hobbit, I think this combined with rising rates could move us along the scale. Yippee, only 6 years to go to the bottom.
Ill buy one cheaper than it would cost you to demolish it. Youd even make money as opposed to cost it. How is demolishing them going to help such a town? Surely a lower cost of living in such a town would mean it would be more competitive, with broadband and many jobs not even requiring road links then such places could actually become productive
They should be sold and the decision to keep or demolish made on the open market. If the market decides that it is better to demolish then that is fine. If some politicians decide to demolish, that’s not so fine.
In Detroit, it costs about on average 10,000 dollars to demolish houses (also dependant on legal fees). I can imagine the builders demanding 20-30k from the government per house. Another bailout. This should not happen. The market should decide. Like in the case in America, some people volunteer to take down the houses at no cost to the taxpayer.
If we identify the houses with the least chance of ever selling because they are badly built or built on bogland, or in the middle of nowhere with no infrastructure, and broadband is part of that infrastructure, then would that not give the other properties a better chance of being sold at some point?
A glut of badly built ghost estates is not going to help any town any time soon.
Yes, it would. It would artificially restrict supply, and push up the value of all other houses in the area. It would mean that families who would like to buy in the area would continue to be priced out of the market, and it would line the pockets of the evil property developers and landlords who have made home ownership impossible for young people in Ireland.
The last thing we need in this country is to further reduce the supply of housing. There is almost nothing available on the housing market that any normal person, borrowing a prudent multiple of their income could buy. We desperately need much, much, much more supply at a price that people can afford. The last thing we should do is knock down houses at a time when people are desperate to buy and almost nothing is available at a price it can be bought.
We have a vast surplus overall and the vastest is apartments in Kilbeggan type stuff. We need to take 100,000 units out of the market like I said. That leaves us with 250,000 of which 100,000 are or will become holiday homes and 150,000 will be available for use.
Don’t forget that our ENTIRE rental stock ( occupied ) is only 150,000 units and many of these renters are students who will not rent in Kilbeggan …ever …but may buy a starter home there if they ever get a job.
150,000 units is enough of an overhang to tank the rental market in most of the country save in some college towns.
People should also accept that leaving a house empty for 3-5 years while we dither will inevtably render it unusable from damp and burst pipes and decrepitude and that is a guaranteed outcome if these premises stay in the ownership of builders with no money to maintain them.
The Detroit analogy is crap,there they end up stripped first then burnt out and finally bulldozed anyway at a cost of much less than 30,000 per unit. Burning concrete out is a tad harder but some of our citizenry would merely see that as a challenge to which they shall rise.
Ye should all just accept 2Packs logic and prepare to flatten those empty apartment blocks save in areas with 15% empty or less such as Dublin or Galway CITIES. There is and shall be no demand in the outer commuter belts and dereliction is absoluteley guaranteed
This country has* some* realistic hope of improving its food and agriculture industry,particularly for domestic consumption and perhaps rekindling the issue of being seen as a "Green" producer of foodstuffs but ONLY if we are prepared to return to the reality of accepting the Rural/Urban divide in its reality.
As a society we really DO need to get a more realistic handle on ourselves.
I just long for the day when I see an EA Billboard advertising a development of …“Perfectly Ordinary 3 Bed Semi-D`s,built to an acceptable standard but definitely NOT Luxurious,unless running water and an upstairs WC counts as that ?”
From my perspective we can and should be contemplating a return to the days when the Farmer and The Townie could be friends but yet knew they were different.
