NCB first out of the blocks to doubt 30,000 for 2009


#1

rte.ie/business/2008/morning … 829ncb.pdf

Normally it’s Goodbody who seem to have their fingers on the pulse but this time NCB say that with circa 15000 built in the first half of 2008 that 30000 for 2009 seems optimistic. Interesting to see the growth predictions so for 2009 after this.

Makes you wonder how long more the doomsayer and the Good versus Evil crap can continue for. Is reality dawning, we didn’t talk ourselves into recession we built ourselves. I have a suspicion that in a years time Cowen would be happy if all he had to face was a lost referendum.


#2

We BUILT ourselves into recession .

With 350k homes either lying idle or grossly underutilised at present then Its The Empties Stoopid and will be for years.


#3

and the main question is… are we still adding to it…?

is there any way of knowing if 15,000 have been bought (by FTBs) in the first half of 08…?


#4

One thing to realise is that a significant proportion of these 15,000 were bought in 2007 or 2006 (possibly some in 2005).


#5

That’s it, anyone with a bit of cop could see that we were indeed burying ourselves in bricks and morter, housing building became the economy and now its legacy will be that having collapsed it leaves the economy in a shambles.


#6

Emigration will do much of the rest in rural areas Michael , same as it ever was I fear.

That too will severely erode the local tax base for local authorities …I mean business rates …and at a time when central funds are tight and when disbursement of these funds is not as prompt as it was .

A dramatic contraction of local authority discretionary expenditure …already underway even as council overdrafts rise nationwide will also have a huge knock on effect on the civil sector which relies on local authorities to keep their base load work up …doing footpaths and roundabouts in between big jobs .

Lots of allegedly ‘planned’ and ‘budgeted’ civil works next year will be scrapped as the cash strapped authorities rob their banked development contribution funds to keep their overdrafts down .

Add to that the lack of central funds for sewage and water schemes that are designed and ready to tender.


#7

I agree with what you say ‘2 pack’ but it has always been insisted that the Developments Contributions in Laois were ring fenced so it will be interesting to see what is going to give as with the Local Elections only six months after the December Budget I cannot see the ruling group increasing business rates by any great amount (The group been made up of FG, SF, lab and Indeps)

Fianna Fail will I expect have a field day on this one.

At our last Council Meeting we were told by Management that with debts of €8 million owing on the Councils waste facility that the Management had no option but to look at what should be done as a matter of urgency.

This urgency, I think is a way of dealing with the Councils coming financial problems and in the light of (I think Cavan) another Council selling their facility for approx €40 million I believe this is their angle.

AES which is now owned by Bord na Mona and has a facility beside the Councils facility must be the likely opportunity that Management has in its sights.

As to whether or not to sell the facility is a reserved function for the elected members this too will cause much controversy.

Personally, I think reform of the Local Authorities is the only way forward, they have their hands in everything and are masters of nothing. They should be forced back to delivering basic services for the County and back off getting involved in glamor activities like tourism etc and other areas that they neither have the resources or the expertise to deliver.


#8

How quickly NCB forget - thepropertypin.com/viewtopic.php?t=3889


#9

Data from 1970 - 2007 here - environ.ie/en/Publications/S … tatistics/

2008 & 2009 values are guesses.

Earlier projections - thepropertypin.com/viewtopic … 9741#59741


#10

That graph is incredible (as well as being quite realistic in its predictions IMO).

IMO its fair to say that not only is it a graph measuring the crazy level of housing completions (in particular those of the past decade), but it could also be viewed as a graph measuring the collective lunacy which ran unchecked throughout Irish society during the same period, peaking as it did around 2006.

The mind boggles.


#11

What you are looking at is over 100,000 more people out of work in 12 months.


#12

The bubbleistas are always going on about ‘long term sustainsable demand’ for 50-60,000 a year.

Looking at that graph it looks like* real *‘long term sustainable demand’ is about 25,000 a year, with potential for signigicant undershoot over the next few years as the massive bubble overbuild works it’s way through the system.

It also means that all the jobs lost in construction are never coming back. This is no blip.


#13

50K a year is loo la stuff the uk built aroung 200k at the heighth of their boom

we then get bullshit about age of housing stock and average house size any kind of duff statistic to sell themselves the 50000 a year figure.

nonsense

people just stiiiiiiil don’t get it.

200k unemployed by end next year


#14

Exactly…

Rudimentary maths tells you, 1.5 ish mln current housing units, growing at 1% population growth = 15k new units a year

Ok, deviations around this will occur as immigration picks up, the baby boomers kick off, need to rebuild certain housing units etc…But to justify >50k a year continuously you need to be really dumb

We were building 5x the amt of housing stock per head as the US at the peak. And the US has alot of homes which have a 10 year shelf-life

Also, now the baby boomers mostly own homes, immigration is looking like its risking going back to emmigration and there is a massive overhang of unsold stock… even 17k a year is too optimistic. The trend for the next few years will be way below that

Its simple…95k a year was NEVER justified. Alot of the excess housing stock in 05/06 was hoovered up by speculators, who now have trouble renting at a reasonable yield and many of those are now trying to dump and cut their losses. SUpply, supply, supply

At the peak in the Nasdaq there were people who justified the valuation based on some silly “new economy” metrics. The credit bubble was justified by infinite petro-dollars, china and its defationary force etc etc

They were all proved myths. You cannot escape common sense for too long without being caught out.

At 95k housing units a year, there will always be some muppet argument from some perceived expert as to why it makes sense.

People just need to learn to sit back, think about things sensibly and if it doesnt make sense, dont get involved. You may look silly for 2/3 years, but you could save making the most costly financial decision of your life.


#15

does anyone know what the increase in the number of households was since 1996? surely it would be the increase in number of households rather than population that would tell us how many new houses were needed. i’d guess it would be around 15,000 annually but i might be totally wrong. anyone know the exact figure?


#16

cso.ie/statistics/numprivhseholds.htm


#17

Household formation was hitting around 40k per annum during the boom, with population growth running at about 100k+ per year (~2.5%). If population growth drops to only 1% (~40k) per annum then with an avg. household size of 2.6 that would mean fundemental demand for housing of about 15k per annum. That is of course ignoring the current over supply. :exclamation:


#18

I did a load of the aggregate household stats HERE early this year .

Taking the average household size of 2.8 in 2006 at census time and safely assuming it had have fallen to 2.7 by Feb 2008 based on the census and trending off that …we therefore ‘need’ at most 1.61m homes @ 2.7 persons per unit where we have more like 1.96m now .

This is how I check my empties figure, population divided by average household size…adjusted for household size trends…tells us the absolute feasible demand and then subtract that from the total stock to get the empties…admittedly including holiday homes which are only empty* most* of the time.

The key points are.

1*. Our average household size is indeed shrinking *.
**
Household sizes at the last 3 censii were :

3.15 in 1996
2.95 in 2002
2.8 in 2006

A decline of about 0.04 a year with rounding up if in any doubt**

  1. We are building way to fast to absorb this shrink even with immigration factored in .

**So thats 1.94m houses out there now (Feb 2008) and habitable.

So we take 1.61m used out of the 1.94m extant and we have 330k empty ( Feb 2008 mind ) **

Its 1.96m total now seeing as we built over 20k houses since I did those figures in February up to end 2007 … 1.94m then + 20k net adds even after retiring a few .

I assume these net adds are ALL empty so 330k empties in Feb 2008 + 20k empties since = 350k empties .

That’s from calculating the real demand based on household sizes .


#19

The below url is to the CSO database direct with the number of households in detail but only recorded on census years by the looks of things. You’ll have to copy in the whole link. The url tags don’t seem to work for this?

cso.ie/px/pxeirestat/Dialog/varval.asp?ma=CNA29&ti=Private+Households+(Number)+by+County,+Year+and+Size+of+Household&path=…/Database/Eirestat/Census%20of%20Population/&lang=1


#20

For empties, take a look at table 21.8 of the following document.

cso.ie/releasespublications/documents/statisticalyearbook/2007/Chapter%2021%20Housing%20and%20Househ…pdf

The information is not contained in the table available in the 2006 statistical yearbook or previous which has the same title but doesn’t break the information down in the same detail. Maybe it could be worked out but it wouldn’t be easy. An email to the CSO could help.

cso.ie/releasespublications/other_publications.htm