Housing Housing everywhere …

Housing Housing everywhere …

We thought you might like to use this Friday’s post as a chance to get some ideas off your chest.

Here is the issue: There are lots of empty houses out there – 179,000 of them in 2,881 ghost estates for a start, according to the Department of the Environment. The Central Statistics Office puts the figure at 294,202 across the country. Meanwhile Savills claim (that in Dublin) empties have dropped 50%! From 11,000 in early 2010 to 5,400 now.

There is a ‘natural vacancy rate’ in any market, generally this may run anywhere from 4-9%, we don’t actually know the natural vacancy rate in Ireland so we can take a figure near the lower bound at 5% (which takes c. 100,000 houses out of the ’empties’ figure) and in doing so we are not far off the Department of Environment figures, it also puts the CSO figures in that region as well.

So what do we do? Or perhaps, what would YOU do?

I’ll start the ball rolling with a few ideas….

For empty apartments, the simplest thing to do is knock 2 apartments into 1 large one. People simply have no appetite for the size of apartment that was built during the boom. But if they were much bigger? Then you might get some interset, it would cause a loss for NAMA but that isn’t to say that such a loss wouldn’t arise anyway. If you were able to buy an 160sqm (c.1,725 sq ft.) apartment it may become an attractive proposition, that’s a bigger than the average house and with the reduced maintenance of ameneties (assuming management company are operational) it could be an attractive choice, it would also lower density in these developments meaning the stock available gets used up, there are additional car parking spaces etc.

Or what about the next idea…

We often hear about crowded ER’s in hospitals, why not offer visas to anybody in the world for 5 years if they are a doctor and then set up regional 24/7/365 clinics where the GP’s practice around the clock. In return they get a rent free house and the average industrial wage. Doctor visits would cost a nominal €5 and if they stay for the 5 years they can apply for citizenship and keep the house at that point (with perhaps a ‘no sale’ clause for a certain amount of time built in). The ongoing cost of the clinic could be supported by a site value tax. All you do is determine that there is one clinic for ever (for instance) 20,000 people, and that catchment area then becomes the area that gets levied, this spreads it out over larger areas in the country and more tightly populated areas in cities.

These are just two ideas of things we could be doing, we hope you have a few as well, it’s an exciting topic (don’t forget to critique either!).

Now, lets get those thinking caps on!
Karl Deeter


Karl is the Operations and Compliance Manager at Irish Mortgage Brokers in Dublin 2, he is also a resident guest blogger here at MyHome.ie

There are 24 comments for this article
  1. Fiona at 8:30 pm

    I think all are feasible but will our opinions be heard? I think Rent to Buy should be made available to all people renting whose landlords are looking to sell. Not only for new homes. I’ve no idea why it’s not alot more popular? The Rent to Buy companies are not pushing their idea because the builders/banks are still in ‘greed’ mode and are determined to hold out for as much as they can get in one lump sum rather than ‘on the drip’. The more people request the option of Rent To Buy perhaps the Rent to Buy companies will be buoyed by the response and maybe, just maybe someone will listen and the housing list (now standing at 11 years to house people) and those unable to save deposits because of high rents will have a chance to get on the property ladder. I know alot of people who would be willing to take a home and finish it themselves, i.e put in their own kitchens etc. if it meant they could have their own home. Surely builders with empty houses lying empty would be delighted to get them off their hands. Surely money on the drip is better than the noose of Bankruptcy handing around their necks?

  2. Anne at 9:30 am

    Allocate to people on the housing list,our government sources are being drained by rent allowance, just to keep property developers happy after all the brown envelopes they distributed. To many homelesss for the ratio of empty properties or do a rent to buy scheme.

    Anne

  3. angel at 2:52 pm

    cant beleive that i have been trying to buy a property in ire for 18 months, your banks are not borrowing even though i am offering 50% of the asking price. they are making it impossible to buy a property. the builder will crash they dont care the bank of ire would rather see this builder bankrupt than help him sell his propertys

  4. june at 4:41 am

    sell them , even at a loss, that has to be cheaper than knocking them. advertise them overseas, for investors.

  5. Jack at 2:22 am

    I am an Irish citizen living in Australia for 30 years and would love to invest in a house in Ireland and I have an idea which will both help the Irish economy and give us expats a little bit of our homeland.
    I would be happy to put a 20% deposit on a property if it was taken over by the Govt. and rented at a reasonable rent and managed by some authority.Subject to a credit check I would like a mortage from an Irish Financial instution at the current rates. After 5 years I would like the flexibility to either move into the property, continue to rent it or sell it.

    Imagine if the Govt. supported a scheme like this the hundreds of millions of euros that would flow into the economy and this could be used to finish some of these gohst estates and like me it would encourage the expat owners to return to Ireland and thus spend more money in Ireland.

  6. Pauline at 12:15 am

    Give them to the old folk that are living alone, and use the ground floor of the apartments for their needs, ie
    (a) a communal area,
    (b) a chemist,
    (c) a doctors surgery
    (d) a canteen
    (d) a Caretaker on site site
    (e) an entertainment area

    and whatever else that would benefit them, and buy their houses from them and charge them a percentage to move to a better place mentally and physically and then use their homes for the housing list or sell them, depending on the price/location etc.

  7. ZZ at 8:41 pm

    Karl,
    I think all in all the real factor is that has partially been said by many on this blog is that fact Ireland needs to drive new business to the country, which is also going to drive demand. In reality when amount of houses outweigh the demand, then you will always have an unbalance. So from a country stand point Ireland needs to demolish many of the buildings to change that imbalance, and they also need to start thinking out of the box….take the blinders off.

    So in areas that have some historical interest maybe they should look to get some of the major park owners (6 flags, Disney, and many others) involved to drive and create amusement parks in certain areas, that in turn will drive tourism, and drive new jobs, that in turn means you now have demand. Encourage people to come to Ireland; subsidize airlines to entice people; subsidize the hospitality industry to provide rock bottom hotel rates (that they can all survive on)….it is better than bailing out the feckers who got Ireland in this mess.

    As a country Ireland can not continue to milk the same people over and over; and I mean the people with the money. Think about it; the government says we have excess housing, so we want you to buy them…..well the only people able to afford them are those who already own homes or have the money(possibly; and this is a big assumption that they want to buy) but then on the other hand the government slaps them with a tax when they buy these waste estates. What they need to do is anyone who buys these waste apartments are “grandfathered” into a 0% tax on additional homes for life. It is these people who are going to buy; not the folks who can barely make an income; in fact these are a high risk to NAMA.

    So in essence there needs to something to attract both new owners and new business to Ireland. You can’t do one without the other in reality.

  8. loretta Schmidt at 6:04 pm

    All ideas presented are interesting and helpful except bulldozing and demolition, I see that as a waste. Certainly merging apartments and semi d’s is a good idea and would offer normal sized accommodation with some value for money.
    Putting the properties for sale and letting the market decide the price would be better than doing nothing.

    Helping to decrease the 100,000 waitlisted would be good and certainly providing homes for the homeless presumably with government subsidy has to have its rewards.

    Loretta Schmidt

  9. AlexM at 4:50 pm

    @Alison Kelly and related answer. Even if it was to work for only 1 or 2 estates, it could create such a pioneering “feelgood” factor that it would attract people, industries, resources and funding. Case in point: Adamstown, close enough to Dublin yet unfinished and without “a sense of place” becasue there are no community buildings and only 1 bus going to town (unless you take the train, which is only useful if you work near a train station). The buildings, though, seem of good quality. Now solve the mobility issue by providing sponsored community transport (rent EV’s with renewable-power sponsored charging units), solve the community issue by encouraging the creation of local eco-friendly businesses, and start to create a really vibrant village that people will WANT to move into. Repeat the recipe wherever needed …

    There will be places where it won’t work. I have seen apartments in Newcastle which were scary by day because there was absolutely no life. And we have Falcon View in Blanchardstown that stands proud and silent like a scary giant. Those are the scars of greed, there is little to do for them …

    I am still amazed though at some of the unrealistic asking prices out there — 550000 for a 2-bed in Castleknock … interested parties should realise that’s an asking price is just that — asking. It does not mean that you’ll have to buy it for that price.

    Rent to buy should be encouraged. Yes, if the renter walks out of the deal, they lose what they have put down, that’s fair enough — they would have paid rent during that time anyway. And this will remove the element of volatility from the market, and other dubious practices like gazumping.

    Suggest to watch again the last instalment of that beautiful RTE programme where renewable energy was shown as being our future: someone tell Nicholas Johnston to stop whining, and let’s start to rock this dock!

  10. mary mc gann at 3:58 pm

    i feel that there are far too many apartemtns in dublin also i cannot find a decent site for myself. therefore building one apartment the zizew of two would help space wise and storage wise. also there need to be a lot more light going into the building of these apartment

  11. Kevin Flood at 3:57 pm

    I have contacted Savills and nearly all estate agents, for a 2 bed apartment. In Mt. St Annes, Trimbelton and beside new Dundrum centre.
    THere are numerous vacant blocks of apartments.
    in all these developments
    I have had no response and no follow up, all seem to be retaining their high values. They seem to be waiting for a market upturn.
    Regards Kevin Flood

  12. Jasmina Prnjavorac at 3:41 pm

    Sellers need to reduce prices ; ghost estate houses are for sale but at above market values. If owners / developers would accept the inevitable loss on their property investments, the houses would sell. Currently the houses are unattractive not just from the empty and dilapidated estate environments but from the prices which have not been significantly reduced since first being placed on the market.

  13. karl deeter at 3:01 pm

    @Denise Courtney – Would you envisage that if they did this ‘rent to buy’ and didn’t go ahead and buy it that they’d lose the money they put in? And how do you set the ‘buying price’? Interesting idea.

    @John Sherwin – In the USA the railroad bubble (1870’s) resulted in lots of track being there that equally could have been demolished – or utilized! One of the upsides of a housing bubble is that there is a lot of housing infrastructure intact. So when you say ‘demolition’ do you mean places that are half brown-field sites or up to roof level? What about selling them off cheap to people who complete them and they can defer having to draw down a mortgage for a few years until credit becomes available again?

    @Nicholas Johnston – if you are going to get a house for next to nothing it might be worth at least offering it out to people! A lot of people in cities would see the attraction in living in the countryside. Agree that as a ‘mass’ policy it would be an error.

    On the natural resources front I disagree. Richard Tol (energy economist) has said in the past that Ireland is the world number 1 location for wave energy. Another energy consultant has described Ireland as the ‘Saudi Arabia’ of renewables. The sad fact is that for now we don’t have the actual technology/infrastructure – but neither did the middle east for oil extraction in the past! We have lots of future prospects that look bright!

    @ZZ Building cost on apartments (materials/labour) is often c. €1,300 per metre so starting again would be expensive, knocking buildings down on the other hand is very cheap (by comparison).

    @Laurence Kiely – interesting thinking, but in terms of cost – a lot of the pyrite buildings are privately owned, so do you give away the new ones or swap out the mortgages or something?

    @Alison Kelly – that might only solve one or two ghost estates but what a good idea?!

    I’ll try to get to all comments (might take a while!)

  14. Jim at 2:50 pm

    The market won’t recover until prices come back down to sustainable levels, i.e. 90% mortgage for 2 x yearly salary or 1+ 1/2 times combined salary. It has to be sustainable.

  15. R Storey at 1:55 pm

    Sellers need to reduce prices ; ghost estate houses are for sale but at above market values. If owners / developers would accept the inevitable loss on their property investments, the houses would sell. Currently the houses are unattractive not just from the empty and dilapidated estate environments but from the prices which have not been significantly reduced since first being placed on the market.

  16. Alison Kelly at 1:49 pm

    Convert empty estates into gated timeshare communities with Zip Cars and public transportation links all reasonably priced so that those of us who had to leave Ireland for work could afford to go home on extended stays! Alx

  17. Colm at 1:13 pm

    I think they are a good couple of ideas. I would not only knock apartments together but many of the semi-detached houses built at the end of the boom are not much bigger than apartments. Knocking side by side houses together would turn a cramped 3 bed house (master, small double room & box room) with a tiny garden into a much nicer house with 4 reasonably sized double rooms and a garden kids can actually run in.

    Also could some apartments or houses be turned into community spaces. There free or heavily subsidised rent could be applied to essential services (doctor, creche, citizens info etc). The big problem with a lot of these estates is they are miles from required services. We can’t move the estates but perhaps we can encourage the service to come to the estate. It might need someone to manage and look after the building but perhaps the house/apartment next door could be given to someone on the dole to become the caretaker of the property.

    If an estate is largely finished but the houses are unsold why not turn it into a start up hot spot. Assign buildings within the estate rent free to new businesses based on their business plan. They could be offices or small workshops where new businesses could get a start. Make the estate a designated low tax zone to further encourage startups. I’m not talking about a new solicitor or accountant looking for an advantage over their competitors in the local town. These would be vetted based on the business plan.

    If phase one of the estate is finished and phases two and three are not even started and still largely green spaces why not divide them up into allotments for people to grow vegetables. Offer them first to residents in the estate and then to the wider community. Perhaps an unsold house on the estate could be used as a community co-op for people to sell their excess in times of plenty.

    Where an estate is unfinished to a point where it will never be habitable but a lot of the ground works (basic road, basic services to the gate of the estate, some half finished structures etc) are in place why not look at other uses. If it is in a windy spot could wind turbines be erected. If it is in an area that attracts tourists could it be turned into a caravan park? Coule the local sports clubs use it for a pitch or training facility (although I would insist that it be a municipal facility and no one sports organisation has exclusive rights to it).

  18. Paddy, predictor of lower prices to come at 1:07 pm

    Empty properties are to be treated the same as any other; put them up for auction without reserve and let the market decide. Now that flats in Dublin are down by 60% on the ridiculous peak of 2007 we start to get closer to real market value, but wait, it’s a buyer’s market, don’t buy unless you get an even lower price. 15% to 25% of peak rip-off price sounds about right to me for the junk that has been built.

    As for buying two dog-box flats and converting them into one, that’s possible but only when the price is right as you have to allow for paying a builder, project manager, architect, solicitor, and something for your trouble when dealing with that lot (and a holiday afterwards to get your head right again).

    And don’t forget to very carefully check-out the complex management set-up; are all owners in the development paying their levies? Is the management company doing its job properly and at a fair price? Is there a sufficiently large sinking fund in place for the major expenditures that will come along in future years? What is the standard of construction of the development; will it be high or low maintenance in the future? Can the owners easily dump the current management company and employ a new one?

  19. Tax slave in private sector at 1:07 pm

    Bigger apartments = great idea once they have adequate parking and amenity/leisure areas for families.

  20. Laurence kiely at 1:03 pm

    Demolish the overhang.
    First identify all of the compromised buildings e.g
    Pyrite affected etc and earmark for demolition. Consolidate these and homeowners in ghost estates into one or two viable estates in the locality and then demolish all estates which will cost more to remediate than the current market value of the property.
    Eliminate the overhang in supply and restore the supply/demand dynamic.

  21. ZZ at 1:02 pm

    I think both of your ideas are great; you could go so far as offering to folks a low rent option in the existing apartments to get some return on the investments, rather than trying to sell them. I know that the economy dictates who and what price you will get, but in addition; and depending on the locality to many of the hospitals and care centers; you could offer Nurses also low rent if they don’t have their own places.

    That being said though, some of the apartments from what I hear are so small you couldn’t swing a cat in them. TO convert two or three apartments to make a large one; it may be cheaper to knock down the buildings and build new larger ones.

  22. Nicholas Johnston at 12:53 pm

    Here are a range of solutions:

    Some of these properties should be used for council housing.
    There are currently 100,000 people on a housing waiting list.
    One issue with council housing is that these area’s become run down, and are breeding grounds for crime. It should be made a lot easier to evict those people who cause problems in these areas. Normally it is only a few bad apples that cause most of the problems.
    Unfortunately a lot of the vacant accommodation is not close to employment, Examples being Cavan, Leitrim Roscommon.
    A solution maybe to offer incentives to people who say live in Dublin in council accommodation close to the retirement age to move to these area’s where there current accommodate is given to a person on the waiting list.
    Another solution would be to promote particularly vacant holiday homes in the UK and elsewhere to people who are again looking to retire somewhere quiet. A lot of people from UK have moved to Ireland from UK to date. The low prices would offer a major incentive.
    However even with suggestions I have above a very large amount of these vacant houses should be bulldozed as they will never be sold.
    Due to the highest Debt levels in the world and overall a poor record the Irish economy will never recover.
    Ireland has been an economic failure up to the 1990 , with the growth levels in Celtic Tiger largely False.
    Ireland has no driver of growth in the long term, There is almost no natural recourses, The people are at best of average education and will levels will further into the future as there no money to maintain high education standards.
    Culturally Ireland has no attributes that lead to a successfully economy. In Ireland you are successfully by who you know no being the best.

  23. John Sherwin at 12:46 pm

    I believe that many of the developments are just so awful that demolition is the only way to go. A lot of the smaller apartments could be merged and that might help. Some of the boom developments will never work unless someone attracts industries to the areas where they were built. There are some towns with almost as many apartments as there are residents. This is crazy and needs some radical thinking such as locating industry there as a way to utilize the apartements. What about say a tax free period for industry locating those places with a reversal if the industry pulls out

  24. Denise Courtney at 12:35 pm

    Why not try reduce the numbers on Council Housing Lists by making the vacant properties available to the people waiting to be housed or make them available through a Rent to Buy Scheme which would also be open to single parents working part-time/or on one parent allowance. I know plenty of people who would love to be able to buy their own home but who are currently renting because they are only working part-time and on one parents allowance and therefore cannot avail of a mortgage. They pay rent every month so why not change that to a mortgage?