Northern Ireland

[pod]

According to Fubar over on Global it's May McFettridge.

I think the appearance of such a global superstar would explain the queues.

Might go myself to see if I can catch a glimpse.

[Belfast Boy]

6 people queing up waiting for it to open

Now that the crash is well underway - maybe it was 6 landlords queing up to sell their buy-to-lets.

Edited June 2, 2008 by Belfast Boy

[FrustratedFTB]

Now that the crash is well underway - maybe it was 6 landlords queing up to sell their buy-to-lets.

I wouldn't be surprised if people are buying at woodbrook. The price differential with other properties in the Lisburn area is fairly great. The release of this development has caused a reduction in many others as there was just such a gap in prices. As I said before in other posts this development has been in planning since before 2000 and so they probably are not as hamstrung by the price they paid for land like other developers. I haven't got the time at the moment but there are many 2 bed apartments sitting unsold around Lisburn for around 185k and they are selling their 2 bed apartments for 99950!

for some people who want to buy a house never mind what is happening in the market they might see it as their only chance. Given the size of the development, 2000 homes over the lifetime of the development, I believe six is hardly a sign the market has turned! Just read the business section of the BBC and see all the negative News around B and B and mortgages such as lowest ever on record etc and Nationwide increasing rates still further today!

The release of this development in my opinion has caused the likes of the Thaxton Mill Gardens and Mornington developments to reduce their prices recently by big amounts.

[pod]

I haven't got the time at the moment but there are many 2 bed apartments sitting unsold around Lisburn for around 185k

http://www.propertynews.com/results.php?s=46457371&p=1

[headmelter]

http://www.propertynews.com/results.php?s=46457371&p=1

Are there ANY sold?

Edited June 2, 2008 by headmelter

[HPCwhen?]

As I said before in other posts this development has been in planning since before 2000 and so they probably are not as hamstrung by the price they paid for land like other developers.

I know of one big name developer who has expressed the view that new build prices will not fall further because "builders cannot reduce prices further". I think this betrays a basic misunderstanding of the housing market. Prices are falling and will continue to fall. If builders can't reduce prices because they over-paid for land then they will got bust. Simple as.

[talksalot81]

I know of one big name developer who has expressed the view that new build prices will not fall further because "builders cannot reduce prices further". I think this betrays a basic misunderstanding of the housing market. Prices are falling and will continue to fall. If builders can't reduce prices because they over-paid for land then they will got bust. Simple as.

I think you hit the nail on the head.... if they reduce they may lose money, if they dont, they go out of business. Simple.

[headmelter]

I think you hit the nail on the head.... if they reduce they may lose money, if they dont, they go out of business. Simple.

Developers remain greedy and many will go under. The reality of the current situation hasn't really sunk in yet. IMO.

[talksalot81]

Developers remain greedy and many will go under. The reality of the current situation hasn't really sunk in yet. IMO.

It shocks me if you are correct. These guys are 'at the coal face', they see the evidence right in front of them. If they truly have not grasped the situation, their intelligence is at a level that makes me wonder just who was daft enough to give them a start in the business world!

I would have thought that the strategy for any developer is so simple as to be trivial. Survive. If they succeed, they come out of all of this with a fairly clear field because most of their competitors will have gone.

Edited June 3, 2008 by talksalot81

[FrustratedFTB]

Even in Insight last night a developer was blaming the banks and co-ownership for not giving money to FTBs to buy his properties - he had reduced a little and thought the banks should go a bit further and lend more to them. I think it was Hagan homes the guy was from - he just couldnt see that he would have to reduce further to catch a buyer. It was the same with the developer at Lisnaskea - ghost towns that he had built and I've no doubt people willing to buy at affordable prices but the two couldnt match up. The auctioneer spoke of developers buying marginal land in the back of beyond for 1million an acre and more or less said they were off their heads - its only worth a fraction of that now. They would never be able to build affordable houses at those land prices.

Yeah and I think that the person went on to say that the land was now only worth 330k odd!

[Traktion]

Even in Insight last night a developer was blaming the banks and co-ownership for not giving money to FTBs to buy his properties - he had reduced a little and thought the banks should go a bit further and lend more to them. I think it was Hagan homes the guy was from - he just couldnt see that he would have to reduce further to catch a buyer. It was the same with the developer at Lisnaskea - ghost towns that he had built and I've no doubt people willing to buy at affordable prices but the two couldnt match up. The auctioneer spoke of developers buying marginal land in the back of beyond for 1million an acre and more or less said they were off their heads - its only worth a fraction of that now. They would never be able to build affordable houses at those land prices.

Yeah and I think that the person went on to say that the land was now only worth 330k odd!

As we were discussing on another thread the other day, the land prices are likely to fall first and hardest compared to property. This is using the last crash as a case study and some common sense about there being a lag between land prices and house prices (the latter coming after the former).

[Belfast Boy]

Was reading one of Dave's comments on the UTV website. I like his style. He has some very good points and puts them forward in a reasonable way.

However, in his opinion, we are seperated from the UK market. He thinks that we should watch the Republic to see where our housing market is heading.

While I agree that southern investors, with euro mortgages, helped cause the boom here. My opinion is that it will return to a local, owner occupier housing market. It will be local incomes and mortgages which will determin Northern Ireland house prices. This market will be linked to UK interest rates a, UK inflation, Sterling. I really doubt if the Republic of Ireland will influence how far our house prices will fall to.

Discuss.

[Jacko-79]

Apologies if this has already been posted. http://www.belfasttelegraph.co.uk/homefind...icle3760823.ece

Its the headline article on the homefinder section of the BT website - I luuurve the title "Buy-to-let boom goes bust". Very bearish for Homefinder!!

[JoeDavola]

I saw a banner at the bottom of the Woodstock Road in East Belfast that looked interesting, something about a new build where the building is named after you??

Didn't get a chance to read it properly as I was passing in a car but just thought I'd let everyone else know in case anyone is in the area and can check it out or maybe even photograph it with a camera phone.

[pod]

I saw a banner at the bottom of the Woodstock Road in East Belfast that looked interesting, something about a new build where the building is named after you??

Didn't get a chance to read it properly as I was passing in a car but just thought I'd let everyone else know in case anyone is in the area and can check it out or maybe even photograph it with a camera phone.

I seen something similar mentioned in a property paper. So it might have been this...

The ad was in an x-factor style.

Buy a flat and have the chance to have the place named after you. So you'll be famous...er...like in x factor...

Edited June 4, 2008 by pod

[JoeDavola]

I seen something similar mentioned in a property paper. So it might have been this...

The ad was in an x-factor style.

Buy a flat and have the chance to have the place named after you. So you'll be famous...er...like in x factor...

Yep - I called past it tonight so can confirm, the deal is:

Buy a luxury house with us, and have a 1 in 18 chance of naming the building.

Developers have reached new levels of desperation!

And yes, the advert was a rip off of the x factor logo, which shows the IQ of people it is aimed at.

What was interesting was that prices started at £99K - overpriced, but represents a drop in new build prices in East Belfast.

Edited June 4, 2008 by JoeDavola

[Jacko-79]

Hmmm - If I won I think I'd call it "Mugsville"

[BelfastVI]

Well, at least it would make a difference from every new development being named 'Lesley' whatever...

Everytime I see a sign that goes up on a demolished house site or ex-garage forecourt proclaiming 'Acquired by Lesley' - I begin guessing what the name will be this time...

Driving down Newtownards road it's Lesley this, Lesley that, Lesley the other - then it's Lesley Exchange 1 & 2 opposite central station - why not change the name of Belfast to Lesleyville!!

Can the developer not have a bit more imagination???

The Developer in question calls the schemes after his wife 'Lesley' - true love :

[BelfastVI]

Even in Insight last night a developer was blaming the banks and co-ownership for not giving money to FTBs to buy his properties - he had reduced a little and thought the banks should go a bit further and lend more to them. I think it was Hagan homes the guy was from - he just couldnt see that he would have to reduce further to catch a buyer. It was the same with the developer at Lisnaskea - ghost towns that he had built and I've no doubt people willing to buy at affordable prices but the two couldnt match up. The auctioneer spoke of developers buying marginal land in the back of beyond for 1million an acre and more or less said they were off their heads - its only worth a fraction of that now. They would never be able to build affordable houses at those land prices.

A number of things are at play here. New build has falling dramatically, compared to existing stock. Perhaps not as much as you would like but it has been dramatic. Just go to PN and list townhouses under say 180k in say Lisburn and compare what's on offer in the new build to the existing stock and think where you would rather buy.

Some posts claim prices for average house (900 to 1,000 sq feet) needs to fall to 3.5 x av sal (£21k) which works out at £75k. The figure is usually based on average household sal which I believe is £35k which works out at a mortgage of £122k. This is crude and in truth should take into consideration rising costs on fuel, food (&personal debt) etc and should be based on a % of disposable income, which I admit will deflate the above figures.

To build the standard house it costs the builder about £70 to £80k. Land will come down to £500k, and lower an acre (their are currently neither willing sellers or buyers at that level to establish a fix). At an average of 12 to the acre (standard housing) this will cost £42k per plot plus costs say £45. So before finance and professional fees and overheads the costs are now at say £120k. New building control regs and red tape is expected to increase costs per house by £15 to 20k (Solar panels, insulation, etc) All this plus finance etc will leave the house at £150 plus profit! (Profit - What’s that).

What can give to make the house cheaper land, wages?

On top of this we have Margret Ritchie's request for 20% of housing to be handed over to Social/Affordable. This will be the land for the house at nil cost and therefore will have to be added onto the other houses. All road/sewer infrastructure costs will be added onto the costs of development-usually about £10k per plot.

What has to give?

The point I am trying to make is this. Yes builders will do what they have to do (or are forced to do) to sell the houses they have build (some on land at over £100k per plot!). They will suffer losses and that’s part of the business cycle.

Houses have fallen dramatically and those that don’t sell (poorer houses/locations) will fall further. But the point i am making is that these builders will not start new houses to sell at a loss. They simply wont build them and the bank wont force/fund them to do it.

That will take 12 months to get to that point. The only houses selling at the moment are new build, as builders have reacted faster than the resale market. I cant see how the market can reach the place you say it will. Perhaps repo's, through a forced sale - but no-one welcomes that as there will be a horror story behingd it.

Hope this makes sense.

Please discuss.

[Sogy]

Hope this makes sense.

Please discuss.

It does. I think, everything is pointing to the new equilibrium with average house price somewhere in the 120K-140K range.

What will give to start building again? Land prices, this is a no-brainer.

BTW, the resale prices are beginning to give as well lately. Have been signing my new lease today at an EA office, talked a bit about the houses for sale too. A nice semi I liked as up for £195K, and "they would probably accept £175 or so" they said. I'll wait another year, until it's around £150K - that's what I am willing to pay for it. It's a bit above average too.

Of course, there are still some deluded sellers, but they'll come to their senses - just give them some time.

[BelfastVI]

It does. I think, everything is pointing to the new equilibrium with average house price somewhere in the 120K-140K range.

What will give to start building again? Land prices, this is a no-brainer.

BTW, the resale prices are beginning to give as well lately. Have been signing my new lease today at an EA office, talked a bit about the houses for sale too. A nice semi I liked as up for £195K, and "they would probably accept £175 or so" they said. I'll wait another year, until it's around £150K - that's what I am willing to pay for it. It's a bit above average too.

Of course, there are still some deluded sellers, but they'll come to their senses - just give them some time.

I have alowed in my figures for land comming down from £1.5m per acre to £500, and less per acre, in prime areas like lisburn. If it falls further to £300k per acre ( which land owners will not release IMO) this will only save £15k per house.

Good family housing, going forward simply cant be delivered for the prices you want.

[Traktion]

I have alowed in my figures for land comming down from £1.5m per acre to £500, and less per acre, in prime areas like lisburn. If it falls further to £300k per acre ( which land owners will not release IMO) this will only save £15k per house.

Good family housing, going forward simply cant be delivered for the prices you want.

IMO, the land is only worth what someone is willing to pay it. Either the sellers won't get their money or the builders won't get their land. This deadlock will exist until the price of new houses become affordable on an average wage, with a reasonable mortgage multiple (ie. 3-3.5x).

Essentially, the land cost is ultimately linked to the amount the lender with give to a buyer. If the lender won't lend, the home buyers can't buy, the builders can't build and the land owners can't sell. The price of land drove the prices up, soaking up the freely available money, and will now retract to next to worthless now that there is little money.

Also, remember that there is likely to be an overshoot. The appetite for property will hit all time lows (at least since the last bust). Repossessions will drive the prices down, perhaps to a point where it's worth less than it costs to build a house. Remember, houses in a logical world should depreciate in value as they age. All of which makes the news for builders even more gloomy.

[subby]

I have alowed in my figures for land comming down from £1.5m per acre to £500, and less per acre, in prime areas like lisburn. If it falls further to £300k per acre ( which land owners will not release IMO) this will only save £15k per house.

Good family housing, going forward simply cant be delivered for the prices you want.

going on the U.tv programme by Jamie Delargy, a long time property developer said that he is confident that land prices will reduce from 1.2 million per acre, his words, to 300k per acre in the Lisburn area. Other land auctioneers interviewed in the show have stated that already prices are at 600k an acre and plummeting. Land prices fell and are falling faster than house prices....think it's in the 3rd section of the show, see the UTV thread for the links

[getdoon]

if i go to the former east germany and build a new build house it will not be worth what it has cost me to build on the resale market

if i go florida and build a new build house it will not be worth what it has cost me to build on the resale market

if i go to the Costa Blanca in Spain and build a new build house it will not be worth what it has cost me to build on the resale market

why does the cost of a new build HAVE to at least equal the price of the build?

[Traktion]

Another thought - have margins grown bigger on larger houses? I can understand the difficulty in building a complete, small, house on a budget. However, it seems that larger houses have inflated in price by much more than the land space they consume or the building costs.

It's hard to find information on this after a quick google, but these sites show some interesting figures:

http://www.whatprice.co.uk/building/house.html

http://www.whatprice.co.uk/prices/building...of-project.html

Total cost of project 2-bedroom £42300-58500 per house 2005-01-20

Total cost of project 2-bedroom £560 per m2 2005-03-02

Total cost of project 3-bedroom £51700-71500 per house 2005-01-24

Total cost of project 3-bedroom £500-1600 per m2 2007-10-19

Total cost of project 4-bedroom £65000-91000 per house 2005-01-27

Total cost of project 4-bedroom £500-1600 per m2 2007-10-19

Total cost of project 5-bedroom £94000-130000 per house 2005-02-25

The figures are up to 3 old, but add 10% on and you have inflation well taken care of. To me, this shows that you should be paying 10-30k more per bed room. Clearly, this is a very rough price (with all other additions such as garage etc not explained), but it paints an interesting picture.

If the land prices continue to plummet, the price of building the house (rather than the land), will be able to dictate the asking price more. Essentially, on new builds the rungs on the housing ladder would close up, with the low end getting cheaper, but the higher end decreasing more. This, of course, would lead to a lower average price. Non-new builds would be forced to follow suite, which would further drive prices down too.

Thoughts?