18 YEARS of mortgage repayments BEFORE you pay for any actual construction costs!
Today we expose the reality of profiteering in the housing sector in the 26 Counties and of a system which saddles families with a lifetime of debt to fund the super-profits of the banks, land speculators, property developers, solicitors, estate agents, media outlets and other vested interests.
Unbelievably a family paying back a standard mortgage will make the equivalent of 18 YEARS of monthly repayments of €1,338 BEFORE they pay for a single brick, a single piece of timber, a single hour of labour or any other actual construction costs.
You read that correctly. The average family will pay the equivalent of 18 years out of a 33 year mortgage for non-construction costs!
Our analysis is based upon the latest home construction costings by the Society of Chartered Surveyors Ireland published in May 2016 for a 3-Bed semi-detached house in Dublin, combined with a typical 33 year mortgage.
( https://www.scsi.ie/documents/get_lob?id=885&field=file )
So what are these ‘non-construction’ costs that make up more than half of the repayments on a 33 year mortgage?
Over the lifetime of such a mortgage (including deposit, capital and interest) the average family will pay €100,888 just to cover the developers profit and the money borrowed by the developer during construction. That’s the equivalent of 75 months of mortgage repayments of €1,338.
The cost of sales, marketing and professional fees (estate agents, advertising, architects etc) will account for another €23,837 – the equivalent of 18 months of mortgage repayments.
Another €88,843 in mortgage repayments go to pay for the VAT and Levies that are paid to the central state and local authority – the equivalent of 66 months of mortgage repayments.
And finally there is the staggering €100,050 that will be paid by the average family over the lifetime of their mortgage to pay for the small piece of land that there home is built upon. – the equivalent of 75 months of mortgage repayments.
This is the reality of a housing sector that is dominated by powerful private forces – by private banks, by private landowners, by private developers, by private solicitors, estate agents, media outlets and others.
A reality where €180,000 out of the €330,000 construction costs of a 3-Bed house is made up of non-construction costs.
A reality where more than half of the €574,000 that a family will pay over the lifetime of a 33 year mortgage will go on non-construction costs.
A reality where the equivalent of just 15 years of mortgage repayments will go to pay for the labour, blocks, timbers, windows, fittings, fixtures and other materials that are required to actually build a house.
The current housing model in the 26 Counties is fundamentally flawed. It is incapable of delivering affordable high-quality housing for the bulk of the population. It has been deliberately designed to serve the interests of powerful vested interests ahead of the interests of the citizens who need a home.
Thankfully there is another way, another approach to the provision of housing, an approach that is based upon the needs of the citizenship and not the greed of the parasitic vested interests.
Éirígí is campaigning for the creation of a new not-profit approach to housing, where the state becomes the lead provider of Public Housing for All. Under such a system the domination of the private banks, developers, speculators, landlords and the other vested interests would be brought to an end.
If you want to find out more about our ideas on housing come along to the a public meeting entitled ‘The Housing Heist – How Hopes and Homes Were Stolen’ in Murray’s of #Lusk, Dublin at 7.30pm on Wednesday. It’s free of charge and open to all.
Please Note: The figures contained in the post above and in the accompanying video are based upon a new house price of €330,000, purchased by first-time buyers with a €44,000 deposit and a 33 year mortgage at a 4.3% rate of interest. For further detail please message this page.