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Property Market Overdeveloped, Government Policy To Blame?


Donald Trumps

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'Vacancy rate' almost doubled since 2001, from eight to 15%

Has CoMin policy of encouraging new housing development led to apparent blight in the island's property market?

Manx Radio story
https://www.manxradio.com/news/isle-of-man-news/govt-report-seeks-to-shed-light-on-vacant-properties/


Economic Affairs vacant property review:

https://mm.aiircdn.com/147/5d680eb1005cb.pdf?fbclid=IwAR3aGH2QoBMXnNdy2lsYcPSh621LzHMdugX0C29Ng71izKMs3heI3UNeqWI

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An awful lot of expats and off-Islanders have bought properties as investments over here in the last twenty years or so, assuming market conditions to be the same as in the U.K. and to sit out a period of low interest rates. I fear many of them won't see the return they're expecting. I can't see where a recovery is going to come from.

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The report was good at establishing figures for vacancy rates and breaking them down by type of property, but bad at establishing why they are vacant.  There are probably two main reasons:

- someone buys a property but then doesn't live in it, at least not full time (see last post)

- someone buys a property, lives in it and then dies or moves into a nursing home

We had the latter problem with my parents' house - we had it on our hands for 18 months and thought we'd never get rid of it, but finally it sold.  It's a problem if you have a population skewed toward the older age groups.

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.......and yet, 'they', keep building new houses and estates for whom?

Do ,'they', wish to crash the market, buy the houses very cheaply and then provide residence for other countries cast offs? Or are the Chinese coming to set up a monorail manufacturer/ felt factory or waste repository for radio active waste,, or maybe a ship breakers or, or, OK I'll go back to sleep.

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I wonder how many are vacant and for sale...?

I see that DOI are now proposing to demolish the 240 year old Manx cottage at Balthane roundabout now too, in order to accommodate a new larger roundabout to service the bypass which will service, er, the new Dandaraland at Ballasalla. Wonder if there'll be any last minute preservation orders raised by DEFA planning for this...?

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Presumably new houses - no matter how flimsy their construction - are a lot easier to sell than ageing buildings

It's profits for the developers, apparent (rather than real) economic growth for the polticians, only existing homeowners suffer

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6 minutes ago, MrPB said:

That’s true but something very odd is happening. The jobs market is very slow, statistics show fewer people are coming here, more people are leaving but at the same time we seem to be embarking on some Hitler-style build strategy. It just doesn’t stack up but Dandara aren’t fools so there must be something behind it. They aren’t going to build houses they can’t sell. 

I'll lay odds that virtually everything they build ends up being BTL as very few (if any) youngsters can afford the mortgage repayments.

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26 minutes ago, MrPB said:

That’s true but something very odd is happening. The jobs market is very slow, statistics show fewer people are coming here, more people are leaving but at the same time we seem to be embarking on some Hitler-style build strategy. It just doesn’t stack up but Dandara aren’t fools so there must be something behind it. They aren’t going to build houses they can’t sell. 

But it does keep the construction industry and its chains busy, thus keeping a lid on unemployment and discouraging mass departure of those in the building labour market. Thus keeping the population figure up too.

Could our Govt's view be short term enough for this to be its policy?

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29 minutes ago, finlo said:

I'll lay odds that virtually everything they build ends up being BTL as very few (if any) youngsters can afford the mortgage repayments.

A lot of what they're (Dandara) building is reputedly being sold on a BTL basis. I've been told that by Dandara employees. I'm on a recent Dandara development and most of the neighbours are renters. 

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36 minutes ago, Non-Believer said:

A lot of what they're (Dandara) building is reputedly being sold on a BTL basis. I've been told that by Dandara employees. I'm on a recent Dandara development and most of the neighbours are renters. 

The yields must be massive given they are getting the rental stock at cost. So a £300,000 house is costing you £100,000 to build at cost and you’re getting £1,000 a month off it which is a yield of 12% or a massive 300% profit when you eventually sell it. Its money for old rope and restricts purchasable housing stock which keeps prices up. 

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