Is property in a bubble?

GreatApe

BikingBud wrote: »

Are you talking about cost or sale price?

What about profit margins?

10000 hours is 250 man weeks @40hrs/week, perm that and add resource as you like but what house are you building that takes so long?

Its not 10,000 hours on site its 10,000 hours to do it all eg how many hours does it take to mine the materials and turn them into bricks plaster cemnet glass wires pipes and deliver them to the building site etc? Also how many hours did it take to build and maintain the power tools or magines or JCB used in site?

Actually I have to amend my figure to be more accurate if you want a more specific discussion rather than a general discussions. UK GDP is about £1950 billion and we achieve this with 32 million workers so £61,000 per worker. So a £160,000 house costs approx 2.6 worker years or about 130 work weeks. Its not 130 work weeks on site it might obky be 50 work weeks on site and the other 80 work weeks to produce the materials the machines and pay for the town planners and architects and engineers in an office somewhere and pay for the bankers that funded the cost of the capital etc etc

oz0707

Point taken that it costs more labour than actual hours on site. Surely build costs and land values and build costs plus profits have to be fairly separated to calculate productivity though?

Not underestimating build costs either. Although they are creeping up it's what I do for a living. Basic spec in Midlands will be built for that.

So what are we trying to find out? If build cost of house was worth less Man hours in years gone by? 80000/£15. 5333 hours. If sale price 180 k then you have to split the land value and profit. Land 60k profit 40k?

BikingBud

What a bizarre way of looking at it.

Every worker in the uk works 50 weeks per year??

Not everything can be aggregated up and allocated an overall price. There are lots of nuances and variables in building that need to be considered. Overheads are infinitely variable such as re-using plans on a many build site rather than bespoke build alters the cost significantly.

I think your attempt at fast maths misses a lot of these elements.

buggy_boy

Clearly the actual cost of build, materials and labour have gone down but the land has gone up, if you look at the size of the plots in the 50's to the new builds now there will be 6-10 houses on the same amount of land as a property built in the 50's...

I think the example of a nail gun costing £150 lasting 2years and costing £150 in maintenance is the example of how you can wildly miscalculate, what maintenance would you do to a tool only costing £150 in 2 years? These days tools can last quite some time, A decent nail gun would be more like £250 (Makita bare), but it should last 6-10yrs and cost nothing in maintenance apart from a maybe a bit of electricity, How much time it would save is hard to say but has to be at least 5x faster so could save you at least 100 man hours a year, at £15 an hour thats £1500 a year....

The point is though there has been productivity increases, what you really mean is the productivity increases has not resulted in lower prices like it has in say flat screen TV's.

GreatApe

buggy_boy wrote: »

Clearly the actual cost of build, materials and labour have gone down but the land has gone up, if you look at the size of the plots in the 50's to the new builds now there will be 6-10 houses on the same amount of land as a property built in the 50's..If
I think the example of a nail gun costing £150 lasting 2years and costing £150 in maintenance is the example of how you can wildly miscalculate, what maintenance would you do to a tool only costing £150 in 2 years? These days tools can last quite some time, A decent nail gun would be more like £250 (Makita bare), but it should last 6-10yrs and cost nothing in maintenance apart from a maybe a bit of electricity, How much time it would save is hard to say but has to be at least 5x faster so could save you at least 100 man hours a year, at £15 an hour thats £1500 a year....

The point is though there has been productivity increases, what you really mean is the productivity increases has not resulted in lower prices like it has in say flat screen TV's.

Here is a quite from the economist with regards to construction.

Things are especially dismal in rich countries. In France and Italy productivity per hour has fallen by about a sixth. Germany and Japan have seen almost no growth. America is even worse: there, productivity in construction has plunged by half since the late 1960s

This isn't just my view its what has been observed in many if the worlds biggest economies

GreatApe

oz0707 wrote: »

Point taken that it costs more labour than actual hours on site. Surely build costs and land values and build costs plus profits have to be fairly separated to calculate productivity though?

Not underestimating build costs either. Although they are creeping up it's what I do for a living. Basic spec in Midlands will be built for that.

So what are we trying to find out? If build cost of house was worth less Man hours in years gone by? 80000/£15. 5333 hours. If sale price 180 k then you have to split the land value and profit. Land 60k profit 40k?

Were not trying to figure anything out its a known fact that productivity in construction has not really inporved vs 50 years ago and in the developed nations like France itay USA its gone backwards. So despite all the power tools its taking more man hours to do construction now than it did fifty years ago

The question is why and what can be done about it?

oz0707

Productivity may have suffered at the expense of safety. Won't find many who oppose that however it is getting very intense now. Bet injuries and fatalities have reduced in that time.

A lot of firms are paying by the hour and I've more than once seen jobs purposely dragged out by subbies. Although I don't see any of the big developers moaning about build out speed so mustn't be a problem for them. There is a skills shortage but not sure that impacts productivity.

BikingBud

GreatApe wrote: »

Were not trying to figure anything out its a known fact that productivity in construction has not really inporved vs 50 years ago and in the developed nations like France itay USA its gone backwards. So despite all the power tools its taking more man hours to do construction now than it did fifty years ago

Again I find that quite interesting where do you get those figures?

Are you saying in France and Italy, despite all the technological improvements and increasing use of machines, it takes more man hours to build a house than it did 50 years ago?

Really?

So why are we using machines rather than navvies?

GreatApe

BikingBud wrote: »

Again I find that quite interesting where do you get those figures?

Are you saying in France and Italy, despite all the technological improvements and increasing use of machines, it takes more man hours to build a house than it did 50 years ago?

Really?

So why are we using machines rather than navvies?

Its not me saying it its the relavent statistic bodies of the various nations.

All I can say is its more complicated than power tools and even power tools themselves are less of a productivity improvements over their hand powered cousins than they may seem

It seems to be that a combination of regulations safety and other aspects which have reduced productivity more so than power tools have improved productivity. In some cases by a lot in France or Italy what a team of men that could build 6 homes in a year only manage 5 now.

There are also lots of other aspects which most people wouldn't consider. For instance imagine you are a plumber what would be your one wish to improve your productivity? Maybe a machine which helps you cut pipes faster would be useful but your wish should be for less traffic. If a plumber spends half his day moving from one job to the next then it won't matter if he has a faster pipe cutter if he is spending an hour more a day in traffic his productivity goes down even if he is able to cut pipes faster thanks to a new tool.

GreatApe

BikingBud wrote: »

Are you saying in France and Italy, despite all the technological improvements and increasing use of machines, it takes more man hours to build a house than it did 50 years ago?

Really?

Yes amazing isn't it?

Just to note it is for the construction sector overall so includes roads bridges power stations hospitals etc but the biggest part of the construction sector by far is residential housing so yes it now takes more man hours to build a house than it did fifty years ago. Don't think just men on site but the whole story

Anyway this is one of the reasons housing has gotten more expensive. Or at least the reason it has not gotten cheaper. We haven't had much if any overall productivity improvements in construction and many of the developed nations are now less productive at construction than in the past.