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Prices fell in Ireland (and Spain and lots of other places) because supply was higher than demand. They built more houses than there were buyers. There are houses built in such places in 2007 that have still never been lived in.
There are plenty of towns in the UK where you can buy a second-hand house for less than it would cost to build it new, even if the land were free, which it never is.
https://www.rightmove.co.uk/properties/130187429#/?channel=RES_BUY
That house does not supply good vibes ofc, so you are right.
Hefty-
Prices fell in Ireland (and Spain and lots of other places) because supply was higher than demand. They built more houses than there were buyers
I would tell you a different story which focuses on effective demand as the key driver, with supply as a sideshow. Very aggressive bank lending at high LTV and income multiples massively increased the spending power of the population (both owner occupied but crucially BTL). When the banks blew up, lending stopped, no-one could afford to pay the old prices and demand evaporated.
It's not a story of 1,000 households wanting to live in a particular town and the housing stock expanding from 900 to 1,100 dwellings to drive down prices.
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https://www.rightmove.co.uk/properties/130187429#/?channel=RES_BUY
That house does not supply good vibes ofc, so you are right.
Agree that this has bad vibes, but I think it's so cheap because of the required repair cost and low density, not because the land value is necessarily negative.
Interesting to speculate but I reckon at zero land cost you could throw up a block of flats profitably in this location. Or maybe could have done before 2022 inflation.
NickCJ
The houses usually get built one way or another, though? Even if the bank has to intervene and wipe out the original developer's equity.
It's rare to see in the UK the situation they had in Ireland post 2008 where property prices fell so far that they were below construction cost (implying a negative land value).