104,000 investment properties sitting vacant

mentalson

http://www.ireland.com/newspaper/property/2006/0608/512065133RPHOLDEN.html

"There are currently 104,000 investment properties sitting vacant around the country, and these are not holiday homes . . .



Surely if this statistic from the Irish Times is correct it is significant. It means that many speculators are holding on to properties purely for capital appreciation and the builders arguements about supply not yet meetin demand are bull****. If prices take a downturn will they continue to hold on to their vacant investment properties.

miju

i raised this point on the stickied thread, my guess is a good few will try and hold their nerve but the rest will try and bolt for the nearest exit,

here's a question i've just thought of , if all the speculative buyers / landlords sell where does that leave alot of tenants?

Lex Luthor

miju wrote:

here's a question i've just thought of , if all the speculative buyers / landlords sell where does that leave alot of tenants?

there's another 104,000 houses for them to choose from....;)

whizzbang

Does anyone know where this figure comes from? I'd love it to be true but I am reluctant to just believe it. Could this be slanted by investors saying ther is nobody in there property to avoid tax?

indiewindy

It could be that allright, but its some risk to take paying a mortgage on a property that your not even getting a rent on, betting on prices continuing their steep upward spiral

Lex Luthor

indiewindy wrote:

but its some risk to take paying a mortgage on a property that your not even getting a rent on

its a HUGE risk

The_Conductor

I bet that the vast bulk of these properties are tax designated properties and that the reason so many of them are vacant is because of their locations (tax designated properties were the tool of choice in promoting rural development and repopulation- someone somewhere screwed up though.....).
I would be very surprised if any number of these properties are in locations where there is a ready rental market.

Sponge Bob

Wrong, lots of them are in non tax designated areas like D1 and Galway and Cork.

Its 1.25 years worth of total building output , a market overhang if ever I saw one.

The_Conductor

I'd never have guessed.
If that is the case then why are they not bothering to let the apartments/houses? Is the rental income not worth their bother? Are they afraid tenants will thrash the place and make it more difficult for them to hit the ground running if they decide to dump the property on the market?
1.25 years worth of housing stock is a serious overhang.

If I remember rightly there were proposals to tax income foregone as actual income. There might be a justification for it in those sort of circumstances?

FillSpectre

Still does anybody know where this guy got the figure?

Essentially one person has made the claim without any proof.

How it is even possible to gather this information accurately? It would require masses amount of research on a constant basis.

If it is true it really should be expressed as a percentage of all rental property.

It is spin and possibly a lie

whizzbang

FillSpectre wrote:

It is spin and possibly a lie

84.6% of statistics are made up on the spot after all.

Going with 104,000 is a good one, it is more than 100k which is big number in peoples's minds while maintaining a rough sounding accuracy by going with 104 rather than 105.

104,122 would have sounded a little too percise and people might have sought the soruce numbers.

Splendid statistic creation.

Gurgle

whizzbang wrote:

Could this be slanted by investors saying ther is nobody in there property to avoid tax?

^^
This Gringo could be on to something

miju

smccarrick wrote:

I bet that the vast bulk of these properties are tax designated properties and that the reason so many of them are vacant is because of their locations (tax designated properties were the tool of choice in promoting rural development and repopulation- someone somewhere screwed up though.....).
I would be very surprised if any number of these properties are in locations where there is a ready rental market.

they possibly are but i wouldn't be 100% sure , i live in Cityside (a development completed about 6 months ago) when I walk out my front door I see 5 vacant apartments and when I walk out the back I see another 3 vacant apartments and thats just in my immediate eyeline (by vacant i mean no furnishings in them or anything)

FillSpectre

miju wrote:

they possibly are but i wouldn't be 100% sure , i live in Cityside (a development completed about 6 months ago) when I walk out my front door I see 5 vacant apartments and when I walk out the back I see another 3 vacant apartments and thats just in my immediate eyeline (by vacant i mean no furnishings in them or anything)

I would think nothing of a 6 month vacancy on a newly completed devlopment. It doesn't mean they are investment and even if they are it doesn't mean they are losing money. Many people buy off plans to make a profit and some wait for phase 2 to be released to sell.

Still the figure has no backing and while the cliche about stats been made up can be true. We are simply talking about one man saying something without any support. The paper are slightly irresponsible for not asking for the figure to be supported.

miju

cityside has fully finished all building phases

agree would be very interested to see where that figure came from also

whizzbang

FillSpectre wrote:

Still does anybody know where this guy got the figure?

He is a profressor in TCD, I just emailed him to ask, I'll let you know what he says.

garred

If this figure is true might it have something to do with CGT........is it true that if you are thinking about selling an investment property you can move back into it for a year, claim it as your primary residence and avoid paying CGT?

whizzbang

garred wrote:

If this figure is true might it have something to do with CGT........is it true that if you are thinking about selling an investment property you can move back into it for a year, claim it as your primary residence and avoid paying CGT?

I think you avoid paying CGT on the year you spend living in it. Not the time it was rented. I don't think the Revenue would let you get away with that! Otherwise you would have property developers moving house every year!

whizzbang

This 104,000 figure comes form John Fitzgerald, "The Irish Housing Stock : Growth in Number of Vacant Dwellings" in Quarterly Economic Commentary, ESRI, Dublin, Spring 2005.

you can download it here (PDF)

miju

righto that raises some questions:

1: are they're more up to date figures (as they're from 2002) and how likely are they to be now occupied

2: a total of 67,000 can be accounted for as temp vacant / holiday homes which leaves an overhang of 37,000 homes smack bang in the middle of the recent boom (where's they'res a shortage) so someones been fibbing about supply to the tune of 37,000 extra homes (you could say the whole country was gazumped LOL )

3: most importantly, is the figure of 37,000 homes likely to have increased or decreased (i'm betting increased due to increasing building output year on year)

FillSpectre

After briefly looking at it all I can say is it seems to be quite little increase as a percentage of the overall market. In other words a normal attribute of our housing market.

The figure are 4 years old so to state the the current figures appears to be speculative.

The_Conductor

If you read the report- over a quarter of the properties in the 2002 stats listed as vacant were either incomplete or uninhabitable for undefined reasons. Almost a further third were holiday homes leaving less than half the vacant properties as principle residences or investment properties unoccuppied for one reason or another.

Also of interest- there have been more properties completed since 2002 than in the 10 previous years combined (84,000 in 2005 and on target for 86,000 this year).

The report, while an interesting read, is unfortunately entirely obsolete given developments of the last 3-4 years. It also hypothesises about information volunteered in the '02 census. It is unclear whether the basis for a lot of the hypothesis are sound. I suppose I shouldn't question the good professor.

Remember- prominent economists have predicted 11 out of the previous 6 recessions

whizzbang

miju wrote:

righto that raises some questions:

2: a total of 67,000 can be accounted for as temp vacant / holiday homes which leaves an overhang of 37,000 homes smack bang in the middle of the recent boom (where's they'res a shortage) so someones been fibbing about supply to the tune of 37,000 extra homes (you could say the whole country was gazumped LOL )

[edit]saw your retraction on AAM[/edit]

in 2002 there following was the breakdown of inabitable but empty houses
Temperarilty vacant: 26,736
Holiday home: 39,383
other: 104,035 <== the 104,000 quoted in the article

I'm not sure of more recent figures, I guess it will be a while for the 2006 cencus to be available.

I'm not sure if the number will have goen up or down though as there are more houses but also more immigrents.

FillSpectre

The total number of vacant property doesn't matter it is the figure as a percentage that tells the true story and allows comparison. As percentage has remain relarively stable it appears to be normal. There is no noticable increase i vacant houses. THe article suggested there was.That does not appear to be the case and the report is well out of date and relies of volountered information. In the absence of other data I guess it is an indicator but a very inaccurate one.

miju

according to today's Independant , initial signs from the census show there's now approx 270,000 vacant properties (which is a rough increase of 165% :eek: :eek: ) PLUS another 30,000 holiday homes and thats based on figures from April of this year

what's more is that figure has been arrived at has the enumerators had to enquire with developers , management companies, neighbours in order to make a property down as vacant

property shortage , me arse

The_Conductor

Cool!
Thats almost 4 years supply worth......
Along with interest rates on an ongoing upward trachetory......
Writing on wall anyone?

FillSpectre

miju wrote:

according to today's Independant , initial signs from the census show there's now approx 270,000 vacant properties (which is a rough increase of 165% :eek: :eek: ) PLUS another 30,000 holiday homes and thats based on figures from April of this year

what's more is that figure has been arrived at has the enumerators had to enquire with developers , management companies, neighbours in order to make a property down as vacant

property shortage , me arse

According to the indo nothing of the sort. That is nothing to do with the CSO figures and more to do with the collection of data. A very slanted piece. BAsically they didn't get answers from places and checking they were vacant. That does not mean they have an accurate count. There were huge blocks they couldn't get into also and there is no mention of that.

A friend of mine works in the CSO and they were in real trouble trying to get to people in gated communities of all sorts. This was well publicised on Joe Duffy when it was going on yet the indo ignore this part. The story should be about the census not housing

ronbyrne2005

Theres obviously not a huge housing shortage as rents havent risen much if any in real terms in 5/6 years,if there was huge demand for housing rents would rise as well as property prices.
property owners can offset losses on one property off profits from rents on another property,if people claim to be trying to rent their property but in reality are just sitting on them for capital appreciation they may be offsetting the loss (due to interest paid on interest only mortgage) against profits in other properties and reducing income tax but making loads of paper profits through the prices of all his/her properties rising.

whizzbang

smccarrick wrote:

Cool!
Thats almost 4 years supply worth......
Along with interest rates on an ongoing upward trachetory......
Writing on wall anyone?

I'm looking forward to the full Census result (man I can't believe I just wrote that) it will be interesting to see what the real demographics of Ireland are these days!

Sponge Bob

FillSpectre wrote:

A friend of mine works in the CSO and they were in real trouble trying to get to people in gated communities of all sorts.

The UK runs at a vacancy level of c 3% , and thats also taken from a census check .... in 2001.

In Ireland 300,000 out of 1.8m is c. 16.6% . Allow that 50000 were in 'blocks' where they could not get access. That still leaves 250,000 properties empty nationwide or 13.8% . Thats 4 x the UK. The UK also has high rates of empties in places like mining areas where there are no mines and blocks of the UK empties are up north where the housing demand is low, eg Liverpool where the population has dropped a lot in the past 50 years and which has the highest empty rate in the UK, 7.6% . London has a rate around 1-2% by contrast.

Even in areas of Wales, the mining valleys, that have high rates of empties and where there is no mining any more the rate of empties is about 6% at its worst .


Some of our empties are in rural areas where the population declined too.


Nevertheless we seem to have over 4 times the UK number of empties and with no obvious depopulation driver as in former industrial belts in the UK .

But feck it anyway, we Irish are different

miju

FillSpectre wrote:

According to the indo nothing of the sort. That is nothing to do with the CSO figures and more to do with the collection of data. A very slanted piece. BAsically they didn't get answers from places and checking they were vacant. That does not mean they have an accurate count. There were huge blocks they couldn't get into also and there is no mention of that.

irish independant wrote:

Enumerators delivering and collecting the census forms were unable to contact the inhabitants.

Following inquiries among neighbours, postmen and women and apartment block management companies, the vast majority of those dwellings - some 275,000 - were identified as being vacant.

......................

In a further 30,000 cases, there was nobody at home when census officials called on various occasions.

......................

These preliminary figures are based on population summaries prepared by enumerators

this isn't the gated properties that the CSO are talking about ( according to one of my ex-colleagues in CSO )

this preliminary figure was arrived at from the enumerators speaking to postmen , management companies , neighbours OR in otherwords people who would actually know a property is vacant and obviously to get to a neighbour they can get into the estates