Rents to Rocket?

who_ru

Milk & Honey wrote: »

A lot of formerly rented property is for sale and is not going to be back on the rental market.

that would be a very strange move given rents are rising according to some while sales are static and static at a very low level.

Snakeblood

who_ru wrote: »

that would be a very strange move given rents are rising according to some while sales are static and static at a very low level.

Well, the pre-63 bedsits are being put on the market, I suppose.

Mr. Loverman

I've been living in China the past year and only read this forum every now and then. I cannot believe there are still people who blindly believe the press releases from estate agents etc. that the Irish Independent constantly print.

Fool me once, shame on you. Fool me twice, shame on me. Fool me 50,000 times, I'm Irish.

It's beyond embarrassing. Seriously I think boards needs to start forcing people to declare their age, IQ and profession next to every post so we can see who exactly is saying what.

steve9859

Everyone talking about these huge blocks of empty apartments is mentioning 'just inside the M50', Tallagh, Sandyford, Santry etc. That is a whole different story to anywhere within a 30 minute walk (2-3km max) from College Green - I can't think of a whole load of empty property within that area.

I am a landlord within this radius (having been forced to emigrate to find work), have recently re-let, and am certainly seeing no downward pressure on rents - I am ceryain I could have upped it tbh, given the demand that I experienced. The only reason that I didn't was that I was trying to manage thre process from London and needed an easy process

Mr. Loverman

steve9859 wrote: »

Everyone talking about these huge blocks of empty apartments is mentioning 'just inside the M50', Tallagh, Sandyford, Santry etc. That is a whole different story to anywhere within a 30 minute walk (2-3km max) from College Green - I can't think of a whole load of empty property within that area.

I am a landlord within this radius (having been forced to emigrate to find work), have recently re-let, and am certainly seeing no downward pressure on rents - I am ceryain I could have upped it tbh, given the demand that I experienced. The only reason that I didn't was that I was trying to manage thre process from London and needed an easy process

I don't think anyone is denying there are sweet spots in Dublin which will always be in demand, e.g. within walking distance of the city centre.

But most of Ireland is not a sweet spot.

Kosseegan

Mr. Loverman wrote: »

I don't think anyone is denying there are sweet spots in Dublin which will always be in demand, e.g. within walking distance of the city centre.

But most of Ireland is not a sweet spot.

The Dublin sweet spot will expand due to no building, higher transport costs and the unwillingness or inability of first time buyers to buy in the suburbs.

Mr. Loverman

Kosseegan wrote: »

The Dublin sweet spot will expand due to no building, higher transport costs and the unwillingness or inability of first time buyers to buy in the suburbs.

Yes but the economy continues to tank, people continue to emigrate, wages continue to decrease, tax continues to increase, etc.

Anyone who thinks now is the best time to buy is in full delusion mode. (Of course, if you want to buy now go ahead and buy now, just don't go around telling everyone now is the best time to buy and rent is dead money, etc.)

There will always be demand for decent properties in decent locations, but I would predict prices will once again continue their slow descent, some properties descending faster than others, of course.

who_ru

Mr. Loverman wrote: »

I've been living in China the past year and only read this forum every now and then. I cannot believe there are still people who blindly believe the press releases from estate agents etc. that the Irish Independent constantly print.

Fool me once, shame on me. Fool me twice, shame on you. Fool me 50,000 times, I'm Irish.

It's beyond embarrassing. Seriously I think boards needs to start forcing people to declare their age, IQ and profession next to every post so we can see who exactly is saying what.

as far as the Independent is concerned Dublin is the property market. if 2 or 3 houses sell for above asking they print a banner headline on page 1 declaring sale prices have increased, or if asking rents increase they will print de facto that rents have increased and that there will be a severe shortage of rental stock quite soon.

but their strategy of exaggeration/scare mongering has worked in the past so no reason to think it won't work now.

But all discussion of property must be put in a context of a country and economy in a dire state, banks having reverted to a lending regime last seen in the 80s and not likely to lend again on the celtic tiger scale.

we must also remember that we are now 6 years into a property bust and repossessions are almost negligible in the BTL sector even though 32% of AIB BTL properties are in arrears. Who knows what percentage of the other banks properties are in arrears.

italodisco

Total ****e by someone having a panic attack by the look of it....

desertcircus

Kosseegan wrote: »

desertcircus wrote: »

Who is buying this formerly rented property?

First time buyers. A lot of them are Chinese apparently.

Seriously? How many first time buyers are there in the whole country at the moment? Nowhere near enough to put upward pressure on the entire rental market. And where did they live before they bought these places? Unless they're new households rather than movers, their net effect is zero - they have to have vacated another property to move into the new one. None of this makes any sense - there aren't enough buyers to reduce rental stock, even if there were a large proportion would simply have zero net effect, and we still have a crippling overhang. Are we really running with suppositions and one three-bed in Ranelagh a mate's sister's boyfriend lives in as the evidence for a rise in rents?

Slydice

namawinelake had an interesting blog on this subject recently:
Irish residential rents decline for the second month in a row
June 7, 2012 by namawinelake
http://namawinelake.wordpress.com/2012/06/07/irish-residential-rents-decline-for-the-second-month-in-a-row/

Elsewhere private rents fell by 0.1% in the month of May 2012 – the second monthly decline in 2012 and the first time since before 2010 that there have been two consecutive monthly declines – and over the past year, such rents are up by 2.2% according to the CSO – there is some small rounding in the figures above which show 2.0%. It seems that in our financial crisis, the big correction in rent took place in 2009 with a 19% maximum decline, compared to a decline of just 1.4% for all of 2010. Since the start of 2011 there has been a 3.6% increase (mostly recorded in February and October 2011 and February 2012). At the start of January 2012, the Department of Social Protection reduced its rent assistance payments by up to 29% (an average of 13%) and the Department says that some 40% of the rented market in the State is affected by rent assistance payments, which at the end of 2011, was paid to 98,603 households. The Department’s 40% is derived from information provided to it by the Private Residential Tenancies Board. The Department is projecting it will save €55m in 2012 from its €500m budget for rent assistance, the saving comprising €33m to changes to the minimum contribution and €22m in relation to the new maximum limits. The decline in March and April 2012, when three month notices given in January 2012 would have expired may herald the start of the long awaited impact of the reductions in rent assistance announced in January 2012. Though on the other hand, the modest 0.1% decline in May 2012 might suggest the adjustment is coming to an end.

Private rents have tended to fall in line with rent allowance even though many landlords will not accept rent allowance tenants. The betting on here is that private rents will come under pressure in the short term, though you shouldn’t read too much into the results for two months. Property commentators including those in NAMA have pointed to a buoyant rental market as one of the bright spots in an otherwise dismal property market, but that buoyancy may deflate in coming months as the artificial supports of State-aided rent assistance dissipates.

who_ru

Slydice wrote: »

namawinelake had an interesting blog on this subject recently:
Irish residential rents decline for the second month in a row
June 7, 2012 by namawinelake
http://namawinelake.wordpress.com/2012/06/07/irish-residential-rents-decline-for-the-second-month-in-a-row/

please don't cloud the story with the facts

Milk & Honey

who_ru wrote: »

that would be a very strange move given rents are rising according to some while sales are static and static at a very low level.

A lot of landlords are being put into receivership and the receivers are selling. The last allsops auction had a number of such properties. I got the special conditions for some of the properties and there were NPPR receipts. There are very few buy to let investors in the market any more.

kippy

Milk & Honey wrote: »

A lot of landlords are being put into receivership and the receivers are selling. The last allsops auction had a number of such properties. I got the special conditions for some of the properties and there were NPPR receipts. There are very few buy to let investors in the market any more.

Surely the fact that less people are buying pushes up the demand for letting properties?
Is'nt that more of a driver of rents than anything else? (never mind property tax, water tax etc)

Milk & Honey

kippy wrote: »

Surely the fact that less people are buying pushes up the demand for letting properties?
Is'nt that more of a driver of rents than anything else? (never mind property tax, water tax etc)

That is what the thread is about. Rents are being edged up by developments in the market. More tenants and fewer available rental properties.

Milk & Honey

desertcircus wrote: »

Seriously? How many first time buyers are there in the whole country at the moment? Nowhere near enough to put upward pressure on the entire rental market. And where did they live before they bought these places? Unless they're new households rather than movers, their net effect is zero - they have to have vacated another property to move into the new one. None of this makes any sense - there aren't enough buyers to reduce rental stock, even if there were a large proportion would simply have zero net effect, and we still have a crippling overhang. Are we really running with suppositions and one three-bed in Ranelagh a mate's sister's boyfriend lives in as the evidence for a rise in rents?

There are a number of them in Dublin. It will be a long time before the surplus housing around the country is absorbed. New households are forming constantly.
Somebody moving from renting to buying a former rented dwelling will reduce the stock of rented dwellings. There were two on the rental market and now there is one. Newly forming households have fewer rental properties available. There is no building. The household formation rate is in excess of the household dissolution rate. The number of Leaving cert students is expected to increase in the years ahead following the increase in the birth rate of the mid 90's. As they fly the nest the demand for housing will increase.

Monty Burnz

I take as a healthy sign of desperation that people are back trying to talk up the market, hoping that people forget the mania of only a few years ago.

Zamboni

Milk & Honey wrote: »

The household formation rate is in excess of the household dissolution rate.

Source please?

Milk & Honey wrote: »

The number of Leaving cert students is expected to increase in the years ahead following the increase in the birth rate of the mid 90's. As they fly the nest the demand for housing will increase.

It is true there is will be a larger demand for housing in the future but it is medium to long term.
It also does not necessarily mean rents will rise. Peoples housing requirements may be satisfied by a return to a higher number of persons per household and the age people will leave the nest will be higher.

I think your posts are purely speculative and lacking any solid evidence to support your theories.

RATM

Here's a report by Deutche Bank who reckon that given current population growth levels and outward migration levels Ireland has enough housing stock for the next 43 years.

http://www.independent.ie/business/irish/itll-take-us-43-years-to-fill-all-empty-houses-3133714.html

Looks like NAMA will be calling in the bulldozers after all...

Captain Chaos

Yeah, if you want to live on the west coast in the arse end of nowhere. Who wants to be on the road for 30hrs a week going to and from work?

Milk & Honey

Zamboni wrote: »

Source please?

http://www.ncbresearch.com/fixed_income/Irishresidentialproperty.pdf

At 22,000 formations per annum it is reasonable to assume that one third will be in the greater Dublin area. This is an area with very little new building. Already shortages are emerging in particular locations and property types. This can only increase with no new builds.

desertcircus

Milk & Honey wrote: »

Zamboni wrote: »

Source please?

http://www.ncbresearch.com/fixed_income/Irishresidentialproperty.pdf

At 22,000 formations per annum it is reasonable to assume that one third will be in the greater Dublin area. This is an area with very little new building. Already shortages are emerging in particular locations and property types. This can only increase with no new builds.

Which might fly if it weren't for emigration, people living at home for longer, mortgages drying up, salaries falling, unemployment rising and God knows what else.

Monty Burnz

Milk & Honey wrote: »

http://www.ncbresearch.com/fixed_income/Irishresidentialproperty.pdf

At 22,000 formations per annum it is reasonable to assume that one third will be in the greater Dublin area. This is an area with very little new building. Already shortages are emerging in particular locations and property types. This can only increase with no new builds.

And of course Dublin is a city where people are also immune from emigration, relocation, and indeed death itself.

And when you speak of shortages - have you heard about the even more serious shortage of Ferraris? Billions of people want one, but they only make about 10,000 cars a year!!

Milk & Honey

desertcircus wrote: »

Which might fly if it weren't for emigration, people living at home for longer, mortgages drying up, salaries falling, unemployment rising and God knows what else.

Mortgages drying up will put pressure on rents for two reasons. people renting because they can't get the money to buy and the inability of buy to let investors to obtain loans to buy. More buy to let investors are exiting the market than entering. Unemployed people still have to live somewhere.
Emigration will exert a downward pressure but that has been factored in to the statistics.

Monty Burnz

Milk & Honey wrote: »

Mortgages drying up will put pressure on rents for two reasons. people renting because they can't get the money to buy and the inability of buy to let investors to obtain loans to buy. More buy to let investors are exiting the market than entering. Unemployed people still have to live somewhere.
Emigration will exert a downward pressure but that has been factored in to the statistics.

It's amazing really - everything points to increasing rents! It's just like 2006 all over again.

Can anyone remember what happened after that?

Milk & Honey

Monty Burnz wrote: »

It's amazing really - everything points to increasing rents! It's just like 2006 all over again.

Can anyone remember what happened after that?

Everything pointed to falling rents in 2006 if I remember correctly.

Caseywhale

desertcircus wrote: »

Which might fly if it weren't for emigration, people living at home for longer, mortgages drying up, salaries falling, unemployment rising and God knows what else.

All this only happens while a recession is ongoing.

Anyone who has experience of previous recessions know this.

I always find it amusing when people think a recession is the end of the world.
They have happened before, they will happen again. Each one seems worse than the last. When in reality some things are worse, other things are better than the last one,

Monty Burnz

Caseywhale wrote: »

All this only happens while a recession is ongoing.

Anyone who has experience of previous recessions know this.

I always find it amusing when people think a recession is the end of the world.
They have happened before, they will happen again. Each one seems worse than the last. When in reality some things are worse, other things are better than the last one,

We are way, way past recession. This is a depression.

norrie rugger

kneemos wrote: »

CIF=pinch of salt.

Pinch????

Solair

norrie rugger wrote: »

Pinch????

A full ready mix cement truck of salt!