Is it a landlord's market out there?

awec

Pawwed Rig wrote: »

I know what you mean, it makes the whole process alot more difficult as you need to wait on decisions by others. We were lucky in that the apartment we got in D2 was already taken by someone but they pulled out at the last minute leaving the landlord in a bit of a bind as she had already refused all the other viewers. As she wasn't an agent that didn't live locally I think she was just happy to get rid of it the night we viewed and we were offered it on the spot.
Congrats anyway. One less thing to worry about. Hope you didn't have to make bids.

What I didn't like was that I didn't feel like I could get a real in-depth proper look at the place with all the other people walking about. I felt I was in other people's way and I felt that they were in my way.

I also didn't like having to ask questions in front of everyone else, it was hard to sort of get a proper chat with the letting agent.

We didn't have to make any bids thankfully. We viewed two, one at our maximum and one slightly less than our max. We went for the one at our max but if they had asked us to up the amount to pay then we'd have walked for sure.

gaius c wrote: »

See it as practice for when you are viewing places to buy.

That will not be happening for a very long time, we have absolutely no need to own property right now. :P

Rainblow

awec wrote: »

What I didn't like was that I didn't feel like I could get a real in-depth proper look at the place with all the other people walking about. I felt I was in other people's way and I felt that they were in my way.

I also didn't like having to ask questions in front of everyone else, it was hard to sort of get a proper chat with the letting agent.

We didn't have to make any bids thankfully. We viewed two, one at our maximum and one slightly less than our max. We went for the one at our max but if they had asked us to up the amount to pay then we'd have walked for sure.

:P

That kind of situation was the norm for a very long time in Dublin. It was only for a few years from 2008 to 2012 there was a tenants market and the tenants could bargain and pick and choose. Before that it was back to the mid 1980s when tenants could really bargain with respect to rental properties. Even that only lasted a few years. The pattern seems to be that when it is good for tenants i.e. a surplus of available properties falling rents and plenty of choice some landlords get out of the market, others don't take up the slack and after a while it is as before.
Many landlords are being forced to sell up by the banks and may more will be in the future. At the same time there is very little finance available for BTls so it is not going to get better for tenants any time soon.

gaius c

Rainblow wrote: »

That kind of situation was the norm for a very long time in Dublin. It was only for a few years from 2008 to 2012 there was a tenants market and the tenants could bargain and pick and choose. Before that it was back to the mid 1980s when tenants could really bargain with respect to rental properties. Even that only lasted a few years. The pattern seems to be that when it is good for tenants i.e. a surplus of available properties falling rents and plenty of choice some landlords get out of the market, others don't take up the slack and after a while it is as before.
Many landlords are being forced to sell up by the banks and may more will be in the future. At the same time there is very little finance available for BTls so it is not going to get better for tenants any time soon.

The numbers renting increasing by 50% in the space of only a few years would indicate that they are only temp renters. Once buying becomes an option again, they'll do that as soon as they can.

Nothing in the market makes sense anymore. Rents took a big spike in early 2008 as landlords tried to pass on the cost of interest rate rises to their tenants. This was despite supply piling up to an all-time high until eventually the "dam" broke in mid-2008. The daftwatch graph was heading into outer orbit but prices were still going up so supply-demand took quite a while to kick in there.

Repossessions and freeing up already completed supply in Dublin (like Clancy Quay) could well prove to be another "dam".

awec

I think there will be a few hundred apartments that hit the market in South Dublin over the next few years (Sandyford and Dundrum for example), all new builds and first time lets in what I presume won't be budget accomodation. These are the ones that were sitting unfinished since the arse fell out of it a while ago, work has started on ones in Sandyford and I predict the ones in Dundrum will restart in the next year or two.

It will be interesting to see what happens then, whether the demand exists for those to all be taken up immediately or whether they will drive prices down in the area.

Ray Palmer

gaius c wrote: »

The numbers renting increasing by 50% in the space of only a few years would indicate that they are only temp renters. Once buying becomes an option again, they'll do that as soon as they can.
.

Why will it only be temporary? Lots of people got stung and this has frightened many other people. If lots of repossessions happen those people will be pretty much permanent renters. A large drop in home ownership was always the most predictable out come of the property boom. We had the largest homeownership in the world all things being equal that was going to change.

The bust pretty much cemented that. People of certain ages who held out during the boom are likely never to own now. What you are missing is the huge sea change to the market. There has now been a pretty permanent change to the demographics of who has to rent and do not have the chance of affording to buy. A 40 year old couple with two kids and only one working (now) after having their house repossessed is unlikely to be able to buy a house now, they might inherit else they are renting.

There will be more renters from now on and rents are going to be high for a while as there aren't more rentals in quantity coming onto the market in any major way

The Spider

Ray Palmer wrote: »

Why will it only be temporary? Lots of people got stung and this has frightened many other people. If lots of repossessions happen those people will be pretty much permanent renters.

This!

It's what no one mentions when they talk about repossessions, when (if) all these repos happen, those people evicted have to be housed somwhere, and that'll put more pressure on rents if the houses are sold, ultimately its a zero sum game, lots of houses on the market, means if prices go down rents go up, and vice versa.

gaius c

Ray Palmer wrote: »

Why will it only be temporary? Lots of people got stung and this has frightened many other people. If lots of repossessions happen those people will be pretty much permanent renters. A large drop in home ownership was always the most predictable out come of the property boom. We had the largest homeownership in the world all things being equal that was going to change.

The bust pretty much cemented that. People of certain ages who held out during the boom are likely never to own now. What you are missing is the huge sea change to the market. There has now been a pretty permanent change to the demographics of who has to rent and do not have the chance of affording to buy. A 40 year old couple with two kids and only one working (now) after having their house repossessed is unlikely to be able to buy a house now, they might inherit else they are renting.

There will be more renters from now on and rents are going to be high for a while as there aren't more rentals in quantity coming onto the market in any major way

The 35 year old couple with one kid and another on the way will buy their house and the house they used to rent will become available. It's not like stock self-destructs when a tenant vacates it.

You're also forgetting the stock that can't sell but isn't being rented either. If the bank are happy to keep kicking the can down the road, stock that is costing money and not earning anything can continue to do so. You cannot consider the rental logjam and refuse to connect to the sales logjam.

We built like maniacs for over a decade and we've the lowest population density in Western Europe. There's no shortage of housing stock. We also have net emigration in people under 30, the key renting and FTB cohort. It took 6 months to flush price stickiness out of the system in 2008 as landlords realised some cash was better than no cash at all. This logjam is taking longer to flush because this time, the state is effectively saying "we can remain insolvent longer than you can remain rational".

Ray Palmer

The Spider wrote: »

This!

It's what no one mentions when they talk about repossessions, when (if) all these repos happen, those people evicted have to be housed somwhere, and that'll put more pressure on rents if the houses are sold, ultimately its a zero sum game, lots of houses on the market, means if prices go down rents go up, and vice versa.

You see that assumes it is happening in a vacuum. The normal demand for rental remains as people get older. All those kids who were living at home who normally filled the rental property are going to go where? It isn't a zero sum game. It will not cancel each other out. It is a seismic shift in attitude and market happening. Break ups of marriages have increased too. That isn't one property now but 2 required!

If you noticed housing development has stopped. The demand is increasing but no stock is being increased. Not all properties are good for renting so will be purchased the old family now are competing for the rental properties in lower market areas (the have debts and can only afford cheaper rent). The new family may have been living at home, college dorm, shared housing, small apartments etc... Not a like for like replacement. While there are empty properties these are not exceptional in highly populated areas e.g. Dublin. There is actually a housing shortage brewing the same way there was a boom brewing. A scared market does not make good decisions and we have a scared market.

StillWaters

gaius c wrote: »

We built like maniacs for over a decade and we've the lowest population density in Western Europe. There's no shortage of housing stock. some cash was better than no cash at all".

there is a shortage of the type of housing people want to live in, in the area they want to live in.

gaius c

Ray Palmer wrote: »

The normal demand for rental remains as people get older. All those kids who were living at home who normally filled the rental property are going to go where?

Old people don't die and young people don't emigrate on Planet Ray?

StillWaters

gaius c wrote: »

Old people don't die and young people don't emigrate on Planet Ray?

It is not a zero sum game. Ireland has a growing population, and in fact is predicted to have the highest growth in the EU according to Eurostat.
Why do you think we are embarking on the largest school building programme in a generation?
http://airo.ie/news/europe-2060-population-projections-ireland-increase-465-interact-data

Ray Palmer

gaius c wrote: »

Old people don't die and young people don't emigrate on Planet Ray?

It is really very simple more people will be renting than before and the number of rental properties has not and no plans to cater for this. If you are hoping people emigrate and die at a quicker rate to deal with this it isn't much of a plan.

There are more people afraid and unwilling to buy. The normal rate these would come out of the rental market has been disrupted and likely be permanently changed. People are staying in education longer too. It would be incredible wishful thinking to say this will have negligible effects on the rental market

gaius c

StillWaters wrote: »

It is not a zero sum game. Ireland has a growing population, and in fact is predicted to have the highest growth in the EU according to Eurostat.
Why do you think we are embarking on the largest school building programme in a generation?
http://airo.ie/news/europe-2060-population-projections-ireland-increase-465-interact-data

Children don't form households of their own and they won't for at least 18 years. They live in the households already formed by their parents. The people who should be forming new households are leaving the country or can't get work. The 70's baby boom is working itself out of the system now and the birthrate declined considerably after that. So we're depending on a smaller group of new household formers to pay through the nose when they are all emigrating anyway.

The source in your link assumes that nobody of that baby boom emigrates which is not in line with any extended period of Irish history since the famine and as such, smacks of Marc Colemanomics. It also assumes that the current spike in birthrate is maintained, which is nonsensical as baby booms are as cyclical as every other type of boom.

Ray Palmer wrote: »

It is really very simple more people will be renting than before and the number of rental properties has not and no plans to cater for this. If you are hoping people emigrate and die at a quicker rate to deal with this it isn't much of a plan.

There are more people afraid and unwilling to buy. The normal rate these would come out of the rental market has been disrupted and likely be permanently changed. People are staying in education longer too. It would be incredible wishful thinking to say this will have negligible effects on the rental market

I'm not hoping anything, just providing a counterpoint to property bulls who appear to think that 900-100 per month rent for the cheapest houses in a small capital city in a bankrupt country on the western seaboard of Europe somehow constitutes good and sustainable value.

Rainblow

gaius c wrote: »

I'm not hoping anything, just providing a counterpoint to property bulls who appear to think that 900-100 per month rent for the cheapest houses in a small capital city in a bankrupt country on the western seaboard of Europe somehow constitutes good and sustainable value.

Who said anything constitutes good and sustainable value? If you were objective you would see that prices are what they are because of supply and demand, not because they must conform to some ideal of good and sustainable value, whatever that is.

Richard Dower

Ray Palmer wrote: »

Why will it only be temporary? Lots of people got stung and this has frightened many other people. If lots of repossessions happen those people will be pretty much permanent renters. A large drop in home ownership was always the most predictable out come of the property boom. We had the largest homeownership in the world all things being equal that was going to change.

The bust pretty much cemented that. People of certain ages who held out during the boom are likely never to own now. What you are missing is the huge sea change to the market. There has now been a pretty permanent change to the demographics of who has to rent and do not have the chance of affording to buy. A 40 year old couple with two kids and only one working (now) after having their house repossessed is unlikely to be able to buy a house now, they might inherit else they are renting.

There will be more renters from now on and rents are going to be high for a while as there aren't more rentals in quantity coming onto the market in any major way

+1....many people were already long term renterd during the boom, rents went up....they were being told rent was dead money and get on the ladder.

so they did....and got burned, so they are back to renting and probably for a very long time and are saddled with huge debts.

you then have the couples with kids who sold the family home to get a quick cash grab....they buy a new house to sell in 5 years for more profit....bam, original family home gone as is the new one....and they are now renting.

gaius c

Rainblow wrote: »

Who said anything constitutes good and sustainable value? If you were objective you would see that prices are what they are because of supply and demand, not because they must conform to some ideal of good and sustainable value, whatever that is.

A major factor in our high cost base remaining high will have a knock on effect for the rest of the economy. Despite high unemployment, industries that could employ lower skilled people are still unviable because of high costs, the wage requirements to put a roof over your head being one such cost.

Rainblow

gaius c wrote: »

A major factor in our high cost base remaining high will have a knock on effect for the rest of the economy. Despite high unemployment, industries that could employ lower skilled people are still unviable because of high costs, the wage requirements to put a roof over your head being one such cost.

What has that got to do as to whether it is a landlords market or not?

Ray Palmer

gaius c wrote: »

I'm not hoping anything, just providing a counterpoint to property bulls who appear to think that 900-100 per month rent for the cheapest houses in a small capital city in a bankrupt country on the western seaboard of Europe somehow constitutes good and sustainable value.

If you are going to make a counter point it has to be relevant and actually counter the point.

As for your description of Dublin you seem to have messed up. It is the capital city of a country that has a thriving financial services industry catering for the rest of the world. One of the top software and pharmaceutical producers in the world. Our tourist industry still does well.

We are not bankrupt it is simply not true to say we are.


Houses are not being built
Less people are buying
People staying longer in education and therefore renting


Are reason for potential rent increases as supply dries up. The property stock is like a conveyor belt if people can't go anywhere it backs everything up. That effects rent supply , demand and prices.

intellectual dosser

I'm in a bit of an accommodation predicament at the moment, a housemate is moving out leaving the rest of us to cover the rent unless we find a suitable replacement, which has been fruitless to date. We decided one solution would be if the landlord would reduce the rent by 10%, those of us remaining could afford to stay. We had the agents backing for this, but landlord decided that he was at his wits end financially and couldnt do it.

The house beside us is for rent, vacant for a while. It doesnt make sense that the landlord would prompt us to move out and lose 100% rent per month instead of 10%. I really didnt expect him to decline. We've been perfect tenants for 3 years.

Rant over, but I guess I was recently surprised to find that landlords think they still hold favour.

The Spider

intellectual dosser wrote: »

I'm in a bit of an accommodation predicament at the moment, a housemate is moving out leaving the rest of us to cover the rent unless we find a suitable replacement, which has been fruitless to date. We decided one solution would be if the landlord would reduce the rent by 10%, those of us remaining could afford to stay. We had the agents backing for this, but landlord decided that he was at his wits end financially and couldnt do it.

The house beside us is for rent, vacant for a while. It doesnt make sense that the landlord would prompt us to move out and lose 100% rent per month instead of 10%. I really didnt expect him to decline. We've been perfect tenants for 3 years.

Rant over, but I guess I was recently surprised to find that landlords think they still hold favour.

If you're renting in Dublin, tough titty's the landlord'll have that rented in a week, they won't lose 100% rent, and if you've been there three years, then the landlord will get more than he's currently getting for it from you, as for the house next door being vacant, is it to let? or is it just vacant, if the latter then there could be any number of reasons why.

Only option you guys have is to stump up the rent, get someone in or move on. Don't see why the landlord should take a hit because your circumstances change.

gaius c

Rainblow wrote: »

What has that got to do as to whether it is a landlords market or not?

The conversation has drifted. We all agree that at this very moment in time, supply is tight and rents are slowly being pushed up but looking forward, this may not continue to be the case. However, it isn't 100% a landlord's market right now. Tenants still have quite a lot of pricing power. Supply on daft (for Dublin) is less than a quarter of what it was 4 years ago, yet rents are only up by percentage points. Does that not strike anybody as odd?

Right now, some landlords are starting to believe the hype, get greedy and are sticking 10% onto their asking prices with the noticeable effect that vacancy periods for higher priced properties are increasing while keener priced stock goes almost immediately. There's lots of demand hunting limited stock but they are very value conscious.

Experiencing this directly ourselves. We're moving house and the house we're leaving is overpriced. 3 viewings later with about 50 people in & out the door and they haven't even got a lowball offer.
House we're moving to was very keenly priced and got let less than 24 hours after the first viewing We're saving €250 a month between our new rent and the asking rent for what we're leaving so on a macro level (us), that's a big rental drop. Will it be made up by people paying more for the house we're leaving? The fact that nobody has even made a lowball offer makes me think the landlord will probably end up with the same rent as we were paying.

Same thing with our rented out apartment, we priced slightly lower than other apartments in the block. Result was no vacancy period while others were empty for 2-3 weeks. We also got our pick of tenants (not something to be sniffed at).

So in summary, the demand side of the equation is very value-hungry and any increase at all to the supply side of the equation will see prices drop quickly but that same hunger for value has and will continue to cause "resistance" to rent rises.

intellectual dosser

The Spider wrote: »

If you're renting in Dublin, tough titty's the landlord'll have that rented in a week, they won't lose 100% rent, and if you've been there three years, then the landlord will get more than he's currently getting for it from you, as for the house next door being vacant, is it to let? or is it just vacant, if the latter then there could be any number of reasons why.

Only option you guys have is to stump up the rent, get someone in or move on. Don't see why the landlord should take a hit because your circumstances change.

It's not in Dublin. The house next door is for rent, our agent admitted our house would be difficult to occupy quickly.

The Spider

intellectual dosser wrote: »

It's not in Dublin. The house next door is for rent, our agent admitted our house would be difficult to occupy quickly.

Ah different kettle of fish so, you may indeed have the power in this situation, and if it's that difficult then the landlord'd do well to realise where he's at.

StillWaters

The Spider wrote: »

Ah different kettle of fish so, you may indeed have the power in this situation, and if it's that difficult then the landlord'd do well to realise where he's at.

Rents are rising not just in Dublin. Certain other urban areas are too. No way would I accept a 10% cut in rent.

Pawwed Rig

StillWaters wrote: »

Rents are rising not just in Dublin. Certain other urban areas are too. No way would I accept a 10% cut in rent.

If the market rate is 10% less then I would have no choice but to accept. Also there are many parts of the country that you may be waiting extended periods of time to find a new tenant. I would rather give a 10% cut to a good tenant than have an empty property for a month with the uncertainty that a new tenant comes with.
Bear in mind rent allowance has been cut in many parts of the county too so the rent floor has just gotten lower again.

The Spider

StillWaters wrote: »

Rents are rising not just in Dublin. Certain other urban areas are too. No way would I accept a 10% cut in rent.

Either would I, but our apartment is in Dublin, depends where this is, again all about location.