What is your opinion of the future of property prices?

murphaph

natali1982 wrote: »

Where is that?

I guess Leixlip...Confey/Louisa Bridge stations and the 66, 66a and 66b buses.

jay0109

horsesfc88 wrote: »

Thanks for the response

So as in January of next year the exemption will be gone?

Do you really think the difference will be felt in the market?

That exemption was to have ended in Dec 2013, but Noonan decided to help the investors out for 1 more year and extended it through to 2014.
I won't be shocked if he does it again....very angry but not shocked

Daithi_2014

jay0109 wrote: »

That exemption was to have ended in Dec 2013, but Noonan decided to help the investors out for 1 more year and extended it through to 2014.
I won't be shocked if he does it again....very angry but not shocked

Only being able to deduct 75% of interest will be back to 100% of interest very soon.
While popular opinion assumes that its the landlord paying for this, its actually the tenant who pays.

I wouldnt be surprised to see landlords eventually treated like any other business for tax purposes.

Revenue were very smart when they had people delighted and calling for extra chargers for landlords over the years. They knew that not only were they going to get extra money from the landlord, but the landlord would have to pass on these, plus the extra taxes to be paid on the "profit", right back to the tenant.

So now revenue make double and the tenant is the one footing the bill at the end of the day. This is all showing up now in rising rents. Its common sense that a business who have extra costs, must pass on those costs to the customer as soon as the market will take it, plus a margin for security against another surprise rise in costs that might be added in the future.

Bobeagleburger

Daithi_2014 wrote: »

Only being able to deduct 75% of interest will be back to 100% of interest very soon.
While popular opinion assumes that its the landlord paying for this, its actually the tenant who pays.

I wouldnt be surprised to see landlords eventually treated like any other business for tax purposes.

Revenue were very smart when they had people delighted and calling for extra chargers for landlords over the years. They knew that not only were they going to get extra money from the landlord, but the landlord would have to pass on these, plus the extra taxes to be paid on the "profit", right back to the tenant.

So now revenue make double and the tenant is the one footing the bill at the end of the day. This is all showing up now in rising rents. Its common sense that a business who have extra costs, must pass on those costs to the customer as soon as the market will take it, plus a margin for security against another surprise rise in costs that might be added in the future.

Its a supply and demand thing now particularly in Dublin and the same will happen in other cities and sought after areas too.

If you're willing to move to a commuter town for example you can pick houses for peanuts.

Villa05

Daithi_2014 wrote: »

. Revenue were very smart when they had people delighted and calling for extra chargers for landlords over the years. They knew that not only were they going to get extra money from the landlord, but the landlord would have to pass on these, plus the extra taxes to be paid on the "profit", right back to the tenant.

So now revenue make double and the tenant is the one footing the bill at the end of the day. This is all showing up now in rising rents. Its common sense that a business who have extra costs, must pass on those costs to the customer as soon as the market will take it, plus a margin for security against another surprise rise in costs that might be added in the future.

I think these taxes were used to discourage amateur landlords and it has been offset by allowing the setting up of tax efficient REITS which bulk buy properties. These REITS have the structure and economies of scale to deliver an efficient cost effective service to renters and they will eventually push out the amateurs. All in All it looks like a positive for housing into the future, hopefully

Villa05

jay0109 wrote: »

That exemption was to have ended in Dec 2013, but Noonan decided to help the investors out for 1 more year and extended it through to 2014.
I won't be shocked if he does it again....very angry but not shocked

April 2014 (not the 1st I hope)

FINANCE Minister Michael Noonan said he won't be renewing the capital gains tax (CGT) relief on properties that have been held for seven years in Budget 2015 because there was, he said, a "wall of money" in the commercial property sector at the moment

iguana

Daithi_2014 wrote: »

but the landlord would have to pass on these, plus the extra taxes to be paid on the "profit", right back to the tenant.

That's complete nonsense tbh; 'My costs have gone up, so your rent is going up' isn't legal. It may work in the small few areas of the country where demand is meeting/outgrowing supply. But that's only because demand is raising the market value. In the rest of the country landlords haven't a hope of raising the rent as it's illegal to raise the rent above market rates and if they insist on trying the tenant can dispute it through the PRTB/just move to one of the myriad of other properties around.

Ray Palmer

iguana wrote: »

That's complete nonsense tbh; 'My costs have gone up, so your rent is going up' isn't legal. It may work in the small few areas of the country where demand is meeting/outgrowing supply. But that's only because demand is raising the market value. In the rest of the country landlords haven't a hope of raising the rent as it's illegal to raise the rent above market rates and if they insist on trying the tenant can dispute it through the PRTB/just move to one of the myriad of other properties around.

It isn't an issue about legality it is a pressure that effects the market. Supply and demand is much more complex than people like to talk about. Supply is determined by the willingness to supply at a given price. If expenses rise the willingness to supply has a higher price. The market rate is determined by supply. Any increases in cost eventually are passed on to the tenant it is just a matter of time.

gaius c

bidiots wrote: »

This guy probably

Ah cute, I have an online stalker now.

iguana

Sure on paper. In reality the country has a massive oversupply of properties and owners who are faced with the choice of renting them and having them bring in some sort of income, even at a loss, or let them empty bringing in no income while they physically deteriorate from being empty. It's going to be a long, long time in most areas before landlords can pass on their costs.

gaius c

JohnFalstaff wrote: »

OK, a 2 bed apartment in Salthill just sold for 492K!! :eek:

Now it's a very nice apartment in a very desirable location but AMV was 250K!

This is officially getting towards bubble territory.

A different Salthill but apparently this 3 bed apartment has sold for €850k.
Service charge is €2,765 a year.

Zzyzx

gaius c wrote: »

A different Salthill but apparently this 3 bed apartment has sold for €850k[/URL].
Service charge is €2,765 a year.

That is completely unsustainable, what the hell is fueling this current bubble?. My opinion is that all signs are pointing to a double-dip style graph in relation to property prices. These recent sales are madness. A 3 bedroom apartment in need of decoration for the guts of a million euro. FFS! It's Dun Laoghaire, not Manhattan.

I'm not just saying this because that's what I want to happen. As someone who is interested in purchasing a property in the next few years, I am going to tread with extreme caution. Obviously this level of price inflation cannot go on long term, I just hope it's not as long and drawn out as the last bubble :-(

bidiots

gaius c wrote: »

Ah cute, I have an online stalker now.

Me too by the look of it!

Ray Palmer

iguana wrote: »

Sure on paper. In reality the country has a massive oversupply of properties and owners who are faced with the choice of renting them and having them bring in some sort of income, even at a loss, or let them empty bringing in no income while they physically deteriorate from being empty. It's going to be a long, long time in most areas before landlords can pass on their costs.

It doesn't matter if there is a abundance of property about. If it isn't in the rental market then it isn't part of the supply. Property owners can and do decide not to rent at a loss. You are only thinking of individuals making a loss and deciding to rent at a loss. Many companies own property at will quite happily not rent in the market and reduce returns on other property. People don't like it but that is supply and demand theory in practice.
Rent has gone up LL are passing on increased costs. It just took time. It is everybody's interest to prevent additional costs on LL if they want to keep or increase supply. Location counts for a lot when it comes to property this is demand part, doesn't matter if there is an over supply it has to be in the right place.

gaius c

Ray Palmer wrote: »

It doesn't matter if there is a abundance of property about. If it isn't in the rental market then it isn't part of the supply. Property owners can and do decide not to rent at a loss. You are only thinking of individuals making a loss and deciding to rent at a loss. Many companies own property at will quite happily not rent in the market and reduce returns on other property. People don't like it but that is supply and demand theory in practice.
Rent has gone up LL are passing on increased costs. It just took time. It is everybody's interest to prevent additional costs on LL if they want to keep or increase supply. Location counts for a lot when it comes to property this is demand part, doesn't matter if there is an over supply it has to be in the right place.

Absolute nonsense. Sitting on a property that is unlet makes less of a loss than letting it out for lower than the loan repayments???

Cuddlesworth

gaius c wrote: »

Absolute nonsense. Sitting on a property that is unlet makes less of a loss than letting it out for lower than the loan repayments???

You seem to be forgetting the thousands of people who don't actually pay their mortgages in this country.

Daithi_2014

iguana wrote: »

That's complete nonsense tbh; 'My costs have gone up, so your rent is going up' isn't legal. It may work in the small few areas of the country where demand is meeting/outgrowing supply. But that's only because demand is raising the market value. In the rest of the country landlords haven't a hope of raising the rent as it's illegal to raise the rent above market rates and if they insist on trying the tenant can dispute it through the PRTB/just move to one of the myriad of other properties around.

Fair enough. If you want to bury your head in the sand go for it.

Frank Lee Midere

Zzyzx wrote: »

That is completely unsustainable, what the hell is fueling this current bubble?. My opinion is that all signs are pointing to a double-dip style graph in relation to property prices. These recent sales are madness. A 3 bedroom apartment in need of decoration for the guts of a million euro. FFS! It's Dun Laoghaire, not Manhattan.

I'm not just saying this because that's what I want to happen. As someone who is interested in purchasing a property in the next few years, I am going to tread with extreme caution. Obviously this level of price inflation cannot go on long term, I just hope it's not as long and drawn out as the last bubble :-(

The thing is they know they will probably not lose the property. Because we've decided to do that.

iguana

Ray Palmer wrote: »

It doesn't matter if there is a abundance of property about. If it isn't in the rental market then it isn't part of the supply. Property owners can and do decide not to rent at a loss. You are only thinking of individuals making a loss and deciding to rent at a loss.

But in most of the country it is on the market and there is a significant over supply in many areas. Landlords can't up the rent regardless of their increasing costs, because the market rate is stagnant. And it is nonsensical to try to put the rent up above the market rate when you have very limited demand and illegal to try to do it to existing tenants.

Frank Lee Midere

Daithi_2014 wrote: »

Fair enough. If you want to bury your head in the sand go for it.

He's arguing perfectly rationally. Rents are set by demand and supply. And that alone. Costs can't be passed on. If you think they can and you are a landlord you need to stop investing.

Daithi_2014

Ray Palmer wrote: »

It doesn't matter if there is a abundance of property about. If it isn't in the rental market then it isn't part of the supply. Property owners can and do decide not to rent at a loss. You are only thinking of individuals making a loss and deciding to rent at a loss. Many companies own property at will quite happily not rent in the market and reduce returns on other property. People don't like it but that is supply and demand theory in practice.
Rent has gone up LL are passing on increased costs. It just took time. It is everybody's interest to prevent additional costs on LL if they want to keep or increase supply. Location counts for a lot when it comes to property this is demand part, doesn't matter if there is an over supply it has to be in the right place.

A company I do some work for now and again own about 10 apartments that they bought at the peak of the boom times. They let contractors who they hire from other countries stay there rent free for the first couple of months when they arrive in Ireland as a bit of a sweetener to attract them here.
Im told it works out better for them tax wise that way instead of renting them out.

Frank Lee Midere

Ray Palmer wrote: »

It doesn't matter if there is a abundance of property about. If it isn't in the rental market then it isn't part of the supply. Property owners can and do decide not to rent at a loss. You are only thinking of individuals making a loss and deciding to rent at a loss. Many companies own property at will quite happily not rent in the market and reduce returns on other property. People don't like it but that is supply and demand theory in practice.
Rent has gone up LL are passing on increased costs. It just took time. It is everybody's interest to prevent additional costs on LL if they want to keep or increase supply. Location counts for a lot when it comes to property this is demand part, doesn't matter if there is an over supply it has to be in the right place.

The amount of property owned by companies in Ireland is minuscule. Not that not letting a property to push up prices makes sense anyway - a few unlet properties will not sway the market but the loss is revenue per month is significant. The only way that would work is a cartel.

The guy with a mortgage has to rent.

There are no doubt landlords sitting on property , not paying mortgages to their taxpayer owned properties, and not renting. We need to seize their properties and bankrupt them. Not that that's very large.

Daithi_2014

Frank Lee Midere wrote: »

He's arguing perfectly rationally. Rents are set by demand and supply. And that alone. Costs can't be passed on. If you think they can and you are a landlord you need to stop investing.

So you think a businesses costs cant be passed on. I give up.

Frank Lee Midere

Daithi_2014 wrote: »

So you think a businesses costs cant be passed on. I give up.

That's a joke of a reply. In no free market business can business costs be passed on unless demand can take it. The only thing that affects rental costs is supply and demand. That's it. That is all. Economics 101.

If a landlord has to pay more property taxes or rates he can try pass them on but if there is an over supply of rental properties his tenants will leave for the guy not passing them on.

When interest rates go up rents won't necessarily follow. Which is why somewhere in the next few years another crisis looms.

Ray Palmer

gaius c wrote: »

Absolute nonsense. Sitting on a property that is unlet makes less of a loss than letting it out for lower than the loan repayments???

You really need to learn some economics. I never said the above you just don't understand what was said. You can only see this from an small time investors point of view. There are offices all around Dublin that are empty because it is better from an accounting point of view. Same with retail units.
It is more expensive to rent out more property. Add to that if you rent out the property you lower the return from your rented property. You devalue your existing property portfolio. So your return on property goes down but you do more work and have an increased liability.
This is actually a big part of what NAMA are doing in the market. You can dislike it but that is reality.
You should really look up what supply and demand really is. It isn't all demand nor supply it is a combination. Nobody will not supply property below a certain return in each case. This applies at a micro and macro level.

If what you say is true rents should be dropping, it isn't. People like to say something is only worth what people are willing to pay and forget that things aren't being offered for sale at these prices means there is no supply. If there is no supply and there is a demand prices rise. Supply increases as prices/demand rise.

Ray Palmer

Frank Lee Midere wrote: »

The amount of property owned by companies in Ireland is minuscule. Not that not letting a property to push up prices makes sense anyway - a few unlet properties will not sway the market but the loss is revenue per month is significant. The only way that would work is a cartel.

The guy with a mortgage has to rent.

There are no doubt landlords sitting on property , not paying mortgages to their taxpayer owned properties, and not renting. We need to seize their properties and bankrupt them. Not that that's very large.

You assume all property that can be rented has a mortgage. That is not the case. Lots of people die and leave property to relatives. They will quite often choose to wait to sell or rent. Think of all the people that die in this country and you realise that is a lot of property.

I can assure you businesses do choose to not rent out property as it would effect the rest of their portfolio. Lots of insurance and investment companies own property and it isn't all about residential property. If you look up the debates on upward only rents you will see people talking about this.

gaius c

Cuddlesworth wrote: »

You seem to be forgetting the thousands of people who don't actually pay their mortgages in this country.

Fair point (and some properties won't have mortgages at all) but it's still going to be 0% return on investment and if actually letting it out makes a -% ROI and letting is your core business, then that business model really needs some questioning.

jmayo

GavMan wrote: »

This is only relevant if you view your purchase as an investment. Which many, like myself, don't.

This worries me and is basic economics as another poster mentions.
I would say it is also common sense.
People appear to think it is ok to pay a high price, probably much more than it should be worth, on a property if you intend on staying there long term and don't need to sell in short term.

Yeah from capital appreciation point of view that could work out ok given the way property usually moves along over time and bringing in inflation.

What this doesn't consider is the cost in the short to medium term.
If you are having to service a massive mortgage then there is very little left in terms of disposable income.
One has to think what percentage of their take home pay is too much to paying for accommodation.
And if you are trapped with massive mortgage that may be in negative equity then there is no room for manoeuvre if something unexpected occurrs such as sickness, job loss, etc.

GavMan wrote: »

Some people can't simply sit around and wait for a crash that may or may not come and if it does, could take years to arrive

True, there is an issue for families long term renting.
There isn't the security of tenure that is in some other countries and contrary to what some may think there isn't the flexibility of movement if children are involved.

gaius c wrote: »

A different Salthill but apparently this 3 bed apartment has sold for €850k.
Service charge is €2,765 a year.

Nice enough area and right beside the dart, but saddling oneself with that annual service charge on top of the upfront price is looney tunes land.

Cuddlesworth

gaius c wrote: »

Fair point (and some properties won't have mortgages at all) but it's still going to be 0% return on investment and if actually letting it out makes a -% ROI and letting is your core business, then that business model really needs some questioning.

I could be wrong on this but I was told before by a individual who is heavily invested into residential property in Dublin, that he leaves propertys empty as he can claim back the "rent" lost against his taxable income on the other houses. Keeps the maintenance down as well as reducing the risk of large losses from vandalism etc.

Ray Palmer

Cuddlesworth wrote: »

I could be wrong on this but I was told before by a individual who is heavily invested into residential property in Dublin, that he leaves propertys empty as he can claim back the "rent" lost against his taxable income on the other houses. Keeps the maintenance down as well as reducing the risk of large losses from vandalism etc.

Yes very plausible. It is even plausible that letting a property out at a loss makes sense for a while if you have a tenant paying less than the market rate. They could be waiting for capital appreciation before selling which lets you end a part 4 tenancy.
With the tax rates as they are going to a load of hassle of getting rid of a tenant may not be worth your while as you only get 48% of the increase after tax.
Waiting to refurbish a house has a similar issue.