Property Market 2016

El_Dangeroso

Sleepy wrote: »

So many people that have watched too many home improvement shows are convinced they can "add value" to fixer uppers that the margin between what buyers will pay for a "hang up your coat" versus a "project" is minuscule in Ireland. There's often less than 10k between the sales price of a house in good condition versus one that needs 20/30k spent on it.

(says the guy buying a project house that needs 20k or more spent on it!) :pac:

I've not found that to be the case in Galway city. Here it's a case of no discount for a house that needs repair but a massive premium for a house that needs no immediate work.

I agree that sometimes that is not the case but in those cases the person who did up the house did a poor job or made an awkward layout, cheap materials or just in a very personal taste.

Cuddlesworth

I'll agree with the lack of value in the Dublin market in regards houses that need work. The major difference to me though is the houses that have not been updated but have been looked after, versus houses that are in bits both in look and structure. Your talking about the difference between 5 to 10k versus 30k+ and yet the latter expects to sell at the same price. I think with the tighter lending controls people are at least waking up to the lack of value in these property's.

Dinny Byrne has Angina

Shedite27 wrote: »

Rent is Income for landlords.

If you had the choice to increase your income (say a salary increase), would you take it?

Not to unsustainable levels, no.

In the last phase of rapid house-price inflation, the opportunism of landlords and property investors ultimately shot the industry in the foot and ultimately destroyed their incomes.

If I start demanding an unsustainable wage, or charging consumers an unsustainable price for a service, I can be certain that my future income will suffer.

This isn't rocket science. It should be obvious. Naked opportunism is bad for business unless there is value added.

It;s probably pointless expecting a rational, forward-thinking property market in Ireland, however, with so many 'part-time' landlords who really have no business calling themselves landlords. It should be left to the professionals, who are in a position to charge sustainable rents and cultivate a healthy rental industry.

Too many cowboys around.

The_Conductor

Dinny Byrne has Angina wrote: »

It;s probably pointless expecting a rational, forward-thinking property market in Ireland, however, with so many 'part-time' landlords who really have no business calling themselves landlords. It should be left to the professionals, who are in a position to charge sustainable rents and cultivate a healthy rental industry.

Too many cowboys around.

However- the flipside of the coin is the government have cultivated a notion that everyone has a right to own property- while simultaneously allowing local authorities divest of their housing stock- and abdicating responsibility for the provision of housing to those unable to house themselves- to the private sector.

Meanwhile- they tax the private sector- quite unlike any other industry- and encourage them to load property with as much debt as possible- and not to pay down this debt- as its the major deductible expense before determination of taxable income.

Its a hell of a mess- and its no wonder there are so many part time landlords out there- sure you were able to buy property for effectively no cost......

If a landlord has been prudent- and paid down their loans- they are now subject to taxation and levies in excess of 55%- which is nuts.

The whole sector- from the perspective of every interested group- tenants, landlords, owners, residential and commercial- is rotten to the core.

As usual- anyone who shouts and yells- gets listened to- so we've ended up with legislation wholly unsuited to the situations encountered on a daily basis.

El_Dangeroso

Mortgage drawdowns up on last year despite CB rules:

http://www.businesspost.ie/comment-mortgage-figures-paint-surprising-picture-despite-tough-lending-rules/

newacc2015

Dinny Byrne has Angina wrote: »

Not to unsustainable levels, no.

In the last phase of rapid house-price inflation, the opportunism of landlords and property investors ultimately shot the industry in the foot and ultimately destroyed their incomes.

If I start demanding an unsustainable wage, or charging consumers an unsustainable price for a service, I can be certain that my future income will suffer.

This isn't rocket science. It should be obvious. Naked opportunism is bad for business unless there is value added.

It;s probably pointless expecting a rational, forward-thinking property market in Ireland, however, with so many 'part-time' landlords who really have no business calling themselves landlords. It should be left to the professionals, who are in a position to charge sustainable rents and cultivate a healthy rental industry.

Too many cowboys around.

People seem to forget that rental prices were higher in 2007. Rent dropped far too low around 2010 as there was excessive supply. Demand has risen and rents are probably close to their fair price. Some people cant understand that renting a 2 bed apartment in the middle of Dublin 1 for €1200 was sustainable.

If the rental business is so profitable and easy. Why are so many landlords selling? Obviously it still isnt profitable enough for the amount of work involved. The taxes are huge and the laws entirely favour the tenant. Go to the NCR and see all the Pre 63s being turned into owner occupier homes.

It is quite naive to think a Texas company or any of the Irish REITS who brought blocks of cheap apartments are going to charge a more 'sustainable rent'. In fact they are probably going to be more aggressive with handing out rent increases, as their only concern is their bottom line.

There is nothing stopping you renting an apartment from an REIT. They have thousands of apartments in Dublin. But dont be surprised when the letter comes every 2 years with a rent increase with a sizeable rent increase, as they are acting like a business. A PLC's only concern is what their quarterly earnings will be. If you think massive PLC's will result in cheaper rents, you are massively mistaken

RandomAccess

newacc2015 wrote: »

You are quite naive to think a Texas company or any of the Irish REITS who brought blocks of cheap apartments are going to charge a more 'sustainable rent'. In fact they are probably going to be more aggressive with handing out rent increases, as their only concern is their bottom line.

The building I occupy was purchased by a German REIT, the market is like fish in a barrel and they have increased rent accordingly so I don't see them being a benevolent force in the Irish property landscape.

These bigger property monopolies have a lot of power to set prices. Clancy Quay also demonstrates this tendency. These are the kind of models that resulted in upward only rent reviews for commercial property. They will protect their earnings.

whiskeyman

El_Dangeroso wrote: »

Mortgage drawdowns up on last year despite CB rules:

http://www.businesspost.ie/comment-mortgage-figures-paint-surprising-picture-despite-tough-lending-rules/

With many of the exceptions being exhausted towards late last year, I remember many banks advising (where possible) for many of their clients to hold off on drawing down their mortgage until the new year until the exceptions 'refreshed'.
I wouldn't be surprised if this caused the apparent increase for the first 3 months of the year.

Also, this shows the CB rules are having an impact:

Those figures, again from BPFI, pointed to a 13.7 per cent dip in the overall number of mortgage approvals in the first quarter of this year versus the first quarter of last year.

El_Dangeroso

whiskeyman wrote: »

With many of the exceptions being exhausted towards late last year, I remember many banks advising (where possible) for many of their clients to hold off on drawing down their mortgage until the new year until the exceptions 'refreshed'.
I wouldn't be surprised if this caused the apparent increase for the first 3 months of the year.

Also, this shows the CB rules are having an impact:

Yes but as the article states you'd expect approvals to be down given the 'rush' to get in before the CB rules last year.

I think the overall drawdown figures are more meaningful, but you are right these could be bouyed by all the exemptions being used up in the early part of the year, time will tell.

El_Dangeroso

http://www.rte.ie/news/business/2016/0509/787163-aib-cuts/

Nice one, though I'm going to go with Ulster bank who are offering 3.2% if you switch current accounts with them and €1,500 towards solicitors fees.

Jake Stiles

That is good news from AIB with the rate cut for many variable rate mortgage holders.

Should force other banks to bring their's down too, or lose out on business.

Frank Money looking to enter the market and competition for switchers should help to bring more competitive rates for the Irish market.

Letree

Jake Stiles wrote: »

That is good news from AIB with the rate cut for many variable rate mortgage holders.

Should force other banks to bring their's down too, or lose out on business.

Frank Money looking to enter the market and competition for switchers should help to bring more competitive rates for the Irish market.

Is EBS covered too

MAJJ

Letree wrote: »

Is EBS covered too

Nope nor Haven, unfortunately.

Shedite27

Good point by RTE economics guy yesterday, that with the government threatening to impose legislation on mortgage rates, this might be the banks making an optional move on their own, rather than having some legislation imposed on them.

AIB and KBC down yesterday, presumably more to follow

Bob24

So rents in Dublin are now higher than they were at the top of the boom in 2008: http://www.irishtimes.com/business/renting-in-dublin-now-costs-more-than-bubble-era-peak-1.2641358

If nothing is done, at some point this will have to seriously push property prices upwards? (I don't want to think like this myself, but even if prices are crazy high, some will say "at least the mortgage repayments are lower than the rent")

SarahMollie

Bob24 wrote: »

So rents in Dublin are now higher than they were at the top of the boom in 2008: http://www.irishtimes.com/business/renting-in-dublin-now-costs-more-than-bubble-era-peak-1.2641358

If nothing is done, at some point this will have to seriously push property prices upwards? (I don't want to think like this myself, but even if prices are crazy high, some will say "at least the mortgage repayments are lower than the rent")

One thing no one seems to be pointing out is that in real terms, they're actually much higher than 2008, because back then there were some tax relief schemes for tenants to claim back a portion of their rent. Now the tenant is paying every cent from their net income.

draiochtanois

This post has been deleted.

SarahMollie

draiochtanois wrote: »

This post has been deleted.

I think you'll find that while some have had wage increases, a lot of peoples wages have remained quite stagnant, or now have a reduced net income.

whiskeyman

Bob24 wrote: »

If nothing is done, at some point this will have to seriously push property prices upwards? (I don't want to think like this myself, but even if prices are crazy high, some will say "at least the mortgage repayments are lower than the rent")

But higher rents mean that many of those saving for mortgage deposits will now have to wait longer, so perhaps less full ready buyers able to come on the market.

lawred2

SarahMollie wrote: »

draiochtanois wrote: »

Or not because you have to factor in inflation / wage increases / minimum wage increase

I think you'll find that while some have had wage increases, a lot of peoples wages have remained quite stagnant, or now have a reduced net income.

Not a hope have wage increases kept pace with rent increases

Not a hope

draiochtanois

This post has been deleted.

Bob24

draiochtanois wrote: »

This post has been deleted.

No surprise indeed (and it will likely keep going higher if nothing is done). But doesn't mean it should be ignored. Didn't result in a great outcome last time.

The_Conductor

lawred2 wrote: »

Not a hope have wage increases kept pace with rent increases

Not a hope

Most people are on significantly less take home pay than they were 10 years ago- between the various government levies- and actual pay cuts.
A select few (mostly lower paid staff) may have had some increases- however, they're marginal in nature.

I imagine that there will be major increases in the next 24 months- the level of industrial unrest is reaching stratospheric proportions.

Bob24

whiskeyman wrote: »

But higher rents mean that many of those saving for mortgage deposits will now have to wait longer, so perhaps less full ready buyers able to come on the market.

Partly yes - but I think many people can gather a deposit if they really want to (there are always spendings which can be reduced and/or family money somewhere). I it could be a bad news for retail businesses though.

Villa05

draiochtanois wrote:

This post has been deleted.

Is income greater now than in 2008? For the vast majority I'd doubt it

Add In extra taxes and charges and your down a nice bit

I Am The Law

http://www.irishtimes.com/business/renting-in-dublin-now-costs-more-than-bubble-era-peak-1.2641358

Thank you Ex Minister Kelly, you must very proud?

Michael D Not Higgins

I Am The Law wrote: »

http://www.irishtimes.com/business/renting-in-dublin-now-costs-more-than-bubble-era-peak-1.2641358

Thank you Ex Minister Kelly, you must very proud?

His ministry only started in 2014, can you point at specifics in those two years that have caused this? I would attribute it to much larger dynamics, most overtly the lack of supply in the building sector which pre dates Alan Kelly even being in the Dail.

draiochtanois

This post has been deleted.

Bob24

I Am The Law wrote: »

http://www.irishtimes.com/business/renting-in-dublin-now-costs-more-than-bubble-era-peak-1.2641358

Thank you Ex Minister Kelly, you must very proud?

FYI - already posted and this is the article we were already discussing.

Michael D Not Higgins

draiochtanois wrote: »

This post has been deleted.

Look at the daft report. The rent has been climbing by 9-10% each year for the last 4 years. The legislation around the rent increases hasn't caused this. In fact there was some good measures in there like increasing the notice period of an increase so tenants could leave within the notice period (with the correct notice) without paying the higher rent.