How high will the rental rates go ?

Lumen

Stella Clever Strapless wrote: »

The money you put into your pension is not an expense anymore than the money you pay into your savings account is an expense.

But to pick a random example the money you would have to pay in property tax if the rent isn't covering it is an expense out of your pocket that you will not see back again.

Correct. But capital repayments are not an expense, because you do see the money again.

athtrasna

Mod note

Can we get back on topic please

_Jamie_

Baby01032012 wrote: »

On the other side I'm not sure why you think landlords should not make a profit on their investment - income less expenses equals profit! Cash flow or yield you could also call it. And have higher taxable income as capital and 25% of interest is not allowable. Which is why it hasn't been worthwhile for landlords to stay in the business which in turn has led to reduced supply.

Well it's not that landlords shouldn't make a profit, it's that it's not always possible for them to. If income less expenses is greater than market rent, they won't and might not even break even. Even with a lower tax rate or more allowable expenses, profits are not always guaranteed. In a landlord's market such as currently, profit is possible but it won't always be like this.

listermint

This isn't going to stop unless the government start building houses.

That's the long and short all this tinkering around is messing with everything.

Supply is the problem supply is what will keep business from setting up here.

Supply supply supply. It will start and probably is starting to hit other parts of the economy. The cost of housing yourself or family takes real money out of the economy is a zero sum game

athtrasna

listermint wrote: »

This isn't going to stop unless the government start building houses.

That's the long and short all this tinkering around is messing with everything.

Supply is the problem supply is what will keep business from setting up here.

Supply supply supply. It will start and probably is starting to hit other parts of the economy. The cost of housing yourself or family takes real money out of the economy is a zero sum game

The topic at hand is how high rents will go. Please keep your posts on topic.

Mod

riclad

demand is high , supply is low, rents will continue to rise,People will need to live somewhere ,its more expensive for landlords to fit out a building.
The days of dividing a house into 5 or 6 units is gone .taxs on landlords are high. <mod snip: you've been asked to stay on topic>

4ensic15

Rents will probably go up by another 25% according to Lecturer in housing at DIT, Lorcan Sirr.
Seems that it might only take a year to 18 months for this to happen. The average rent will rise dramatically when the 2 year freeze ends.

retalivity

In dublin 8 since feb 2015. Moving in 2 wks to a new apt we bought. Our current place is currently up on daft for €400 more pm than what we are paying - a 28.5% increase in less than 2 yrs. 3 ppl have agreed to take it already, only 1 has actually been here for a viewing.

Mad.

Eric Cartman

The rental rates are being pushed up by the US multinationals paying rent for staff. They are used to $3000 a month 1 bed's in downtown san fran. With no local expert before all this race to the top began, they didn't realise that Dublin rents weren't a bargain.

When Google, Facebook etc… turn round and say 'wait, we're not paying that high a rent' then it'll peak out.

punisher5112

Sure with higher rates the government gets huge increases in tax.

Anything they do just adds more money for us normal people to pay.

4ensic15

punisher5112 wrote: »

Sure with higher rates the government gets huge increases in tax.

Anything they do just adds more money for us normal people to pay.

If there were more rental units the price would fall but there would be the same revenue stream, just coming from more units. The Government intervened in the rental market from the early 1980s with section 23 incentives. These type of incentives continued until a few years ago. Rents were very high before the 1980s. Now that there are no incentives rents are returning to their normal high state. Making things worse is the elimination of many period flats through conversion and regulation. I would agree with Lorcan Sirr that there is at least 25% to go.

ongarboy

It's getting crazy. When I see what rents are being advertised for identical properties to mine, they are more than twice what I'm paying each month on my 185K mortgage. It's when you see situations like this, that the old "rent is dead money" saying appears to ring true....

Idbatterim

an absolute joke that this is a conscious government choice, sort out our antiquated planning "system". Way higher densities and cheaper to construct units. For the most part, it really is, THAT BLOODY SIMPLE!

Eric Cartman

the real solution to this whole problem does not involve throwing more money at it.

Rent allowance, HAP, whatever should not be increased. No breaking of the CB rules and no topups or more deals to give FTB's .

We should be working on encouraging builders and landlords to lower costs with tax breaks etc.. theres a finite amount of cash buyers out there , if we break now, the prices just spiral more.

punisher5112

Council housing should be just that council.

Its actually nuts seeing all these ex council houses being sold for huge money when bought off the council for buttons also a lot with huge side gardens with extra houses getting built on.

More council properties need building and kept.

Browney7

4ensic15 wrote: »

If there were more rental units the price would fall but there would be the same revenue stream, just coming from more units. The Government intervened in the rental market from the early 1980s with section 23 incentives. These type of incentives continued until a few years ago. Rents were very high before the 1980s. Now that there are no incentives rents are returning to their normal high state. Making things worse is the elimination of many period flats through conversion and regulation. I would agree with Lorcan Sirr that there is at least 25% to go.

I'd wonder if Aer Lingus or IAG went bust in the market and it was guaranteed that Ryanair would be the only operator out of Dublin for the next 18 months, would the government tell SME's, Google, Facebook etc to suck it up and pay what Ryanair want? Renting a house is not the same as buying a new telly or gadget whereby if it's too expensive you just don't buy it. The roof over your head comes first.

The new year will tell a lot where these rents will go. I'd venture 2 bed apartments for €1500 in Dublin currently will go to at least €1800 in the new year once people's rent guarantee is gone so you'd be looking at 20%.

4ensic15

Browney7 wrote: »

I'd wonder if Aer Lingus or IAG went bust in the market and it was guaranteed that Ryanair would be the only operator out of Dublin for the next 18 months, would the government tell SME's, Google, Facebook etc to suck it up and pay what Ryanair want?

I don't know what the relevance of this is. Before Ryanair there was only Aer Lingus and the Dublin London route was the most expensive air flight in the world.
What did any government do about it? A lot less than they ever did about housing.
the average rent never reflects the amount a person would be asked to pay for new accommodation. When the market is falling the amount being paid may well be less than can be negotiated for a new letting. When the market is rising, the opposite will be the case. Many people are below market rents because of the 2 year rule. As it comes to an end and rents are reviewed the average rent paid will rise but this will not influence the market rent.

gctest50

punisher5112 wrote: »

........

More council properties need building and kept.

Where are they going to build them ?


This and a few more will jack them up a bit :

Citi bank preparing to move 900 staff to Dublin from London

http://www.reuters.com/article/us-britain-eu-citi-idUSKBN1380GY

Browney7

4ensic15 wrote: »

I don't know what the relevance of this is. Before Ryanair there was only Aer Lingus and the Dublin London route was the most expensive air flight in the world.
What did any government do about it? A lot less than they ever did about housing.
the average rent never reflects the amount a person would be asked to pay for new accommodation. When the market is falling the amount being paid may well be less than can be negotiated for a new letting. When the market is rising, the opposite will be the case. Many people are below market rents because of the 2 year rule. As it comes to an end and rents are reviewed the average rent paid will rise but this will not influence the market rent.

The point being that transport on and off the island is of systemic and strategic importance to the country as is the roof over someones head. They wouldn't let an operator on such a piece of infrastructure gouge away to their hearts content.

Such is the shortage, most landlords will up existing tenants to just under the market rent for new lettings (I'd estimate 50 quid under as the tenant is most likely to not have caused problems). If tenant doesn't like it, landlord will advertise for market rent and will no doubt get it as twenty people will show up for the viewing and have a money fight.

I'd venture a lot of people are nervously awaiting their 2 year review in the new year

snickerpuss

ongarboy wrote: »

It's getting crazy. When I see what rents are being advertised for identical properties to mine, they are more than twice what I'm paying each month on my 185K mortgage. It's when you see situations like this, that the old "rent is dead money" saying appears to ring true....

Except now people can't even get mortgages cos they're looking at trying to save €50,000 - 60,000 for a deposit while paying those rents. It's frightening.

listermint

gctest50 wrote: »

Where are they going to build them ?


This and a few more will jack them up a bit :

There's land west and north of the city. It's now time for cpo's.

That or use the land NAMA were hoarding up for firesales.

gctest50

listermint wrote: »

There's land west and north of the city. It's now time for cpo's.

That or use the land NAMA were hoarding up for firesales.

Why would you do that when you could attract more like the 900 staff from Citi bank ?

beauf

Browney7 wrote: »

....The point being that transport on and off the island is of systemic and strategic importance to the country as is the roof over someones head. They wouldn't let an operator on such a piece of infrastructure gouge away to their hearts content.
...

They did though.

They through the local authority stopped building social housing. And a time when there's a housing crsis nama are the possibly the biggest landlord and owner in the state.

Until supply improves demand is not going to change.

TheDoc

Deleted User wrote: »

I've just paid my rental income tax on an apartment in Dublin 15.
Bought in 2004 as a home so a 92% mortgage, final phase ended up being 50% higher in cost so i'm nowhere near the highest mortgage and I make a small loss when the interest, property tax, insurance, repairs, maintenance and management fees are added up.

Of course in tax terms I made a profit, if the market doesn't collapse before spring of next year I'll sell and walk away with nothing. Not complaining, did a stupid thing buying somewhere to live, but many landlords are making nothing out of this, the government are getting income and property tax though.

A common misconception or thing I see raised alot is the 1-2 property landlord asking what the government are doing for them.

If you are a one property landlord, you are there by accident or circumstance. It's really a place you shouldn't be. You are properly there out of circumstance, or got talked into buying property during the boom and fair enough, its a pension asset or something for the kids.

"Proper" landlords if we use that term, are organisation or individuals who own or run dozens and dozens of properties. They very much make profit.

So yes you are right, the accidental/circumstance landlords arn't making anything, but then if they went into it with expectations of profit, that was their own fault. I don't see why that is the governments fault?

Graham

TheDoc wrote: »

If you are a one property landlord, you are there by accident or circumstance.

That's a fairly whopping assumption on your part.

beauf

They are not asking what the government are doing for them. But explaining why landlords (and themselves) are leaving the market as soon as they can. Since it the lack of rental properties, which is causing an issue for the rental market.

People are assuming larger LL purely focused on profit will better for renters than the smaller LL's. That seems a little illogical. As their only interest will be in maximising the profit from rental.

Baby01032012

I'll give me own experience with one rental property I have. 4 years ago it was rented out at €1100 pm, 3 years ago new tenants moved in paying €1800 pm, good tenants so only increased the rent recently to €2150 pm. Saw a property 2 doors away on daft last week asking €2700 pm. While I didn't increase rent to full market rate I didn't think €2700 was market rate. The rate of increase in rental market rates has been phenomenal.

quadrifoglio verde

Baby01032012 wrote: »

I'll give me own experience with one rental property I have. 4 years ago it was rented out at €1100 pm, 3 years ago new tenants moved in paying €1800 pm, good tenants so only increased the rent recently to €2150 pm. Saw a property 2 doors away on daft last week asking €2700 pm. While I didn't increase rent to full market rate I didn't think €2700 was market rate. The rate of increase in rental market rates has been phenomenal.

If 2700 is what a similar property is achieving then that is the market rate, i.e what tenant's, being the market are willing to pay
If it rents for above 2700, that will be the new market rate for your property and likewise if it rents below it.

4ensic15

Browney7 wrote: »

The point being that transport on and off the island is of systemic and strategic importance to the country as is the roof over someones head. They wouldn't let an operator on such a piece of infrastructure gouge away to their hearts content.

They did, when Aer Lingus was the sole operator. Most Irish people had to travel over and back to Britain by boat because the flights were so expensive!

athtrasna

4ensic15 wrote: »

They did, when Aer Lingus was the sole operator. Most Irish people had to travel over and back to Britain by boat because the flights were so expensive!

Mod note

Can we move away from the very tenuous analogies please and discuss the topic at hand. Thanks