Property Market 2017

ligerdub

The government has done all it can for the investor in property rather than anyone who might live in one!

Graham

ligerdub wrote: »

The government has done all it can for the investor in property rather than anyone who might live in one!

That must be why there's sufficient supply of rental properties to satisfy the current demand and rents are dropping.

ligerdub

Graham wrote: »

That must be why there's sufficient supply of rental properties to satisfy the current demand and rents are dropping.

I'm not sure how you've worked that one out. Stock for let, and purchase was at a near all-time low last time I checked, and that wasn't that long ago.

Graham

ligerdub wrote: »

I'm not sure how you've worked that one out. Stock for let, and purchase was at a near all-time low last time I checked, and that wasn't that long ago.

and stock is largely moving out of the rental (investment) market.

Samuel T. Cogley

LirW wrote: »

Good friends of mine bought 2015, after getting gazumped they went in with 20k over the asking straight away with the condition of going sale agreed straight away. Worked out for them. Back then it was the most expensive selling price in the area, which now wouldnt get you anything there.

2015 I did something similar, went in high to scare off the two other bidders. I had to 'gazunder' slightly because of an issue that arose but the vendors couldn;t have been too pissed off as they very nicely left us money to fix the an issue that had cropped up the days before we moved in. I ended up paying around 270K for a asking of 260K in a market that probably wouldn't have looked to go over asking. Based on current figures it's probably worth about 325K now and growing strongly BUT...

... who cares! And I don't mean to try and stymie the discussion just that I don't really care if the place is worth 100K for 400K I got the house I wanted at a rate I could afford and I'm not going anywhere in the medium term so I'll worry about it then, probably after the next 2-3 crashes and alot of inflation.

Cuddlesworth

Samuel T. Cogley wrote: »

... who cares! And I don't mean to try and stymie the discussion just that I don't really care if the place is worth 100K for 400K I got the house I wanted at a rate I could afford and I'm not going anywhere in the medium term so I'll worry about it then, probably after the next 2-3 crashes and alot of inflation.

It pretty much boils down to the fact we can't afford another property crash, our market is still in ****e since the last one. And inflated fast rising prices lead to a drastic crash.

The_Conductor

ligerdub wrote: »

The government has done all it can for the investor in property rather than anyone who might live in one!

The government taxes investors, other than charities and REITs, in the most onerous of manners. The system is setup to load debt on property- and punish any investors or landlords who pay down debt. Its most bizarre. It 100% is not the case that the government is doing anything (at all) for investors- which is why the absolute number of investors running to the door is causing such consternation (and why the shortage in the rental market is worsening- not getting better).

Bob24

The_Conductor wrote: »

The government taxes investors, other than charities and REITs, in the most onerous of manners. The system is setup to load debt on property- and punish any investors or landlords who pay down debt. Its most bizarre. It 100% is not the case that the government is doing anything (at all) for investors- which is why the absolute number of investors running to the door is causing such consternation (and why the shortage in the rental market is worsening- not getting better).

To make it clear maybe replace "investors" by "individual landlords".

Fully agree with what you said but governement policies do favour property price speculators, banks, and developers ... which can all to some extend be considered as investors in the property market (on top of REITs which as you mentioned are treated differently for individual landlord).

rsynnott

Samuel T. Cogley wrote: »

2015 I did something similar, went in high to scare off the two other bidders. I had to 'gazunder' slightly because of an issue that arose but the vendors couldn;t have been too pissed off as they very nicely left us money to fix the an issue that had cropped up the days before we moved in. I ended up paying around 270K for a asking of 260K in a market that probably wouldn't have looked to go over asking. Based on current figures it's probably worth about 325K now and growing strongly BUT...

... who cares! And I don't mean to try and stymie the discussion just that I don't really care if the place is worth 100K for 400K I got the house I wanted at a rate I could afford and I'm not going anywhere in the medium term so I'll worry about it then, probably after the next 2-3 crashes and alot of inflation.

The odd thing is, people often seem to be happy that their house prices are going up, but really, for the homeowner it's rarely a good thing. If they want to move to a more expensive house, increasing prices tends to increase the gap to be bridged, and once property tax gets revalued increasing prices will hurt there too. The only circumstance I can think of where high house prices are actually good for homeowners is where they want to downsize, or where they're in negative equity.

Rising house prices are good for developers and property speculators, but almost nobody else.

Browney7

rsynnott wrote: »

Rising house prices are good for developers and property speculators, but almost nobody else.

They're great for dead people aswell only it's too late for them at that stage

The_Conductor

Browney7 wrote: »

They're great for dead people aswell only it's too late for them at that stage

Not really- the reason we have so many stately manners in State hands- is because families got hit with substantial inheritance tax that forced the disposal of the properties. One extreme example would be Johnstown Castle in Wexford- which was hit with inheritance tax 3 times in quick succession- to the extent that family just handed it over. Intelligent people they were- they kept the fishing rights!

Ray Palmer

rsynnott wrote: »

The odd thing is, people often seem to be happy that their house prices are going up, but really, for the homeowner it's rarely a good thing. If they want to move to a more expensive house, increasing prices tends to increase the gap to be bridged, and once property tax gets revalued increasing prices will hurt there too. The only circumstance I can think of where high house prices are actually good for homeowners is where they want to downsize, or where they're in negative equity.

Rising house prices are good for developers and property speculators, but almost nobody else.

Actually that is part of the property game. If you buy close to a desirable area the rising prices will keep you inline and can jump up to match the neighbouring area.
Local knowledge of areas can be really good. I saw I €40k difference on one road based on an intersection and bought on the bad side. A year later the prices on the street were the same and the remain the same now.

rsynnott

Ray Palmer wrote: »

Actually that is part of the property game. If you buy close to a desirable area the rising prices will keep you inline and can jump up to match the neighbouring area.
Local knowledge of areas can be really good. I saw I €40k difference on one road based on an intersection and bought on the bad side. A year later the prices on the street were the same and the remain the same now.

Sure, but what good does it do you? If you'd bought it, in 2019 you'd have the privilege of paying slightly more property tax.

OwlsZat

The prices are up 10% year on year and now stand 29% off average prices at the time of the last crash.

Brexit might hurt rural farming incomes but the greater Dublin area is less likely to see the same negative impact. In fact, it's possible that it will attract some more high paid banking jobs driving further competition for property.

Globally China and Canada are peering over the edge of credit cliff. However, even if they crash would the impact really be seen in Dublin property? Perhaps some apartments bought for let would come on stream.

If something is to cause another Irish property crash is it more likely to be an end to the free money that's been available for the last years. Wages have been fairly stagnant so if people have over stretched themselves, which they have and interest rates increase there could be world of pain felt.

Germany primarily controls interest rates and cheap money aids their export driven economy. Further to that we also paying them back colossal interest payments from their "generous" bailout package, an Irish recession doesn't seem to help them.

While I can see people paying over the odds due to the under supply. Measures so badly needed to boost supply, build upwards, fill vacant and reduce building cost. As I'm not sure I can see the driver of the next crash. Going to take a stab at 4/5 years as a result.

gaius c

The_Conductor wrote: »

The government taxes investors, other than charities and REITs, in the most onerous of manners. The system is setup to load debt on property- and punish any investors or landlords who pay down debt. Its most bizarre. It 100% is not the case that the government is doing anything (at all) for investors- which is why the absolute number of investors running to the door is causing such consternation (and why the shortage in the rental market is worsening- not getting better).

If that were really true, there'd be a glut of properties for sale. There's not.

Samuel T. Cogley

gaius c wrote: »

If that were really true, there'd be a glut of properties for sale. There's not.

Give the cap gains exemption a chance. As for investors running for the door, I think someone else said we'd be better off describing that as 'individual LL's'* who are indeed IMHO. I need about 20K more (1 or 2 more 10% rises) and I'm gone! I don't think I'll get them though because of the cap gains exemption properties coming on to the market.

*Not meaning to try and speak for The_Conductor of course.

Bob24

Yes there are more And more institutional landlord who have different tax obligations, or also in attractive locations the rate of landlords turning to Airbnb or similar is increasing a lot and becoming a problem.

Having said that, I am currently trying to buy an appartement mostly looking in a very high demand area of Dublin (as a FTB myself), and still see a lot of prospective individual landlords at the viewings.

jamesthepeach

Samuel T. Cogley wrote: »

Give the cap gains exemption a chance. As for investors running for the door, I think someone else said we'd be better off describing that as 'individual LL's'* who are indeed IMHO. I need about 20K more (1 or 2 more 10% rises) and I'm gone! I don't think I'll get them though because of the cap gains exemption properties coming on to the market.

*Not meaning to try and speak for The_Conductor of course.

I went short term on one and sold the other.
Was going to sell the second one too but it makes good money short term so I'll leave it for a while.

OwlsZat

Bob24 wrote: »

Yes there are more And more institutional landlord who have different tax obligations, or also in attractive locations the rate of landlords turning to Airbnb or similar is increasing a lot and becoming a problem.

My landlord told us he's selling our apt (3 bed apt sold in last 6 months for 400, and 425k) because his accountant told him too. Reckons he's getting 700k from some lads who are going to Airbnb it. When will the revenue end the tax free rent scam. Either way he's surely still well wide of the mark.

Graham

OwlsZat wrote: »

My landlord told us he's selling our apt (3 bed apt sold in last 6 months for 400, and 425k) because his accountant told him too. Reckons he's getting 700k from some lads who are going to Airbnb it. When will the revenue end the tax free rent scam. Either way he's surely still well wide of the mark.

What scam?

OwlsZat

Graham wrote: »

OwlsZat wrote: »

My landlord told us he's selling our apt (3 bed apt sold in last 6 months for 400, and 425k) because his accountant told him too. Reckons he's getting 700k from some lads who are going to Airbnb it. When will the revenue end the tax free rent scam. Either way he's surely still well wide of the mark.

What scam?

Expecting people to declare their own Airbnb profits. I'd love to see how many are actually tax compliant.

jamesthepeach

OwlsZat wrote: »

Expecting people to declare their own Airbnb profits. I'd love to see how many are actually tax compliant.

Airbnb give all the info to revenue already.

OwlsZat

Assuming 100% occupancy and having no letting related expenses at all, at 700k it would offer a 3.7% yield. Surely that is not viable.
Has the revenue got some information and aren't acting, or are they actively chasing unpaid Airbnb taxes. Something doesn't add up, but it could be the sale price too

dubrov

they sound like clever investors that are willing to buy a property for 700k that sold for 425k 6 months earlier

The_Conductor

OwlsZat wrote: »

My landlord told us he's selling our apt (3 bed apt sold in last 6 months for 400, and 425k) because his accountant told him too. Reckons he's getting 700k from some lads who are going to Airbnb it. When will the revenue end the tax free rent scam. Either way he's surely still well wide of the mark.

If neighbouring apartments solf for 400 and 425 in the last 6 months- the guy is delusional if he imagines someone is going to magically hand him 700k- it ain't going to happen. Aside from anything else- no-one would lend the money for this. In addition- Airbnb and Booking.com now share details of *all* rentals on their websites with Revenue- and it is classed by Revenue as unearned income (i.e. fully taxable).

Your landlord has been taking a few too many happy pills.

The_Conductor

OwlsZat wrote: »

Assuming 100% occupancy and having no letting related expenses at all, at 700k it would offer a 3.7% yield. Surely that is not viable.
Has the revenue got some information and aren't acting, or are they actively chasing unpaid Airbnb taxes. Something doesn't add up, but it could be the sale price too

Min of 8% yield, and preferably 8-12% given the risks involved in the sector (and the fact that its all treated as 'unearned income'. It doesn't add up- unless they're mafia or something trying to use this as a method to launder cash- because they sure as hell will burn it up this way........

Also- they'll be paying cash for this- because no lender will lend on the terms indicated- ain't going to happen.

TiNcAn

This seems like no better place than other on the internet to ask for advice about the decision I am faced with. So here goes.

I am living abroad for the last 5 years and I am in the position that I can afford a house in Dublin with a buy-to-let mortgage. My intention would be a some point in the medium term to come back to Ireland (although I can't say when) so I would like to have a place to come back to. So the idea would be to rent the house for a few years until I return. Over the past 4 months I have been doing my own research and reading into what is involved in being and landlord and have been trawling many forms for quite a while now.

So I think I have a fair idea what to expect on the financial side of things, but realize there is a lot more to it than that. And the only way to really know is to do it myself, and know that it could a quite a handful to say the least.

So I here I am wondering if this makes sense. Based on my figures the house would pay for itself even when I take some pretty conservative assumptions (e.g. interest rates, lost rate), but not much past that in the worst case. The upside is that I would be on the property ladder, peace of mind that I have a place to go back to.

What you would do if you were in my situation?

LirW

Just don't. You're abroad, you're paying a mortgage and if you have a bad tenant, they can f you over big big time, while you're not in a position of doimg anything from where you are. Also the taxes, you hand half of the income to the tax man.
Would be way too risky for me, just keep your savings and buy when you come back.

py

TiNcAn wrote: »

This seems like no better place than other on the internet to ask for advice about the decision I am faced with. So here goes.

I am living abroad for the last 5 years and I am in the position that I can afford a house in Dublin with a buy-to-let mortgage. My intention would be a some point in the medium term to come back to Ireland (although I can't say when) so I would like to have a place to come back to. So the idea would be to rent the house for a few years until I return. Over the past 4 months I have been doing my own research and reading into what is involved in being and landlord and have been trawling many forms for quite a while now.

So I think I have a fair idea what to expect on the financial side of things, but realize there is a lot more to it than that. And the only way to really know is to do it myself, and know that it could a quite a handful to say the least.

So I here I am wondering if this makes sense. Based on my figures the house would pay for itself even when I take some pretty conservative assumptions (e.g. interest rates, lost rate), but not much past that in the worst case. The upside is that I would be on the property ladder, peace of mind that I have a place to go back to.

What you would do if you were in my situation?

You should speak with an accountant or tax specialist as you haven't mentioned anything about tax in your post. Unfortunately, it's not as simple as the rental income covering the mortgage when it comes to taxation.

myshirt

If you have the money there are better asset classes to give you more bang for your buck, but if you want property put it into a fund, let it be professionally managed.

Note that as you describe the scenario, the rent will be paid to you less a deduction going straight to taxman, and you then settle up with the taxman at the end of the year. It's a cashflow disadvantage, but hey.