Property Market 2017

Graham

Andrew Defeated Jell-o wrote: »

20% and can be taxed at source (agent). Banana republic

It's more complex than that. A blanket "it's 20%" is a fairly big oversimplification.

20% may or may not be the limit of any Irish tax liability, it depends.
there may also be a local tax liability in the country of residence for the landlord.

Cyrus

Graham wrote: »

It's more complex than that. A blanket "it's 20%" is a fairly big oversimplification.

20% may or may not be the limit of any Irish tax liability, it depends.
there may also be a local tax liability in the country of residence for the landlord.

Exactly

It could be a lot more than 20%

Bob24

Graham wrote: »

there may also be a local tax liability in the country of residence for the landlord.

Yes in most European countries it would be the case.

TiNcAn

It seems that there is a pretty strong consensus that as an investment decision alone it is not worth it. And it is important to highlight this point because it makes it harder to make a decision on the second point. Which is the decision is primarily based on that I will want to move back at some stage and having a place already will make that significantly easier. In the end circumstances will dictate how and when this will happen (e.g. job prospects, family, friends).

Saying that, it still makes sense to look at it from an investment point of view. So take this as an simple example of along the lines I am thinking:
(Ready to go) Property cost: 300000
Mortgage : 150000
Administrative costs: 7000
Expected rent: 1600 (low end)/ month
Lost tenancy: 1 month / year
Annual fees (insurance): 2300
Interest rate: 6.5% (high end, actually is 5%)
Tax (before any deductibles): 20% <-- need to look into this more based on previous posts
This would run at about a net yield of ~0%, but equity gain of ~6000/year. More favorable situations would bring this to 9000/year (net incl. equity  ). 

In the event that house prices continue to grow, which is one my main concerns, I am not ending up paying up more for a house when I come back and I already gone some way to paying off the mortgage. 
Conversely, if the market goes down I end up paying more than I would have if I waited, and most likely the rent would not cover the mortgage placing a burden on my 'earned' income (but manageable). Not to mention a landlord's nightmare that one bad tenant could throw this all out of whack.

So I guess it boils down to if I want to take the risk of being a landlord and the hassle that comes with it for 6-9k/year and the security in case house prices continue to rise.

Samuel T. Cogley

TiNcAn wrote: »

Tax (before any deductibles): 20% <-- need to look into this more based on previous posts

I can't see how tax would be 20% unless this is your only source on income. If so I'm not sure how you'd get a mortgage for 150K. Assuming you are getting a mortgage then I'm pretty sure you'd have to be ordinarily resident (at least) in Ireland. So expect more in the region of 45% tax and that included the deductibles, other than 80% of the mortgage interest.

Bob24

Argh the more I talk to people the more I hear practical examples of why government housing policies are misguided and not helping anyone.

Today a colleague and a friend told me 2 separate but pretty much identical stories: they both got a letter from their landlord handing notice to terminate their tenancy and both landlords mentioned they want to refurbish the property.

Both living in a decent apartment with no obvious need for refurbishment, and both would have agreed on a rent increase of more than 4% as even 10 or 20% would have kept their rent below market rate ... but since they are in a RPZ (both Dublin city centre) and have been renting for a few years, the only way for the landlord to legally increase the rent more than 4% is to kick out the current tenants do refurbishment work (or pretend to, I don't know how it is being checked). At the end of the day that rule which is supposed to protect tenants is going to force my friends to move out from a place they were happy with, go through the pain of finding a new one, and probably accept a higher rent increase than if they had been able to find a compromise with their current landlords (both had been in their place for several years and were good tenants so LLs would probably have settled for something slightly below market rate to avoid the risk of getting a bad new tenant). How's that for helping them?

And to be clear I am not blaming the landlords here ... they just want to increase the rent as the rental market is moving on, and follow the only legal option given to them by our genius politicians.

Bob24

TiNcAn wrote: »

It seems that there is a pretty strong consensus that as an investment decision alone it is not worth it. And it is important to highlight this point because it makes it harder to make a decision on the second point. Which is the decision is primarily based on that I will want to move back at some stage and having a place already will make that significantly easier. In the end circumstances will dictate how and when this will happen (e.g. job prospects, family, friends).

Saying that, it still makes sense to look at it from an investment point of view. So take this as an simple example of along the lines I am thinking:
(Ready to go) Property cost: 300000
Mortgage : 150000
Administrative costs: 7000
Expected rent: 1600 (low end)/ month
Lost tenancy: 1 month / year
Annual fees (insurance): 2300
Interest rate: 6.5% (high end, actually is 5%)
Tax (before any deductibles): 20% <-- need to look into this more based on previous posts
This would run at about a net yield of ~0%, but equity gain of ~6000/year. More favorable situations would bring this to 9000/year (net incl. equity  ). 

In the event that house prices continue to grow, which is one my main concerns, I am not ending up paying up more for a house when I come back and I already gone some way to paying off the mortgage. 
Conversely, if the market goes down I end up paying more than I would have if I waited, and most likely the rent would not cover the mortgage placing a burden on my 'earned' income (but manageable). Not to mention a landlord's nightmare that one bad tenant could throw this all out of whack.

So I guess it boils down to if I want to take the risk of being a landlord and the hassle that comes with it for 6-9k/year and the security in case house prices continue to rise.

I don't know the German tax system but I would be surprised if you didn't have tax liability there for your rental income in Ireland. Definitely double-check. Also it might be included in some of your items already but just in case as they are not explicitly listed: don't forget the LPT and management fees (if applicable).


Since you made conservative assumptions but assuming some of what I said above will have a negative impact on your calculations, as you found out essentially you will have a zero return.

So at the end of the day the question for you might be: do you want to "secure" an Irish property and make a bet on Irish property prices at the cost of becoming a remote landlord? (knowing that the bet is very likely but not guaranteed to be a winning one in the near future, but the outcome is much more unclear in the medium term - i.e. experience has told us that Irish properties are a fairly volatile asset which can both make you are lose you a lot of money if you have to sell them within a few years)

To me it depends on how badly you want a property and how sure you are you will come back and live in that property.

Samuel T. Cogley

Bob24 wrote: »

Argh the more I talk to people the more I hear practical examples of why government housing policies are misguided and not helping anyone.

Today a colleague and a friend told me 2 separate but pretty much identical stories: they both got a letter from their landlord handing notice to terminate their tenancy and both landlords mentioned they want to refurbish the property.

Both living in decent apartment with no obvious need for refurbishment, and both would have agreed on a rent increase of more than 4% as even 10 or 20% would have ket their rent below market rate ... but since they are in a RPZ (both Dublin city centre) and have been renting for a few years, the only way for the landlord to legally increase the rent more than 4% is to kick out the current tenants do refurbishment work (or pretend to, I don't know how it is being checked). At the end of the day that rule which is supposed to protect tenants is going to force my friends to move out from a place they were happy with, go through the pain of finding a new one, and probably accept a higher rent increase than if they had been able to find a compromise with their current landlords (both had been in their place for several years and were good tenants so LLs would have probably settled for something slightly below market rate to avoid the risk of getting a bad new tenant). How's that for helping them?

And to be clear I am not blaming the landlords there ... they just want to increase the rent as the rental market is moving on, and follow the only legal option given to them by our genius politicians.

And I see now that the lowest rated BER apartments/houses will be barred from being rented. So here we go again with the fecking bed-sit type debacle. We never learn.

jamesthepeach

Bob24 wrote: »

Argh the more I talk to people the more I hear practical examples of why government housing policies are misguided and not helping anyone.

Today a colleague and a friend told me 2 separate but pretty much identical stories: they both got a letter from their landlord handing notice to terminate their tenancy and both landlords mentioned they want to refurbish the property.

Both living in decent apartment with no obvious need for refurbishment, and both would have agreed on a rent increase of more than 4% as even 10 or 20% would have ket their rent below market rate ... but since they are in a RPZ (both Dublin city centre) and have been renting for a few years, the only way for the landlord to legally increase the rent more than 4% is to kick out the current tenants do refurbishment work (or pretend to, I don't know how it is being checked). At the end of the day that rule which is supposed to protect tenants is going to force my friends to move out from a place they were happy with, go through the pain of finding a new one, and probably accept a higher rent increase than if they had been able to find a compromise with their current landlords (both had been in their place for several years and were good tenants so LLs would have probably settled for something slightly below market rate to avoid the risk of getting a bad new tenant). How's that for helping them?

And to be clear I am not blaming the landlords there ... they just want to increase the rent as the rental market is moving on, and follow the only legal option given to them by our genius politicians.

So many cases of this.
The biggest problem is that they locked those charging below market rate into that discounted rate. If they allowed all.landlorda to bring their properties up to market rate then no-one would have a problem, apart from the huge consequences of getting bad luck and getting a bad tenant.

Bob24

Samuel T. Cogley wrote: »

And I see now that the lowest rated BER apartments/houses will be barred from being rented. So here we go again with the fecking bed-sit type debacle. We never learn.

I missed that. Which rating are wound talking about?

Samuel T. Cogley

Bob24 wrote: »

I missed that. Which rating are wound talking about?

I assume just G to start with, yesterdays sindo along with cutting motorway speeds to 110 :rolleyes:. All in the name of saving the planet. I suppose homeless people who take a long time to get anywhere cause less emissions.

jamesthepeach

Samuel T. Cogley wrote: »

I assume just G to start with, yesterdays sindo along with cutting motorway speeds to 110 :rolleyes:. All in the name of saving the planet. I suppose homeless people who take a long time to get anywhere cause less emissions.

Then it will be the landlords fault for not investing money into a property where he can't raise the rent enough to cover the costs.
No, not the government's fault at all.

draiochtanois

This post has been deleted.

Cuddlesworth

Anybody else getting a sense of desperation in the plus 400k market in South Dublin? Seeing lots of stock either not moving once the owners decide they are worth more then 400k or some serious price drops on higher priced property's over the last year.

Bob24

Cuddlesworth wrote: »

Anybody else getting a sense of desperation in the plus 400k market in South Dublin? Seeing lots of stock either not moving once the owners decide they are worth more then 400k or some serious price drops on higher priced property's over the last year.

Possibly a market of its own and I know I'm a bit crazy to look there, but I see nothing like that in the South Docklands. Biding wars still going full steam and prices increasing (nowadays 400k will get you OKish 2 bed apartment there, for a good you you are more looking at 450+ and in the best blocks you are talking in excess of 550k).

Vim Fuego

Cuddlesworth wrote: »

Anybody else getting a sense of desperation in the plus 400k market in South Dublin? Seeing lots of stock either not moving once the owners decide they are worth more then 400k or some serious price drops on higher priced property's over the last year.

I've seen a mix to be honest, and I've been viewing a lot in recent months. In Goatstown recently, 2 or 3 houses around the same area were only on the market a few weeks before going sale agreed - never even got a chance to go to the viewings but had been speaking to the estate agents.

I've seen others where bids were well above asking but still not sale agreed. Cabinteely seems to a mixed bag - some houses on the village side have bids above asking. On other side of the N11, there's some houses which are reasonably valued IMO but still need a lot of work that are putting people off.

Stillorgan seems to have plenty of stock coming on at the minute. I am definintely seeing some interesting pricing disparities, even from the same agent. For example, a detatched house with west facing garden has a similar asking price to a north-facing semi-d in a neighbouring estate.

In the city centre, who even knows? In my apartment building (near Rathmines area), a 2 bed apartment was listed at €395k and went for €500k!

I don't think the north side is immune from this either though - saw an ok detatched 4-bed in Raheny asking for €700k* which seems like huge money to me.

In short, I have no clue how to approach this whenever I am in a position to start bidding. I get the sense that a lot of vendors are willing to sit on a high asking price in the hope that the market eventually gets there. I think it comes down to how quickly they need to make a sale or not.


* Edit - I just looked it up and the house is sale agreed (after they increased the asking price by €10k in May). Now similar properties are looking for €795k.

py

Cuddlesworth wrote: »

Anybody else getting a sense of desperation in the plus 400k market in South Dublin? Seeing lots of stock either not moving once the owners decide they are worth more then 400k or some serious price drops on higher priced property's over the last year.

I did in Q1 and early Q2. Bids were going mad. However, there was a sharp drop off in interest in people attending viewings in late April and early May. We were lucky to go sale agreed but I think it's going to pick up if the FTB grant is abolished as it will put those FTB back looking at the second-hand market again.

frefrefre

Cuddlesworth wrote: »

Anybody else getting a sense of desperation in the plus 400k market in South Dublin? Seeing lots of stock either not moving once the owners decide they are worth more then 400k or some serious price drops on higher priced property's over the last year.

Seen quite the opposite to be honest. There's a real sense of panic out there and I think we are far closer to peak prices for 3 bed semi's in Dublin which will show in the next batch of official figures.
You'd think people can't afford the prices on offer or be able to raise the high deposits needed but i reckon the bank of mum and dad are helping here in a lot of cases, either through topping up deposits or people moving back home to save.

Cuddlesworth

frefrefre wrote: »

Seen quite the opposite to be honest. There's a real sense of panic out there and I think we are far closer to peak prices for 3 bed semi's in Dublin which will show in the next batch of official figures.
You'd think people can't afford the prices on offer or be able to raise the high deposits needed but i reckon the bank of mum and dad are helping here in a lot of cases, either through topping up deposits or people moving back home to save.

If I was going to lay out the different markets, at least where I am looking(Shankhill/Loughlistown)

I would mark it as
Low to mid in terms of locations.
3-4+ beds
Needs work or doesn't(structural, not just some painting and new floors).

Low end locations, ex council or just ****ty estate, seeing no real movement unless priced appropriately.

Medium location(estates with a mix of 3/4 beds semis) are seeing huge movement up to 400k, which is pretty much 3 beds at this point.

Past 400k, which is around 4 bed territory, is dying. Houses are up for a good while, with a fair few coming up at stupid prices and then slowly marching down to around 450. And then they just sit there. Low enough to get viewings but mostly not selling unless they need no work done. Estate agents biting the hand off you.

Closer towards the city are areas I can't be arsed with. The houses are usually just plain bigger, larger floor space, bigger gardens etc. I just can't justify 550k+ for a 3 bed.

Samuel T. Cogley

No movement of a number of 3 bed terraces in Kilbarrack. Various sizes (under 100m2) all priced around 275K.

Sanity returning to Dublin perhaps?

One is gone off myhome actually - not sure if sold or withdrawn. It was overlooking a field so probably sold. Still on Daft - 4 bed 95sqm.

mloc123

Samuel T. Cogley wrote: »

No movement of a number of 3 bed terraces in Kilbarrack. Various sizes (under 100m2) all priced around 275K.

Sanity returning to Dublin perhaps?

One is gone off myhome actually - not sure if sold or withdrawn. It was overlooking a field so probably sold. Still on Daft - 4 bed 95sqm.

Define no movement, how long are they listed? I phoned up about a couple of 3 bed semis our our direction (gauging prices) as they were listed a couple of months... They had bidders on each.

Hollister11

Samuel T. Cogley wrote: »

No movement of a number of 3 bed terraces in Kilbarrack. Various sizes (under 100m2) all priced around 275K.

Sanity returning to Dublin perhaps?

One is gone off myhome actually - not sure if sold or withdrawn. It was overlooking a field so probably sold. Still on Daft - 4 bed 95sqm.

What would the rent been on these?

1400 P/M?

frefrefre

Samuel T. Cogley wrote: »

No movement of a number of 3 bed terraces in Kilbarrack. Various sizes (under 100m2) all priced around 275K.

Sanity returning to Dublin perhaps?

One is gone off myhome actually - not sure if sold or withdrawn. It was overlooking a field so probably sold. Still on Daft - 4 bed 95sqm.

Not bad prices for somewhere coastal, I worked in Coolock for a few years recently and didn't hear much bad about Kilbarrack. Think it had a bad reputation in the 90's though? Surprised they haven't sold.

frefrefre

Cuddlesworth wrote: »

frefrefre wrote: »

Seen quite the opposite to be honest. There's a real sense of panic out there and I think we are far closer to peak prices for 3 bed semi's in Dublin which will show in the next batch of official figures.
You'd think people can't afford the prices on offer or be able to raise the high deposits needed but i reckon the bank of mum and dad are helping here in a lot of cases, either through topping up deposits or people moving back home to save.

If I was going to lay out the different markets, at least where I am looking(Shankhill/Loughlistown)

I would mark it as
Low to mid in terms of locations.
3-4+ beds
Needs work or doesn't(structural, not just some painting and new floors).

Low end locations, ex council or just ****ty estate, seeing no real movement unless priced appropriately.

Medium location(estates with a mix of 3/4 beds semis) are seeing huge movement up to 400k, which is pretty much 3 beds at this point.

Past 400k, which is around 4 bed territory, is dying. Houses are up for a good while, with a fair few coming up at stupid prices and then slowly marching down to around 450. And then they just sit there. Low enough to get viewings but mostly not selling unless they need no work done. Estate agents biting the hand off you.

Closer towards the city are areas I can't be arsed with. The houses are usually just plain bigger, larger floor space, bigger gardens etc. I just can't justify 550k+ for a 3 bed.

Interestingly, Shankill has much better value than Stepaside or Carrickmines, i suppose the Luas line makes a big difference but anecdotally, Stepaside has had some huge prices for 3 beds that we'll see on the CSO.
Bray is very frothy too, I expect to see price drops there too as some of the agents/owners are taking the mick!

Samuel T. Cogley

One is north-west facing and backs out onto the DART line (and possibly station); nice kitchen and maximized for space downstairs, they're all a bit on the small side, even the 4 bed is under 100sqm. Rent would be closer to about 1400 I reckon on a smaller 3 bed but reputation of the area (no longer justified really) would play into, and reduce, that. If you allowed pets I reckon you'd be quids in.

One I know has not offers, other not sure, and the other has disappeared from myhome but is still on DAFT. There is also a duplex that'd been there forever and the swan nest one I'd say is in Raheny tbh. Either way I'd be surprised if it's D13 as listed and not D5. So I can only actually properly define one as not moving :pac: the others just seem to to have done much!

Hollister11

Samuel T. Cogley wrote: »

One is north-west facing and backs out onto the DART line (and possibly station); nice kitchen and maximized for space downstairs, they're all a bit on the small side, even the 4 bed is under 100sqm. Rent would be closer to about 1400 I reckon on a smaller 3 bed but reputation of the area (no longer justified really) would play into, and reduce, that. If you allowed pets I reckon you'd be quids in.

One I know has not offers, other not sure, and the other has disappeared from myhome but is still on DAFT. There is also a duplex that'd been there forever and the swan nest one I'd say is in Raheny tbh. Either way I'd be surprised if it's D13 as listed and not D5. So I can only actually properly define one as not moving :pac: the others just seem to to have done much!

6% gross yield. Pretty decent tbh. Being near a DART line is a big plus for many people tbh.

Samuel T. Cogley

Hollister11 wrote: »

6% gross yield. Pretty decent tbh. Being near a DART line is a big plus for many people tbh.

Such a thing as too near though! :pac:

If I'm right on the rent though (which I may very well be wrong) you could get a D8 apartment under 200K and get the same rent so not an idea investment. I've a one bed with excellent tenants you might be interested in!

For your investing pleasure.

LirW

Samuel, is it time for you to flip your 1bed now? :P

Samuel T. Cogley

LirW wrote: »

Samuel, is it time for you to flip your 1bed now? :P

Well, if we've got a slow down happening... TBH with the cap gain exemption coming period coming to an end people will start selling. I reckon I'm in the racket for a few more years until the next boom. I think we're in for a serious slowdown in 2017*/2018 and a year of stagnation (at best).

*Q4 onwards

Hollister11

Samuel T. Cogley wrote: »

Such a thing as too near though! :pac:

If I'm right on the rent though (which I may very well be wrong) you could get a D8 apartment under 200K and get the same rent so not an idea investment. I've a one bed with excellent tenants you might be interested in!

For your investing pleasure.

Haha, I need to finish college first 😂

I only follow the market to look for houses as my parents want to move, and to get an idea on the market for myself for the future,