Property Market 2020

hometruths

Hubertj wrote: »

So there isn’t a shortage of housing? I thought the CSO reports stated there was and that x supply annually was required to keep up with the number of new household formations? If there isn’t a shortage in Dublin why are there so few properties to let all the time?

As far as I can see there is no shortage of built housing stock.

That is different to saying there is no shortage of short term available housing supply on the sales and rental market.

But simply trying to solve the short term supply problem by adding to the existing stock is bananas. It is expensive, involves long lead times, and will ultimately only lead to over supply in the long term.

Hubertj

schmittel wrote: »

As far as I can see there is no shortage of built housing stock.

That is different to saying there is no shortage of short term available housing supply on the sales and rental market.

But simply trying to solve the short term supply problem by adding to the existing stock is bananas. It is expensive, involves long lead times, and will ultimately only lead to over supply in the long term.

Interesting opinion. Haven’t seen it written anywhere by economists, socialists and other “experts”.

How would you propose to make more efficient use of the current stock? Are you referring to both social and private units?

enricoh

Is there really a shortage of housing stock? Or is it just for social housing? I reckon so.
Saw an article last year that 20% of new builds in estates were unsold after 6 months. I was surprised at the figure tbh.
Social housing rates are so attractive in Ireland we will never fix the issue. A landlord I know, who I reckon would have 100 houses/apartments told me 75% of his tenants are on hap! Utterly unsustainable.

enricoh

Is there really a shortage of housing stock? Or is it just for social housing? I reckon so.
Saw an article last year that 20% of new builds in estates were unsold after 6 months. I was surprised at the figure tbh.
Social housing rates are so attractive in Ireland we will never fix the issue. A landlord I know, who I reckon would have 100 houses/apartments told me 75% of his tenants are on hap! Utterly unsustainable.

hometruths

Hubertj wrote: »

Interesting opinion. Haven’t seen it written anywhere by economists, socialists and other “experts”.

How would you propose to make more efficient use of the current stock? Are you referring to both social and private units?

It would take hours to go through the detail of all the things I'd propose, but in short I think the government needs to radically change direction and basically do the opposite of everything they are doing currently.

Rental market - apart from identifying RPZ's which I think have a value, but only by acknowledging that some locations are higher value than others - remove all market interfering legislation like rent freezes/caps and RTB disputes which take 18 months to resolve. Let the market set the rent and protect tenants rights by creating increased supply, make it a renters market. Do this by incentivising landlords into the market rather than driving them out - allowing more taxable expenses, tax breaks for long term leases, tax breaks for bringing new rental properties to market etc.

The current situation results in too many empty properties, as property owners are incentivised to leave them vacant.

Hammer Airbnb properties - the legislation is there. Enforce it ruthlessly.

They also need to enforce and encourage a giant game of musical chairs. Two ways to do this:

Enforce it by:
Repossess ruthlessly - there are vacant BTL properties in mortgage arrears. It is insane. Repo PDHs ruthlessly as well. Start with the biggest problem cases and rapidly work through the list. If the family is of low means and the property in question cannot be used more efficiently for another family, keep them in situ and convert it to social housing.

Encourage it by:
Incentives for property owners to downsize/downgrade - low cost bridging finance to allow people living in houses that are too big for them to downsize to smaller, less valuable properties.
Apply tax incentives to for people to downgrade in terms of location - i.e are you living in an RPZ but don't need to be? Have a tax break and bridging finance to move outside the RPZ.

Essentially the problem is one of occupation/size/location - i.e apart from too many empties there are too many people who are currently living in a house that is too big for their budget/needs or too premium a location for their budget/needs.

The government is currently exacerbating those three problems rather than alleviating them.

Marius34

schmittel wrote: »

You are stating that a relatively minor fall in the housing stock caused a major % rise of working adults living with at home with parent/s:

This is completely misleading because you are quoting stats for working adults - obviously these stats are influenced by the number of jobs available rather than the number of houses available - i.e the big jump in number of working adults living at home was because there was a big jump in working adults full stop. Unemployment in 2011 was about 15%, double what it was in 2016 at about 7.5%

The figures are less alarming if you look at the numbers of all adults living at home:

In 2011 there were 439,478 adults, aged 18 years and over living at home.
In 2016 there were 458,874 adults, aged 18 years and over living at home.
An increase of 19,396 or 4.4%
Source - https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=E4097&PLanguage=0

Total population increased in that time by 3.8% - https://static.rasset.ie/documents/news/census-2016-summary-results-part-1-full.pdf

Not an alarming increase at all. Just data manipulation. You should know better:

There is a big problem in this country with an inefficient use of the existing housing stock but the idea that there is a crisis chronic shortage is overhyped massively.

What data do I manipulate? I'm providing information what i can find directly from the source, without trying to hide anything. There is things that I might not know, so I may be missing something.

First of all there were no increase in number off adults for the age group of 20-34 at work. Due to demographics people at work actually decreased: From around 663K to 582K. Can't find the report/link, but i took from the following table from https://statbank.cso.ie/:
Home / StatBank / Quarterly National Household Survey Main Results / QNQ24 / Select from table QNQ24

This age group most sensitive to the property supply, as thats the age typically when we make decision to live at home with parent, rent or buy. Number of the working adults, due to high rents decides to live with parents, and probably commuting longer distances.

I'm not sure how you don't see supply side issue, when Ireland has way less living space in comparison with other similar level of economies. How you can solve long term housing issue with current housing stocks...

hometruths

Marius34 wrote: »

What data do I manipulate? I'm providing information what i can find directly from the source, without trying to hide anything. There is things that I might not know, so I may be missing something.

Whilst you may not have manipulated the data you quoted, you did quote data "which doesn't really present the actual Property Market" to make a point about the property market.

Marius34 wrote: »

I'm not sure how you don't see supply side issue, when Ireland has way less living space in comparison with other similar level of economies. How you can solve long term housing issue with current housing stocks...

I see an availability/efficiency problem rather than stock problem. I don't see a long term housing issue. See above.

Marius34

schmittel wrote: »

Whilst you may not have manipulated the data you quoted, you did quote data "which doesn't really present the actual Property Market" to make a point about the property market.



I see an availability/efficiency problem rather than stock problem. I don't see a long term housing issue. See above.

From your other comment you talking mainly moving properties from left to right, right to left. You may solve one problem, and may get into another problem, without new supplies.
Ireland is not any different from other countries in the sense of vacant properties. There are no high vacancy in Ireland nowadays in Urban areas. You expect Ireland to solve issues with low residential housing stock, in a way that no other countries are able to do.

Padre_Pio

schmittel wrote: »

As far as I can see there is no shortage of built housing stock.

That is different to saying there is no shortage of short term available housing supply on the sales and rental market.

But simply trying to solve the short term supply problem by adding to the existing stock is bananas. It is expensive, involves long lead times, and will ultimately only lead to over supply in the long term.

Is this stock in areas where people want to buy?
There's plenty of houses for sale in West Cork, Leitrim, Roscommon, Mayo and Donegal. No one wants to live there.

Looptheloop30

Padre_Pio wrote: »

Is this stock in areas where people want to buy?
There's plenty of houses for sale in West Cork, Leitrim, Roscommon, Mayo and Donegal. No one wants to live there.

A fine example of a sweeping statement

hometruths

Marius34 wrote: »

From your other comment you talking mainly moving properties from left to right, right to left. You may solve one problem, and may get into another problem, without new supplies.

Padre_Pio wrote: »

Is this stock in areas where people want to buy?
There's plenty of houses for sale in West Cork, Leitrim, Roscommon, Mayo and Donegal. No one wants to live there.

I believe ramping up building new supplies now, you may solve one problem short term and may get into another long term.

There is currently no shortage of people who would like to live in West Cork if they could. But they can't due to work and other real life concerns that make it impractical.

But lets imagine 50 years hence. Advances in technologies and work practices will make a lot of those real life concerns less of an issue. Attitudes change and maybe people will value gardens/outdoor space etc more. People are commenting this is happening to some extent now, do we really have any idea what the views might be in 50 years?

The shelf life of a new build now will be 100 years+ I imagine.

I am not suggesting in 100 years time that Dublin will be deserted and everybody will have moved en masse to the sticks.

But I am suggesting it is possible that the demand outside the M50 will rise significantly higher relative to the demand within the M50 over the next 100 years.

If that is even a possibility, smart long term planning would prioritise maximising the efficiency of the current stock before adding to it concentrated in one location.

My problem is nobody is even exploring these options, the mantra is build, build, build.

hometruths

Marius34 wrote: »

From your other comment you talking mainly moving properties from left to right, right to left. You may solve one problem, and may get into another problem, without new supplies.

No, you are missing the entire point. It is not left and right, it is up and down.

We have enough houses, the problem is too many people are in the wrong houses - some people are in houses that need move up in terms of ownership/size/value/location and some are in houses and they need to move down in terms of ownership/size/value/location. Government should be concentrating on policies that encourage these moves.

Marius34 wrote: »

Ireland is not any different from other countries in the sense of vacant properties. There are no high vacancy in Ireland nowadays in Urban areas. You expect Ireland to solve issues with low residential housing stock, in a way that no other countries are able to do.

We are different in terms of our inefficiency of stock. No other country would have allowed the mortgage arrears situation to develop as it has here. That is over 100,000 properties removed from the property market cycle. It is a huge amount and has a knock on effect.

Tackling the arrears problem would have a far quicker impact on the current supply problem than building more properties.

Marius34

schmittel wrote: »

I believe ramping up building new supplies now, you may solve one problem short term and may get into another long term.

Construction is not a short term solution. It takes years from planning to delivering. To get housing space closer to other high economy countries, would require over 10% of current residential stocks, which is around 200,000. It would take over 5 years. So no, it's not a short term.

schmittel wrote: »

We are different in terms of our inefficiency of stock. No other country would have allowed the mortgage arrears situation to develop as it has here. That is over 100,000 properties removed from the property market cycle. It is a huge amount and has a knock on effect.

Tackling the arrears problem would have a far quicker impact on the current supply problem than building more properties.

Those 100,000 properties in arrears are not vacant. So still people from those houses would need to live somewhere. Finding few thousand vacant properties, or squeezing those people to save few thousand of properties, has no significant impact in long term.

hometruths

Marius34 wrote: »

Those 100,000 properties in arrears are not vacant. So still people from those houses would need to live somewhere. Finding few thousand vacant properties, or squeezing those people to save few thousand of properties, has no significant impact in long term.

I said inefficient. Not vacant.

Brussels Sprout

enricoh wrote: »

Is there really a shortage of housing stock? Or is it just for social housing? I reckon so.
Saw an article last year that 20% of new builds in estates were unsold after 6 months. I was surprised at the figure tbh.

It is possible to have both a housing shortage and have unsold houses if the prices of those houses are set higher than the market can bear.

The Student

We have a distorted market that has never been allowed find its natural equilibrium.

If we do have unsold houses and their price is lowered expect cash buyers to purchase them.

Credit will become harder to get and the returns via renting versus bank deposits will make it more attractive.

Hubertj

Brussels Sprout wrote: »

It is possible to have both a housing shortage and have unsold houses if the prices of those houses are set higher than the market can bear.

I think this is where the affordability element comes into it... unsold houses are unaffordable or perhaps people don’t think they represent value even if they can afford them?

Ozark707

The Student wrote: »

If we do have unsold houses and their price is lowered expect cash buyers to purchase them.

Credit will become harder to get and the returns via renting versus bank deposits will make it more attractive.

If rents go further south than they have already then it could put off these purchasers somewhat.

Ozark707

Hubertj wrote: »

I think this is where the affordability element comes into it... unsold houses are unaffordable or perhaps people don’t think they represent value even if they can afford them?

I think one of the issues was that many new builds were targeted at the higher end of the mid marker or above. As that market is not as busy as the lower ends it was going to struggle a bit more anyway. I have noticed a number of places languishing on the market for over 6 months so they have to face reality now in the post Covid world, drop prices (and not just a small amount) or else they will remain unsold for the foreseeable...

Hubertj

Ozark707 wrote: »

I think one of the issues was that many new builds were targeted at the higher end of the mid marker or above. As that market is not as busy as the lower ends it was going to struggle a bit more anyway. I have noticed a number of places languishing on the market for over 6 months so they have to face reality now in the post Covid world, drop prices (and not just a small amount) or else they will remain unsold for the foreseeable...

Agree. Someone put a link to a small development in blackrock the other week. Lovely area but the houses were big money, looked ugly and had a tiny back garden. People didn’t buy because they couldn’t afford them - they didn’t buy because they are crap. In my opinion

The Student

Ozark707 wrote: »

If rents go further south than they have already then it could put off these purchasers somewhat.

Not necessarily. Investors are concerned with ROI so if you can get a better % return after tax and expenses via property than banks people will go for it.

Property at the right price is a safer bet than a bank. We could be heading to negative interest rates for any savings over €100k.

Cyrus

Ozark707 wrote: »

I think one of the issues was that many new builds were targeted at the higher end of the mid marker or above. As that market is not as busy as the lower ends it was going to struggle a bit more anyway. I have noticed a number of places languishing on the market for over 6 months so they have to face reality now in the post Covid world, drop prices (and not just a small amount) or else they will remain unsold for the foreseeable...

They may not

Cairn haven’t dropped their prices in Albany at least not that I have seen and they are on sale 3 year now

Ozark707

The Student wrote: »

Property at the right price is a safer bet than a bank. We could be heading to negative interest rates for any savings over €100k.

I have not heard about this potential development, have you a link to it?

Ozark707

Cyrus wrote: »

They may not

Cairn haven’t dropped their prices in Albany at least not that I have seen and they are on sale 3 year now

So there is a development now sitting idle for 3 years?

Donald Trump

The Student wrote: »

Not necessarily. Investors are concerned with ROI so if you can get a better % return after tax and expenses via property than banks people will go for it.

Property at the right price is a safer bet than a bank. We could be heading to negative interest rates for any savings over €100k.

Ozark707 wrote: »

I have not heard about this potential development, have you a link to it?

In a sense they are there already. albeit small. You might be currently on 0% and paying your quarterly fees.


If the rates are explicitly negative for savings of more than 100k, then you have a few banks to spread your money across before it hits the limit in each of them.


Having more than 100k in an individual bank is not necessarily advisable in any case. The excess over 100k is not state guaranteed.

Donald Trump

Cyrus wrote: »

They may not

Cairn haven’t dropped their prices in Albany at least not that I have seen and they are on sale 3 year now

Simple solution is to put a levy or tax on such developments. I don't know anything about this one in particular, but definitely by the time limit that the limit for planning permission runs out, there should be a levy. Or at the very least the property tax should be being paid by the developer and there could easily be a higher rate for houses that are not lived in full-time.

cnocbui

Donald Trump wrote: »

Simple solution is to put a levy or tax on such developments. I don't know anything about this one in particular, but definitely by the time limit that the limit for planning permission runs out, there should be a levy. Or at the very least the property tax should be being paid by the developer and there could easily be a higher rate for houses that are not lived in full-time.

Would you continue to operate as a developer in this country if the government did such a thing and effectively started dictating to you the price you should sell at, and when, and how much profit or loss you would be forced to?

Apart from that, this might be unconstitutional.

stinger31

I've just been reading through all these pages and have noticed the same people on it everyday who are talking absolute pony. You'd swear they were plants or have a massive interest in saving the housing market. Some of their points are just off the wall. Either Landlords, sellers or estate agents.

A blind man can see whats going to happen to the economy and the housing market but unfortunately these people wont accept it. keep the head in the sand folks

stinger31

Villa05 wrote: »

It was the youth of the country that paid the price for the last recession.

0 hours contracts
Reduced pay in the public service regardless of whether they performed better than their older much higher paid colleagues
Work for free on internships
Temporary contracts
Ever increasing rents

This cohort are the Ftb of today, I just wonder how healthy their finances are and if their really is this pent up demand for entry level houses at current prices

When you take out the bottom rung of the ladder, everything above it falls as well

It's also notable that the government are prepping the youth of today saying that youth unemployment will rise substantially in this coming recession

It seems odd that when older folk are disadvantaged, "we are all in this together" to help get to the other side safely. Eg covid 19, health insurance pricing

When it's our sons and daughters are affected negatively like recessions, spiralling accommodation costs, employment terms and conditions, car insurance this togetherness is lost and we allow a system that pulls up the ladder for the people in it severely affecting new entrants

How long will this continue?

brilliant post

The Student

Ozark707 wrote: »

I have not heard about this potential development, have you a link to it?

This is what I think will happen as a way to force savings out of the banks. It still allows people have savings of 100k. There are people with multiples of this in banks at that moment.