Dublin - Significant reduction in rents coming?

wonski

This is the main issue with rent reductions some landlords are willing to offer to the tenants, but can't because of that rule.

If tax was not due on unpaid rent the landlord could just ask the tenant to pay reduced rent over next month or two and just not chase the tenant for the arrears. Problem solved.

But with tax due on the full rental amount due this isn't an option.

Yakov P. Golyadkin

The Student wrote: »

Could you provide the specific link please as I have tried to find it on their site but can't.

I didn't believe it either but take the previous posters text and Google it, first result is a link to an IPAV pdf with those exact words.

wonski

wonski wrote: »

This is the main issue with rent reductions some landlords are willing to offer to the tenants, but can't because of that rule.

If tax was not due on unpaid rent the landlord could just ask the tenant to pay reduced rent over next month or two and just not chase the tenant for the arrears. Problem solved.

But with tax due on the full rental amount due this isn't an option.

I would have though you can claw that back by offsetting against future tax, should actual rent paid be less than than the receivable in which tax was paid. It surely would be a loss, which you could offset in future years

wonski

[Deleted User] wrote: »

I would have though you can claw that back by offsetting against future tax, should actual rent paid be less than than the receivable in which tax was paid. It surely would be a loss, which you could offset in future years

That could be a solution to the issue. Not a landlord meself, but was just thinking about it from Revenue point. If landlords start to declare underpayment in rent are they just allowed not to chase it and avail of tax being paid on rent received that year?

Just guessing that this could open a loophole to some landlords that have (too) good relationship with tenants.

Ozark707

wonski wrote: »

This is the main issue with rent reductions some landlords are willing to offer to the tenants, but can't because of that rule.

If tax was not due on unpaid rent the landlord could just ask the tenant to pay reduced rent over next month or two and just not chase the tenant for the arrears. Problem solved.

But with tax due on the full rental amount due this isn't an option.

Well I reckon they will not enforce this if many are severely out of pocket...I am sure Joe would be getting a call or 10...

handlemaster

Ozark707 wrote: »

Well I think many LL's will have to accept the new reality and negiotiate with their tenants anyway. Be that a 10 or 20% reduction. I don't however see a mass movement of tenants refusing to stump up anything, of course there will be a number who will but I hope it is in the minority. As a tenant myself I value having a good landlord but he has to now accept the new reality that I could probably secure similar accommodation for 10/20% less than what he is charging.

You could but wont not in Dublin. Why should your landlord accept that. She have given you the property at an agreed rent. Have you lost your job ? Did you put no savings aside for lifes ups and downs ? Do people not plan any more or take responsibility. This is just what two months in that should be perfectly manageable. People should have savings and plan for their future. Its the virus this time but it will be somthing else nex t year or the year after.

Ozark707

handlemaster wrote: »

You could but wont not in Dublin. Why should your landlord accept that. She have given you the property at an agreed rent. Have you lost your job ? Did you put no savings aside for lifes ups and downs ? Do people not plan any more or take responsibility. This is just what two months in that should be perfectly manageable. People should have savings and plan for their future. Its the virus this time but it will be somthing else nex t year or the year after.

My lease is up, I would just have to give the requisite notice (which I would). Why would I not look for better value?

handlemaster

handlemaster wrote: »

Did you put no savings aside for lifes ups and downs ? Do people not plan any more or take responsibility. This is just what two months in that should be perfectly manageable. People should have savings and plan for their future.

I really cannot abide this privileged attitude.

Considering just under 50% of my income goes on rent, I would love to see how I could save for anything, and still support, feed and clothe my partner and baby.

Idiotic post expecting everyone to have 2+ months worth of income saved. No idea how the less well off live at all.

overkill602

Deleted User wrote: »

I really cannot abode this privileged attitude.

Considering just under 50% of my income goes on rent, I would love to see how I could save for anything, and still support, feed and clothe my partner and baby.

Idiotic post expecting everyone to have 2+ months worth of income saved. No idea how the less well off live at all.

You can leave a rental property anytime your not tied to it unlike a mortgage

the LL can get another person to so don't worry about it

you are free to choose a place 1/3 your income or buy?
if you don't want to be a privileged don't expect others to live by your rules, i think is the opposite an attitude is an unfavourable circumstance or condition that reduces the chances of success or effectiveness, ah there you go its always someones else's fault.

wonski

I think the general view is that not everyone is in position to have savings, or 3 months rent available just in case.

I guess some don't understand that not all people are living the dream. Some are just living from one week to another, many not through their own fault. If you don't get it, you never will.

Gone Drinking

wonski wrote: »

I think the general view is that not everyone is in position to have savings, or 3 months rent available just in case.

I guess some don't understand that not all people are living the dream. Some are just living from one week to another, many not through their own fault. If you don't get it, you never will.

People assume Landlords are rich and some are but many are not. What if the landlord is similarly not living the dream and doesn't have savings or 3 months mortgage available just in case?

In my opinion it goes both ways, there should be some movement available from both sides. I don't think any one side should front the burden completely.

FYI: I'm a tenant, not a landlord and I've also been in the position of living week to week in the past.

wonski

Gone Drinking wrote: »

People assume Landlords are rich and some are but many are not. What if the landlord is similarly not living the dream and doesn't have savings or 3 months mortgage available just in case?

In my opinion it goes both ways, there should be some movement available from both sides. I don't think any one side should front the burden completely.

FYI: I'm a tenant, not a landlord and I've also been in the position of living week to week in the past.

I don't assume. In 7 years of renting same place I never did. But when things went a little rough for me my landlord agreed to have rent paid a bit later. That was the only time.

Lovely people and I would never take advantage of them, and they never would as well. All by the book, they actually apologised when they raised the rent.

I completely agree with you. But blaming people for not being ready for this?

Blut2

handlemaster wrote: »

You could but wont not in Dublin. Why should your landlord accept that. She have given you the property at an agreed rent. Have you lost your job ? Did you put no savings aside for lifes ups and downs ? Do people not plan any more or take responsibility. This is just what two months in that should be perfectly manageable. People should have savings and plan for their future. Its the virus this time but it will be somthing else nex t year or the year after.

A few years ago a study showed that 1.8million people in Ireland are left with less than €100 to live on at the end of every month, after they pay bills. Thats about half the adults in Ireland. Good luck trying to put "savings aside for lifes ups and downs" in that situation.

It might have improved up to February 2020, but its going to head back to there shortly (if it hasn't already).

Having enough savings to cover multiple months of no income coming in is pretty much exclusively a preserve of the well off.

overkill602

overkill602 wrote: »

You can leave a rental property anytime your not tied to it unlike a mortgage

You think I can afford to lose a deposit?

the LL can get another person to so don't worry about it

2 or 3 months ago, yes. Now? And for the next year? We'll see.

you are free to choose a place 1/3 your income or buy?

Buy?! Are you having a laugh? We have no savings, where or who would lend us money? We have no rich parents to sponge a loan for the deposit off. As for choose a place a third of my income? No chance you'd find that. I work in Dublin and live an hour away as it is.

if you don't want to be a privileged don't expect others to live by your rules, i think is the opposite an attitude is an unfavourable circumstance or condition that reduces the chances of success or effectiveness, ah there you go its always someones else's fault.

You have no clue. The sentence doesn't even make sense, except to say at the end it must be someone else's fault. Which I never said it was.

I don't really give a damn tbh. The rental sector is about to get f*cked, and I won't lose sleep over some landlords selling up or the chickens coming home to roost for those that over extended themselves.

Dav010

[Deleted User] wrote: »

You think I can afford to lose a deposit?




2 or 3 months ago, yes. Now? And for the next year? We'll see.


Buy?! Are you having a laugh? We have no savings, where or who would lend us money? We have no rich parents to sponge a loan for the deposit off. As for choose a place a third of my income? No chance you'd find that. I work in Dublin and live an hour away as it is.



You have no clue. The sentence doesn't even make sense, except to say at the end it must be someone else's fault. Which I never said it was.

I don't really give a damn tbh. The rental sector is about to get f*cked, and I won't lose sleep over some landlords selling up or the chickens coming home to roost for those that over extended themselves.

That is everyone’s prerogative, neither you nor the LL have to care about each other. This is a business transaction, pure and simple. Yes, the rental sector probably will get f**cked, but don’t be naive and think that tenants will be able to lie back afterwards and lite up. Tenants need LLs as much as LLs need tenants. If your LL and many others go under, banks will require vacant possession, so you go. Or, if you don’t pay, eviction follows with diminished prospects of getting another rental.

It’s likely rents will fall depending on income, but you should be asking yourself where you are going to go. Right now, coexistence and understanding is necessary on both sides, but with building delayed and lack of investment in rental properties, it’s hard to see major drops in rentals. The demand from public sector workers, migration by people looking for new jobs and those whose jobs are not substantially effected will mean there will still be a rental market.

WFH is fine, if your job involves only a laptop and phone, many don’t.

Ozark707

Dav010 wrote: »

Right now, coexistence and understanding is necessary on both sides, but with building delayed and lack of investment in rental properties, it’s hard to see major drops in rentals.

There does not seem to be a shortage of units that are already or coming on stream from the REIT's. Many of the listings for these on daft contain several units. Up until now they were happy to see these remain idle but now that capital values are likely to decrease maybe they will need the rent roll? The rents they are looking for were pretty unachievable pre-Covid (hence the vacancies)...now they have not a snowballs chance in hell if they keep to those levels.

Going to be an interesting few months either way...

Dav010

Ozark707 wrote: »

There does not seem to be a shortage of units that are already or coming on stream from the REIT's. Many of the listings for these on daft contain several units. Up until now they were happy to see these remain idle but now that capital values are likely to decrease maybe they will need the rent roll? The rents they are looking for were pretty unachievable pre-Covid (hence the vacancies)...now they have not a snowballs chance in hell if they keep to those levels.

Going to be an interesting few months either way...

When you say “no shortage”, there was an article on Friday about rental units in central Dublin advertised on daft, there was an increase of 20 units last week.

Quote:

The so-called surge in rental properties available has eased from 170 additional properties in the week just after schools were closed to fewer than 20 additional rental properties in Central Dublin two weeks ago, the property website (Daft.ie) said.

Ozark707

Dav010 wrote: »

When you say “no shortage”, there was an article on Thursday about rental units in central Dublin advertised on daft, there was an increase of 20 units last week.

Quote:

The so-called surge in rental properties available has eased from 170 additional properties in the week just after schools were closed to fewer than 20 additional rental properties in Central Dublin two weeks ago, the property website (Daft.ie) said.

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/?s=volume

Appears we are at multi year highs in Dublin availability... rents for 1,2 bed Apt’s are now back at 2018 levels... all in the space of 6 weeks or so... as I said an interesting few months either way coming up...

Dav010

Ozark707 wrote: »

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/?s=volume

Appears we are at multi year highs in Dublin availability... rents for 1,2 bed Apt’s are now back at 2018 levels... all in the space of 6 weeks or so... as I said an interesting few months either way coming up...

Be that as it may, 20 additional units in the capital centre in a week is hardly “no shortage”. I suspect there are regional towns where more than that went up on daft.

Ozark707

Dav010 wrote: »

Be that as it may, 20 additional units in the capital centre in a week is hardly “no shortage”. I suspect there are regional towns where more than that went up on daft.

Well the increase in supply has already brought about ~8% reduction in average prices in 1 & 2 bed apartments (comparing figures from 15 Mar and 01 May). I would also venture that pre Covid the chances of getting anything off asking were slim whereas now I think you would be well advised to negotiate. I would think we will see further reductions going forward but maybe most of them have now being baked in. With Harris effectively ruling out tourism for the rest of the year there is no prospect of Airbnb recovering in the short to medium term.

Dav010

Ozark707 wrote: »

Well the increase in supply has already brought about ~8% reduction in average prices in 1 & 2 bed apartments (comparing figures from 15 Mar and 01 May). I would also venture that pre Covid the chances of getting anything off asking were slim whereas now I think you would be well advised to negotiate. I would think we will see further reductions going forward but maybe most of them have now being baked in. With Harris effectively ruling out tourism for the rest of the year there is no prospect of Airbnb recovering in the short to medium term.

C’mon Ozark, an 8% drop between March 15 and May 1 is hardly going to be indicative of what is going to happen. The sector has been closed during that period. The real effect will be seen in the months after lifting of the restrictions on movement. Then we will see what the true effect is, whether prices drop significantly or stagnate.

In relation to Airbnb, the lack of international visitors will certainly have an effect on bookings. It is possible that this is connected to the small rise in rentals available. But when you consider that Airbnb accounts for about 1% of the rental market, I don’t see how those properties would make any difference at all. Some of the properties advertised to let now in Dublin are <6mth lets, presumably so that they can be sold/let to students/short term let again.

Ozark707

Dav010 wrote: »

C’mon Ozark, an 8% drop between March 15 and May 1 is hardly going to be indicative of what is going to happen. The sector has been closed during that period. The real effect will be seen in the months after lifting of the restrictions on movement. Then we will see what the true effect is, whether prices drop significantly or stagnate.

In relation to Airbnb, the lack of international visitors will certainly have an effect on bookings. It is possible that this is connected to the small rise in rentals available. But when you consider that Airbnb accounts for about 1% of the rental market, I don’t see how those properties would make any difference at all. Some of the properties advertised to let now in Dublin are <6mth lets, presumably so that they can be sold/let to students/short term let again.

Yep I think we need to see what happens once restrictions are lifted. Right now it is not possible to move to somewhere else that is cheaper than what you might be currently paying. Once it is opened up then people will be able to seek out cheaper options.

I wouldn't consider a 8% drop (and more with some negotiation) to be small beer though. As others on this thread have outlined if you are living pay check to pay check any reduction on your single biggest outgoing would be welcomed.

Hubertj

Ozark707 wrote: »

Yep I think we need to see what happens once restrictions are lifted. Right now it is not possible to move to somewhere else that is cheaper than what you might be currently paying. Once it is opened up then people will be able to seek out cheaper options.

I wouldn't consider a 8% drop (and more with some negotiation) to be small beer though. As others on this thread have outlined if you are living pay check to pay check any reduction on your single biggest outgoing would be welcomed.

Does the data show how many units were let? Or does it only reflect the asking price? As with most sectorS or industries during the lockdown, sales or volume figures of any kind are irrelevant due to restrictions. I agree the casual impact wont be visible for a few months.

Ozark707

Hubertj wrote: »

Does the data show how many units were let? Or does it only reflect the asking price? As with most sectorS or industries during the lockdown, sales or volume figures of any kind are irrelevant due to restrictions. I agree the casual impact wont be visible for a few months.

These figures are scraped from Daft so would be just be AP. There was a report from CSO (I think) earlier in the week where they had analysis of RTB figures for Q4 2019. Interestingly they showed that QoQ Dublin rents were down 2%. Unfortunately therefore there is a 4-5 month lag on transaction data and as you say as the volumes being let (not advertised which is at multi year highs) will be low during lockdown.

I am not saying that this trend will continue and maybe once some degree of normality is back then asking prices may start to go back up to previous levels. My guy feeling is that the rental market will adapt quicker than the selling one as it is not as easy to sit on an empty asset unless you are cash rich (unless the banks are going to be generous to you).

There is a development near Heuston Station that looked like it was almost ready to hit the market. It looked very substantial (from driving past it). If there are a number of similar sized developments which are due to come on in the short term that alone will substantially increase availability (there are only ~2.2k listings on daft for Dublin today).

JimmyVik

Blut2 wrote: »

A few years ago a study showed that 1.8million people in Ireland are left with less than €100 to live on at the end of every month, after they pay bills. Thats about half the adults in Ireland. Good luck trying to put "savings aside for lifes ups and downs" in that situation.

It might have improved up to February 2020, but its going to head back to there shortly (if it hasn't already).

Having enough savings to cover multiple months of no income coming in is pretty much exclusively a preserve of the well off.

Do you have a link to this study?
Woudlnt mind a look at it.


Do they have all the peoples outgoings and incomings in it?


eg I now someone who gets €2000 net per month. Has a mortgage of €800, and a lovely looking car thats costing him €650pm. He has the top sky sports package, gym membership and golf club membership and is down in the pub at least 3 nights a week. He would argue, and often does, that he has less than €100 a week to live on. I would stick my middle finger up to him.

Saudades

JimmyVik wrote: »

I now someone who gets €2000 net per month. Has a mortgage of €800,

Fair play to him, he's done very well obtaining a mortgage with a net of 2k a month.

voluntary

Neighours just moving out. With no jobs and on social payment decided not worth to pay rent so are moving back to family somewhere in the country. There will surely be more people like them.

Ozark707

Myhome saying rent prices will come down. Guess that is based on talking to several EA's.

"I think rent and house prices will be impacted."

https://www.independent.ie/irish-news/virus-and-brexit-blamed-as-national-property-sales-slump-by-46pc-39181321.html

Blut2

JimmyVik wrote: »

Do you have a link to this study?
Woudlnt mind a look at it.

Do they have all the peoples outgoings and incomings in it?

eg I now someone who gets €2000 net per month. Has a mortgage of €800, and a lovely looking car thats costing him €650pm. He has the top sky sports package, gym membership and golf club membership and is down in the pub at least 3 nights a week. He would argue, and often does, that he has less than €100 a week to live on. I would stick my middle finger up to him.

I can't find a link to the full study handily because its a few years old, but heres a Journal article that breaks down its details: https://www.thejournal.ie/credit-union-money-survey-1096570-Sep2013/

There aren't any fancy car payments or golf club memberships or 3 nights a week in the pub, some of the key figures:


The survey found that the average net income after tax for a household is €2,604.

There are lots of "average spends" listed that add up to far more than that if they were all included. But the key ones for most people would be:

Mortgage: €817
Electricity: €84
Gas: €66
Bin charges: €26

Credit card payments: €268
Personal loan repayments: €262
Pension contribution: €168
Health insurance: €137

Groceries: €338
Car insurance: €62
Petrol/diesel: €144
Car tax: €68
Public transport: €46

Childcare: €285
Internet: €25
Mobile phone: €36
Clothes/shoes: €58

For a total of €2891

Thats almost 300euro over the average household net income per month. And that doesn't include any TV, or golf memberships, or any alcohol or socialising at all. Not exactly living the high life.

JimmyVik

Saudades wrote: »

Fair play to him, he's done very well obtaining a mortgage with a net of 2k a month.

Hes had that mortgage for a long time. Probably nearly finished it now. I think he was probably on even less when he first got the mortgage.
So if he sold his house and his car he is probably close to being a millionaire and yet he says he lives on less than €100 a week.