Dublin - Significant reduction in rents coming?

JimmyVik

Blut2 wrote: »

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.

That average person would benefit from some budgeting advice

Sunny Disposition

Is it not easy to see that with average rents at the price they have been for the last couple of years in the capital, it’s a question of when they come down rather than it? It’s a huge political issue now, so even if the market didn’t come back to some kind of normality on its own, politicians were going to force it.

Phat Cat

Sunny Disposition wrote: »

Is it not easy to see that with average rents at the price they have been for the last couple of years in the capital, it’s a question of when they come down rather than it? It’s a huge political issue now, so even if the market didn’t come back to some kind of normality on its own, politicians were going to force it.

Prices simply must come down, they have been far too high for too long now and I think that it has finally gotten to the stage where the buck has to stop somewhere.

I'm a homeowner, but I used to rent in the Celtic Tiger era and late '00's and renting back then was (approx.) the equivalent of an average monthly mortgage repayment. I only rented back then to try and save for a deposit, but what hope has anybody got trying to save for anything these days?

The last place that I rented was a one bedroom apartment close to Stephen's Green that cost me €900 per month. Ten years later and the same place was on Daft.ie for €1750 per month. That's extortionate!

The_Conductor

Dav010 wrote: »

The RTB report at the end of the year will tell the story.

The RTB report to 31-Dec-2019 will be published before the end of July. It'll be July 2021 before you see their 2020 report.

Dav010

The_Conductor wrote: »

The RTB report to 31-Dec-2019 will be published before the end of July. It'll be July 2021 before you see their 2020 report.

If the eviction embargo is extended for another 3 months as has been suggested, it could even be July 2022 before all the post Covid cases are reported as many will not be adjudicated on until early 2021.

The_Conductor

Dav010 wrote: »

If the eviction embargo is extended for another 3 months as has been suggested, it could even be July 2022 before all the post Covid cases are reported as many will not be adjudicated on until early 2021.

True- but to give them their dues- they do try to minimise the carryover between years- as aside from any other reason, it thoroughly bolloxes up their statistics.

We're going to get some very interesting reading material in July 2021.

I suspect its only a very small minority of tenants who are going to play the system on this- however, their impact is going to have an outsized influence on landlords and the business side relationship in the sector, for a long time to come.

It does beggar belief that the Minister is completely deaf to the impact his policies are having.

The Student

The_Conductor wrote: »

True- but to give them their dues- they do try to minimise the carryover between years- as aside from any other reason, it thoroughly bolloxes up their statistics.

We're going to get some very interesting reading material in July 2021.

I suspect its only a very small minority of tenants who are going to play the system on this- however, their impact is going to have an outsized influence on landlords and the business side relationship in the sector, for a long time to come.

It does beggar belief that the Minister is completely deaf to the impact his policies are having.

See this https://www.independent.ie/business/personal-finance/property-mortgages/mortgage-holders-warned-payment-breaks-to-prove-costly-39183118.html

The Student

The Student wrote: »

See this https://www.independent.ie/business/personal-finance/property-mortgages/mortgage-holders-warned-payment-breaks-to-prove-costly-39183118.html

Off topic, I know, but I took a payment break when I went back to college. Biggest mistake ever. I couldn’t believe the balance at the end of it. It was like I was starting to pay my mortgage from scratch all over again. I still regret it today, 12 years on, when I think what my balance would be now. People should try as hard as they can to not take a mortgage break, especially if quite early in their mortgage term. Use savings, borrow or beg from family. Mortgage breaks should be the very last resort

Assetbacked

https://www.thejournal.ie/airbnb-job-losses-5092116-May2020/

AIRBNB HAS CONFIRMED that almost 1,900 employees will lose their jobs as the company deals with the impact of the Covid-19 pandemic.

About 25% of the company’s 7,500 employees will be let go.

Several hundred people are employed by the company in Dublin, but it is not yet clear if they are affected by the cuts.

Despite raising 2bn in capital in recent weeks and lockdown only going on for less than 2 months, already Airbnb has to be gutted. That's quite astonishing and indicates some serious problems the tourism sector will have to deal with over the coming months and possibly years.

Muahahaha

Airbnb CEO also gave an assessment on revenues, less than half of 2019

Airbnb co-founder and CEO Brian Chesky confirmed the job losses in a statement sent to staff members today. He said the company has been “hit hard”, with revenue this year forecasted to be less than half of what was made in 2019.

“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” Chesky said in the statement.

2020 definitely a write off now for any kind of large scale tourism.

Hubertj

Assetbacked wrote: »

https://www.thejournal.ie/airbnb-job-losses-5092116-May2020/



Despite raising 2bn in capital in recent weeks and lockdown only going on for less than 2 months, already Airbnb has to be gutted. That's quite astonishing and indicates some serious problems the tourism sector will have to deal with over the coming months and possibly years.

To be expected - realistically i think it will be 2022 before tourism gets back to proper growth. Fast testing and anti body testing combined with effective treatments will begin to restore consumer confidence before a vaccine. Airbnb has to reset. Feel sorry for people in the Irish office that will presumably be impacted.

awec

AirBnB is going to have a tough time because aside from the obvious tourism implications there is certain to be some enforcement of regulation coming that'll affect their bottom line as well.

All those properties that disappeared from AirBnb over the past few weeks are not going to end up back on the site when things open up again. No government will allow things to get back to the state they were in.

Assetbacked

Muahahaha wrote: »

Airbnb CEO also gave an assessment on revenues, less than half of 2019



2020 definitely a write off now for any kind of large scale tourism.

I'm just not entirely sure about this.

On the one hand, we have the government restricting the economy with the covid19 measures it has introduced but it is making a payment of €350 per week to staff in order to ensure no jobs are lost as a result of these measures. On the other hand, the government can't tell businesses to half open and then stop paying the salaries of the staff as it would be unfair to expect the businesses to try to survive with only limited capacity. The big college American football game held each year in August is still due to go ahead this year in the Aviva, I think.

Muahahaha

I dont think that game of American football will go ahead, its more so that they just havent cancelled it yet and are playing a wait and see game unlikely to bear fruit. If they dont cancel it the govt. will as 40 or 50k Americans coming here during a pandemic would not be politically palatable.

Theres also a chance that restrictions come in for people to self isolate for 2 weeks when entering a country and then do it again when you get back to your own country. It would make travel completely unfeasible. Travel and Airbnb are hugely reliant on the release of a vaccine, everything else is just teetering around the edges until that comes along imo.

Assetbacked

Muahahaha wrote: »

I dont think that game of American football will go ahead, its more so that they just havent cancelled it yet and are playing a wait and see game unlikely to bear fruit. If they dont cancel it the govt. will as 40 or 50k Americans coming here during a pandemic would not be politically palatable.

Theres also a chance that restrictions come in for people to self isolate for 2 weeks when entering a country and then do it again when you get back to your own country. It would make travel completely unfeasible. Travel and Airbnb are hugely reliant on the release of a vaccine, everything else is just teetering around the edges until that comes along imo.

The wait for the vaccine is like the wait for Brexit fallout; it may never come. I've noticed there doesn't seem to be a phase beyond our phase five in the easing plans which indicates potentially that the phase five plan is how we will be living for the foreseeable future!

LuckyLloyd

AirBnB lost 654m in 2019. This wouldn’t have been a problem moving towards their long awaited IPO this year, but in the current context it has probably helped to bring things to a head like this. They were burning through cash.

Confidence in the US will need to return in a big way before the end of this year if they’re to avoid further cuts imo.

Assetbacked

https://www.thejournal.ie/rent-supplement-increases-covid-19-ireland-5089521-May2020/

An article on the simmering problem created for renters by covid19. There has been a big uptake in the numbers receiving rental support (not HAP) combined with a fear that lower paid workers are in a precarious position of being unable to pay rent and therefore facing eviction once the ban on terminating tenancies is lifted.

I'm not sure where this rental support cash can come from in a post-covid19 economy if more and more people need it. Given the struggle to evict tenants maybe landlords will be forced to negotiate lower rents with sitting struggling tenants rather than embark on the tedious eviction process?

DubCount

Assetbacked wrote: »

https://www.thejournal.ie/rent-supplement-increases-covid-19-ireland-5089521-May2020/

An article on the simmering problem created for renters by covid19. There has been a big uptake in the numbers receiving rental support (not HAP) combined with a fear that lower paid workers are in a precarious position of being unable to pay rent and therefore facing eviction once the ban on terminating tenancies is lifted.

I'm not sure where this rental support cash can come from in a post-covid19 economy if more and more people need it. Given the struggle to evict tenants maybe landlords will be forced to negotiate lower rents with sitting struggling tenants rather than embark on the tedious eviction process?

Ah yes. When the government needs money - cant the Landlords pay !!

The government is responsible for housing those that cant afford to pay, not Landlords.

If rents fall, Landlords can leave the market. We don't need more "forcing landlords" to do anything at a time when we need more of them, not less.

beauf

Sunny Disposition wrote: »

Is it not easy to see that with average rents at the price they have been for the last couple of years in the capital, it’s a question of when they come down rather than it? It’s a huge political issue now, so even if the market didn’t come back to some kind of normality on its own, politicians were going to force it.

This is the second time they've risen so high, and this time it blew past the last record. The solution is supply and both times the govt has done almost nothing about supply. (Or demand). Ireland's worst housing crisis in the history of the state.

The politicians were going to do nothing...

Assetbacked

DubCount wrote: »

Ah yes. When the government needs money - cant the Landlords pay !!

The government is responsible for housing those that cant afford to pay, not Landlords.

If rents fall, Landlords can leave the market. We don't need more "forcing landlords" to do anything at a time when we need more of them, not less.

Lower rents = less rental support needed. Therefore, measures by the new government to make rents fall are needed to pay for the increased numbers needing rental support. With the recent history of FG and their best efforts to push landlords out of the market, I wouldn't hold my breath they will be succesful at making rents lower.

beauf

Assetbacked wrote: »

....Given the struggle to evict tenants maybe landlords will be forced to negotiate lower rents with sitting struggling tenants rather than embark on the tedious eviction process?

What happened last time.

Vast numbers of landlords left the market, and last I checked some came back over the last 10yrs but the numbers never recovered to the same level and had started to fall again before this crisis.

So what is the likely outcome of yet more one sided govt intervention this time. Considering the predicted fall in property prices and the locks on lowering and increasing rent. Maybe not but it's very likely some big numbers will leave the market again.

As soon as they are allowed, when ever that is...

Squeeonline

beauf wrote: »

This is the second time they've risen so high, and this time it blew past the last record. The solution is supply and both times the govt has done almost nothing about supply. (Or demand). Ireland's worst housing crisis in the history of the state.

The politicians were going to do nothing...

DubCount wrote: »

Ah yes. When the government needs money - cant the Landlords pay !!

The government is responsible for housing those that cant afford to pay, not Landlords.

If rents fall, Landlords can leave the market. We don't need more "forcing landlords" to do anything at a time when we need more of them, not less.

What's the % of irish politicians who are also landlords? I remember it being around 30% maybe even higher. Good luck with that conflict of interest. No incentive for any real change.

beauf

Squeeonline wrote: »

What's the % of irish politicians who are also landlords? I remember it being around 30% maybe even higher. Good luck with that conflict of interest. No incentive for any real change.

Flaw in that theory is that they did make lots of changes over the years to improve protection for tenants and not for landlords. Even in this crisis they have done the same.

Assetbacked

Squeeonline wrote: »

What's the % of irish politicians who are also landlords? I remember it being around 30% maybe even higher. Good luck with that conflict of interest. No incentive for any real change.

The difference this time is that FG and FF are huddled together with the rifle of housing having its sights set on them by the electorate, being a bigger target than SF who will claim they are the change and had no hand in creating the problem (which is untrue when you look at the NIMBY SF councils in Dublin).

Hubertj

Assetbacked wrote: »

The difference this time is that FG and FF are huddled together with the rifle of housing having its sights set on them by the electorate, being a bigger target than SF who will claim they are the change and had no hand in creating the problem (which is untrue when you look at the NIMBY SF councils in Dublin).

how can government force landlords to accept lower rents though? this would also lower income tax receipts further. do they have power to legislate for this? If a landlord has a binding contract / lease with a tenant and either party breaches those terms it can be terminated or referred to the RTB(?) for resolution. Does the RTB have power to alter contract terms?

Assetbacked

Hubertj wrote: »

how can government force landlords to accept lower rents though? this would also lower income tax receipts further. do they have power to legislate for this? If a landlord has a binding contract / lease with a tenant and either party breaches those terms it can be terminated or referred to the RTB(?) for resolution. Does the RTB have power to alter contract terms?

I was thinking more about an indirect consequence of the policy to make evictions incredibly difficult, that it is easier to just accept less rent than embark on the long winded and uncertain procedure to evict via the RTB.

JimmyVik

DubCount wrote: »

Ah yes. When the government needs money - cant the Landlords pay !!

The government is responsible for housing those that cant afford to pay, not Landlords.

If rents fall, Landlords can leave the market. We don't need more "forcing landlords" to do anything at a time when we need more of them, not less.

Im thinking the government might actually be preparing to prevent landlords from leaving the market. Im sure there are ways of doing this. And im sure they are being discussed.

Ozark707

Hubertj wrote: »

how can government force landlords to accept lower rents though? this would also lower income tax receipts further. do they have power to legislate for this? If a landlord has a binding contract / lease with a tenant and either party breaches those terms it can be terminated or referred to the RTB(?) for resolution. Does the RTB have power to alter contract terms?

I think this is more a practical issue. Would a LL chase a tenant if they left a place that he was charging them 2k a month but can re-let for 1.9k? Absolutely if there is damage but from my discussions with LL's they prefer to just move on as dealing with the RTB is a major pain. I think most LL's would want to minimise any potential vacancy period.

beauf

PRTB just takes too long for no return. Only reason LL deal with it, is to avoid the enormous one sided fines that they they only apply to Landlords. The only practical counter is to re-rent as fast as possible.

LuckyLloyd

DubCount wrote: »

Ah yes. When the government needs money - cant the Landlords pay !!

The government is responsible for housing those that cant afford to pay, not Landlords.

If rents fall, Landlords can leave the market. We don't need more "forcing landlords" to do anything at a time when we need more of them, not less.

Landlords can try and sell up and exit the market alright, but that won't be an appealing prospect in a declining market. They can also potentially go through an eviction process with a tenant paying what they can (which is short of the previously agreed rent). During which some percentage of such tenants may stop paying entirely. Anther unappealing prospect I'd have thought.

Or they renegotiate with their tenants and keep rent coming in and their tenant on an even keel. You may be surprised by the amount of LLs who see the wood from the trees and take a pragmatic approach imo.