Dublin - Significant reduction in rents coming?

Hubertj

Assetbacked wrote: »

One big dent that could be made is if the government committed to delivering the social and affordable housing itself this would be a big saver to the exchequer instead of paying out rents to landlords themselves. At least SF are committed to that in their manifesto anyway.

It would also stop the State competing with tenants in the rental market. This policy of directly competing in a tight market with private tenants is a ticking time bomb as rents go higher, the State has to pay more and more while private tenants see less and less benefit to working themselves. Even more so is it an issue when these landlords are instituonals with foreign shareholders which means no tax is paid on the rent. Imagine, taxpayers money being funnelled by the State out of the country with no exit tax. Rental yields are propping up the house price market too,due to these types of articifical rental market inflation practices. There is a gut feeling I have that there is some type of housing market bubble again, despite being more optimistic in my posts about the rental sector being more exposed and being separate to the purchasing market, the practices in the rental market are so outragoue that it feels there is a massive overstatement regarding the booming nature of the rental marlet. Covid is a stress test, as is Brexit, and there will be more like for example OECD global tax alignment hurting our MNC activities, but I do feel there is something there which could pop, not befitting of "soft landing" talk.

I agree with you on all points. However short term government has to provide housing so has to turn to private sector to deliver it. They can’t do nothing until they start building themselves, such as shankill (I think).
Is it true that rents are at record levels but property prices are still 15%-20% below 2007? If so, how did that change?

Assetbacked

Hubertj wrote: »

I agree with you on all points. However short term government has to provide housing so has to turn to private sector to deliver it. They can’t do nothing until they start building themselves, such as shankill (I think).
Is it true that rents are at record levels but property prices are still 15%-20% below 2007? If so, how did that change?

Maybe the mortgage lending restrictions are stopping them from going higher?

Hubertj

Assetbacked wrote: »

Maybe the mortgage lending restrictions are stopping them from going higher?

Ah yes of course. Should have copped that myself. Nice 1. Then add in lack of supply.... perfect sh*tstorm

redarmyblues

Hubertj wrote: »

I agree with you on all points. However short term government has to provide housing so has to turn to private sector to deliver it. They can’t do nothing until they start building themselves, such as shankill (I think).
Is it true that rents are at record levels but property prices are still 15%-20% below 2007? If so, how did that change?

It depends where you when to ask are rents at record levels, just before Covid I seen a 2 bed apartment that I rented in 2004 for 700e advertised for 850e. A quick fag packet calculation based on a couple on minimum wage at both times means that place is slightly more affordable now than then. One of The biggest problem the rental market is facing that mom and pop LLs are leaving the market. The RTB starts show that a merry 8K left in the 12 months to last Jan up from 6K the previous year. These units are either left empty, bought by OOs our repurposed as social housing but lost to the private rental section. There was a huge oversupply at the start of the 2010s because some investors were happy not to let and enjoy capital appreciation. The only way that rental prices goes down if is demand drops and supply remains the same or increases. It is predicted in some quarters that the exodus of LLs will accelerate due to Covid and that demand will fall due to Covid whether that causes rent to fall may be moot for many of they find themselves back in their old room in the mother's house.

brisan

Blut2 wrote: »

As a moral stand you could argue it has some logic/justification, though. Even if its not going to achieve anything. As a business decision its extremely stupid.

To let an income generating asset sit idle for an indefinite lengthy period of time to come, possibly years, is not good business. Whatever about the risks associated with renting it out - those are still only minimal. The vast vast majority of tenants in Ireland are still OK. But if the property sits vacant its guaranteed 0 income.

And theres no prospect of a landlord friendly government entering power in Ireland in 3 months, or even 12 months, or 36 months like. Things are not going to get more pro-landlord. If anything they're going to get significantly more pro-tenant as the economic situation worsens.

And with Sinn Fein now the largest party in opposition, the leader of the opposition, and the bookies favourite to win the most seats in the next election... The medium/long-term outlook is even worse for landlords rights, if anything.

The only two viable options from a business point of view are either suck up the new stricter regulations, drop the rental price and get tenants in who're actually paying. Or else just sell up and get out of the market entirely. Holding the property and keeping it vacant, in the hope of more pro-landlord regulations coming in, is somewhere between naive and idiotic.



The property agents are lying to you. The verifiable figures show both a rapid increase in the volume of availability properties, and a strong decline in the rental prices for them, this year:

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

A property agent or an EA telling lies ..............well I never heard the likes of it 😂😂😂😂😂😂

redarmyblues

"The only two viable options from a business point of view are either suck up the new stricter regulations, drop the rental price and get tenants in who're actually paying. Or else just sell up and get out of the market entirely. Holding the property and keeping it vacant, in the hope of more pro-landlord regulations coming in, is somewhere between naive and idiotic."
@Blut2
LLs will keep it vacant or AirBnB it with a view to a sale when they think the market is right. I believe that none of the properties listed with a sitting tenant sold at the last BidX1 auction. A house like a site are a store of value but ATM a house with a tenant appear to have a value of zero.

JimmyVik

redarmyblues wrote: »

"The only two viable options from a business point of view are either suck up the new stricter regulations, drop the rental price and get tenants in who're actually paying. Or else just sell up and get out of the market entirely. Holding the property and keeping it vacant, in the hope of more pro-landlord regulations coming in, is somewhere between naive and idiotic."
@Blut2
LLs will keep it vacant or AirBnB it with a view to a sale when they think the market is right. I believe that none of the properties listed with a sitting tenant sold at the last Bid1 auction. A house like a site are a store of value but ATM a house with a tenant send to have a value of zero.

I know someone who is keeping one vacant.
HE wants to sell. His wife doesnt.

He is the one who gets all the hassle and deals with tenants.
Now the last tenant has left he wants to sell it but the wife wont let him, so they have agreed to leave it vacant until the new year to see if the landscape gets significantly better for landlords (which it wont and he knows it).
If it doesnt then he wins and they sell up.


They wont get a new tenant in until then, because they could just be stuck with them and never get them out. Also with the covid thing they might decide not to pay rent after they get in. So best sceario for him is leave it empty and then sell when he winds over the wife

The_Conductor

redarmyblues wrote: »

ATM a house with a tenant appear to have a value of zero.

Its not even that it has a value of zero- you can't sell it- because its impossible to finance it, no-one will lend to a buyer when there is a sitting tenant. Whatever about some ignorant landlords (or want-to-be landlords) who aren't sufficiently familiar with the regulatory environment- lenders have the market pegged- and know that its impossible to make *any* business assumptions on the basis of letting residential property.

The market has been destroyed.

Blut2

redarmyblues wrote: »

@Blut2
LLs will keep it vacant or AirBnB it with a view to a sale when they think the market is right. I believe that none of the properties listed with a sitting tenant sold at the last BidX1 auction. A house like a site are a store of value but ATM a house with a tenant appear to have a value of zero.

They won't be airbnbing anything for the foreseeable future now, though. The tourism market is very, very dead and won't be coming back any time before summer 2021 - at best .

And if landlords are waiting for "when they think the market is right" then I'd love to know under what basis they expect the market to go up any time in the near future, given we're now starting into the biggest global recession in a century. They could be waiting 5 years. Which is an awful lot of lost rental income from a vacant property.

JimmyVik's scenario is one that will happen a lot, I think. Landlords may try to leave their properties vacant for a while now to wait for regulatory change in their favour (of which theres no chance) or economic up tick (also no chance). But sooner rather than later they'll be forced to either sell up or reluctantly get back into the rental market.

DubCount

Blut2 wrote: »

They won't be airbnbing anything for the foreseeable future now, though. The tourism market is very, very dead and won't be coming back any time before summer 2021 - at best .

And if landlords are waiting for "when they think the market is right" then I'd love to know under what basis they expect the market to go up any time in the near future, given we're now starting into the biggest global recession in a century. They could be waiting 5 years. Which is an awful lot of lost rental income from a vacant property.

JimmyVik's scenario is one that will happen a lot, I think. Landlords may try to leave their properties vacant for a while now to wait for regulatory change in their favour (of which theres no chance) or economic up tick (also no chance). But sooner rather than later they'll be forced to either sell up or reluctantly get back into the rental market.

There will be very few fools starting new residential lettings unless the regulations change - and they are not going to change. The only new lettings are going to come from big landlords/REITs that can spread their risk across multiple properties.

The sell up option is going to be the dominant tactic. Some may wait the return of Airbnb, most are just going to sell when they can.

Glad I'm not looking for a rental.

JimmyVik

I think AirBNB is already making a comeback.
I looked a while ago at some aribnbs for a week away. There were plenty.
I looked last night and they were all booked out.

eleventh

What regulations are people talking about?
Apart from the covid regulations (which are wrong) what regulations pre-covid would you want changed that would make you stay as a landlord?

Ozark707

JimmyVik wrote: »

I think AirBNB is already making a comeback.
I looked a while ago at some aribnbs for a week away. There were plenty.
I looked last night and they were all booked out.

Also what is interesting is that the amount of available rentals in Dublin has dipped in the last couple of weeks. There does appear to be a pick in up demand (which I would not expected for another month at least).

Blut2

JimmyVik wrote: »

I think AirBNB is already making a comeback.
I looked a while ago at some aribnbs for a week away. There were plenty.
I looked last night and they were all booked out.

Dublin airport as of the middle of this month was only operating at approx 10% of its usual passenger numbers. So while certain localized areas may be doing well from staycationers, as a whole the tourism market in Ireland is really really struggling. And its likely to only struggle more as we hit winter (and any possible further corona surges).

brisan

DubCount wrote: »

There will be very few fools starting new residential lettings unless the regulations change - and they are not going to change. The only new lettings are going to come from big landlords/REITs that can spread their risk across multiple properties.

The sell up option is going to be the dominant tactic. Some may wait the return of Airbnb, most are just going to sell when they can.

Glad I'm not looking for a rental.

Now is the best time in the last few years to be looking for a rental
Highest number of properties available to rent in Dublin in a good while and prices are dropping

Assetbacked

brisan wrote: »

Now is the best time in the last few years to be looking for a rental
Highest number of properties available to rent in Dublin in a good while and prices are dropping

Yes, the last few months and right now is the best time in years to be looking for a rental, this is evidenced in the price drops and numbers of properties available. The direction of travel from here is just speculation but I disagree with the poster saying now is not the time to be looking for a rental. At the moment, I wish I was looking now rather than early next year; it may be even better then but it may be worse.

brisan

JimmyVik wrote: »

I think AirBNB is already making a comeback.
I looked a while ago at some aribnbs for a week away. There were plenty.
I looked last night and they were all booked out.

Air B&B is making a comeback for the summer months with staycations
Dublin will not benefit from this.
Come September and the kids back in school and it will go quiet again

redarmyblues

eleventh wrote: »

What regulations are people talking about?
Apart from the covid regulations (which are wrong) what regulations pre-covid would you want changed that would make you stay as a landlord?

It's not so much the regulations per se it's the way the regulations are being gamed by some tenants and anecdotally at least following the counsel of Threshold. Now LLs are as good at crying as Farmers but nobody can deny the exodus of Mom and Pop landlords from the market. Some of this slack will be taken up by large corporate LLs with multi million Euro estates and woe betide the tenant that Overholds on these people. They will chase errant tenants for every penny and pile interest, legal costs, court costs, baliff costs on top of the arrears so the defaulter may pay multiple times the original debt and skipping off to Poland won't help as long as that country stays in the EU. So when the last of the Mamas and Papas post the keys through the bank door they may turn around and tell the waiting camera "If you think we are bad, wait and see what's coming behind us"

Assetbacked

redarmyblues wrote: »

It's not so much the regulations per se it's the way the regulations are being gamed by some tenants and anecdotally at least following the counsel of Threshold. Now LLs are as good at crying as Farmers but nobody can deny the exodus of Mom and Pop landlords from the market. Some of this slack will be taken up by large corporate LLs with multi million Euro estates and woe betide the tenant that Overholds on these people. They will chase errant tenants for every penny and pile interest, legal costs, court costs, baliff costs on top of the arrears so the defaulter may pay multiple times the original debt and skipping off to Poland won't help as long as that country stays in the EU. So when the last of the Mamas and Papas post the keys through the bank door they may turn around and tell the waiting camera "If you think we are bad, wait and see what's coming behind us"

The insitutitionals won't do that. The reputational damage is not worth it.

eleventh

brisan wrote: »

Now is the best time in the last few years to be looking for a rental
Highest number of properties available to rent in Dublin in a good while and prices are dropping

Might not be great though if landlords exiting in the next while.
I wouldn't want to move somewhere if I couldn't be sure of staying reasonably long-term (2-3 years minimum).

redarmyblues

Assetbacked wrote: »

The insitutitionals won't do that. The reputational damage is not worth it.

They do it now and they will continue to do so, if they didn't they would get the reputation for being an easy touch.

They might not be an easy touch for the state, which has retrospectively alerted the terms of contacts that are almost entirely based on statue in favour of those on one side of those agreements, not a good look for a country almost entirely reliant on the kindness of strangers for it's wealth and possibly an expensive one too

Varik

Assetbacked wrote: »

The insitutitionals won't do that. The reputational damage is not worth it.

Which would amount to what.

eleventh

redarmyblues wrote:

It's not so much the regulations per se it's the way the regulations are being gamed by some tenants and anecdotally at least following the counsel of Threshold. Now LLs are as good at crying as Farmers but nobody can deny the exodus of Mom and Pop landlords from the market. Some of this slack will be taken up by large corporate LLs with multi million Euro estates and woe betide the tenant that Overholds on these people. They will chase errant tenants for every penny and pile interest, legal costs, court costs, baliff costs on top of the arrears so the defaulter may pay multiple times the original debt and skipping off to Poland won't help as long as that country stays in the EU. So when the last of the Mamas and Papas post the keys through the bank door they may turn around and tell the waiting camera "If you think we are bad, wait and see what's coming behind us"

It's a tiny minority that would overhold. I don't know if regulations would change that (without impacting protections for good tenants).
It's up to the landlord who they let in. They have complete freedom of choice. If you let to someone for example without checking that they're a citizen/normally resident in the country you could be asking for trouble.

Smouse156

redarmyblues wrote: »

It's not so much the regulations per se it's the way the regulations are being gamed by some tenants and anecdotally at least following the counsel of Threshold. Now LLs are as good at crying as Farmers but nobody can deny the exodus of Mom and Pop landlords from the market. Some of this slack will be taken up by large corporate LLs with multi million Euro estates and woe betide the tenant that Overholds on these people. They will chase errant tenants for every penny and pile interest, legal costs, court costs, baliff costs on top of the arrears so the defaulter may pay multiple times the original debt and skipping off to Poland won't help as long as that country stays in the EU. So when the last of the Mamas and Papas post the keys through the bank door they may turn around and tell the waiting camera "If you think we are bad, wait and see what's coming behind us"

Chasing, interest and legal costs for what? A judgement that isn’t even worth the paper it’s written. Renters have no wealth, there is nothing to take and I’m sure they’ve learned it’s not worth the bother for the slim slim chance of recovery! More likely they have some debt collector just hassle them for a while then go away

JimmyVik

Blut2 wrote: »

Dublin airport as of the middle of this month was only operating at approx 10% of its usual passenger numbers. So while certain localized areas may be doing well from staycationers, as a whole the tourism market in Ireland is really really struggling. And its likely to only struggle more as we hit winter (and any possible further corona surges).

I dont think the accommodation section of tourism is struggling at the moment though. Well maybe hotels who have priced through the roof might get a landing.

JimmyVik

Ozark707 wrote: »

Also what is interesting is that the amount of available rentals in Dublin has dipped in the last couple of weeks. There does appear to be a pick in up demand (which I would not expected for another month at least).

I wonder are the council and the reits hoovering them up on the quiet.
I know a reit has been sending everyone letters in a couple of complexes asking to sell to them. And the council before covid were actively answering ads and offering to LTL apartments. The new housing minister wants to kick that into high gear now too. Maybe they have started

JimmyVik

brisan wrote: »

Air B&B is making a comeback for the summer months with staycations
Dublin will not benefit from this.
Come September and the kids back in school and it will go quiet again

I was looking for weekends in September and October.

brisan

JimmyVik wrote: »

I was looking for weekends in September and October.

A random check for kilkenny for Sept 18-20 for 2 people gave 63 results

https://www.airbnb.com/s/Kilkenny/homes?tab_id=home_tab&refinement_paths%5B%5D=%2Fhomes&query=Kilkenny&place_id=ChIJq8UjNKEwXUgRwHMxl6nHAAo&checkin=2020-09-18&checkout=2020-09-20&source=structured_search_input_header&search_type=search_query&adults=2

Blut2

JimmyVik wrote: »

I dont think the accommodation section of tourism is struggling at the moment though. Well maybe hotels who have priced through the roof might get a landing.

When tourist numbers are down 90% you can bet the accommodation section of tourism is struggling. The vast, vast majority of hotel stays in this country are foreign tourists every year.



You can essentially write off almost all of the figures for overseas tourism revenue from each of those figures for this year...

As of 2019 we had 224,000 bed spaces in Ireland in the tourism industry, so even a massive increase in staycationers wouldn't fill them, unfortunately. That would require fully 5% of the Irish population to be staying in a hotel every night of the week.

PommieBast

eleventh wrote: »

It's a tiny minority that would overhold. I don't know if regulations would change that (without impacting protections for good tenants).
It's up to the landlord who they let in. They have complete freedom of choice. If you let to someone for example without checking that they're a citizen/normally resident in the country you could be asking for trouble.

In the past it was Rent Allowance Not Accepted and being required to supply a company reference. I don't think either is permitted these days.