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Dublin - Significant reduction in rents coming?

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    #1202
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Beigepaint wrote: »
    I think Trump and Brexit prove that an electorate will proudly vote for something that sounds nice, even if eggheads like you and me produce data that says it’s not achievable.

    Brexit and Trump are populism as the unrestrained hyper growth at all costs capitalism of the recent decades has come at a significant cost to those that don't own assets. They are protest votes and only the tip of the iceberg if things do not change, namely cheaper housing for those that need it. Fascism is a gradual process and the next Trump or Brexit will push the boundaries a bit more until we wake up to a horribly closed minded society, perhaps even ending up with a devastating war. That being said, global warming may be the catastrophe that results before we get that far.

    Moral of the story, populism will thrive in an environment where housing is unaffordable.


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    #1203
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    Assetbacked wrote: »
    . .. namely cheaper housing for those that need it. ....populism will thrive in an environment where housing is unaffordable.

    Who will pay for this cheaper housing?


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    #1204
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Beigepaint wrote: »
    SF almost got a majority in the last election, despite the violent past, because FF/FG gifted it to them with recent housing policy.

    Sinn Féin got 24% of the first preference votes in the last election and were very poor with vote transfers from other candidates.

    Almost 39% of the eligible electorate did not bother to vote.

    The Sinn Féin vote represented less than 15% of the Irish electorate.

    Please stick with facts.


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    #1205
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    So where are we with rents. Have they fallen massively as people were hoping...? I haven't been following this...


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    #1206
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    beauf wrote: »
    Who will pay for this cheaper housing?

    They'll just print money of course........ (bangs head off table in frustration).
    I've tried to ask this exact question to several activists in the Politics forum- and they all seem to imagine there is a magic money tree- just because........

    Seriously- don't even ask, its an exercise in frustration.


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    #1207
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    beauf wrote: »
    So where are we with rents. Have they fallen massively as people were hoping...? I haven't been following this...

    Supply has risen- probably tripled- but to still incredibly low levels- so while there were circa 950 vacancies to let in Jan 2020 now there are circa 3,000 vacant units to let.

    Anything in good areas or advertised at a favourable rent- still has queues out the door.

    So- there have been some falls- as supply has increased- however, even the increase in supply is still to very low levels (the sort of levels that its hard to argue does not point to ongoing supplyside constraints).

    Of interest- 5th Jan 2020- when final restrictions on tenancies ending due to receipt of Covid payments comes in. There are circa 8k Irish after having home who were property owners who let out their family homes- and want it back, please and thankyou- and plan on bringing the rest of their families home when they actually have their dwellings back. This will more than bankrupt the limited supply that has been hitting the market.

    In addition- the official statistics show an expected immigration rate from non-nationals into Ireland as a consistent 8k family units for the foreseeable future (whether this comes to pass or not, remains to be seen).

    The only supply coming into the rental sector is expensive units from the REITs who aren't interested in housing plebs like you or me- they want the affluent young professionals with plentiful cash to splash. I know I'm not in that cohort.

    So- in short- and despite an apparent increase supplyside- it would seem that constraints continue to be the order of the day in the rental sector.


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    #1208
    GocRh
    Registered Users Posts: 252 ✭✭GocRh


    The_Conductor wrote: »
    The only supply coming into the rental sector is expensive units from the REITs who aren't interested in housing plebs like you or me- they want the affluent young professionals with plentiful cash to splash. I know I'm not in that cohort.

    Even well paid young professionals in IT can't afford the rents being sought by REITs on their own. They're either sharing or spending well over 45% of their take home pay on rent.
    I know young IT professionals making over 70k per year, no kids or expensive habits, that have to share an apartment to be able to live near the city centre.


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    #1209
    Blut2
    Registered Users Posts: 3,013 ✭✭✭Blut2


    The_Conductor wrote: »
    The only supply coming into the rental sector is expensive units from the REITs who aren't interested in housing plebs like you or me- they want the affluent young professionals with plentiful cash to splash. I know I'm not in that cohort.

    So- in short- and despite an apparent increase supplyside- it would seem that constraints continue to be the order of the day in the rental sector.

    This isn't true though. For example UCD alone are mid-way through (and continuing) with a €500mn development to add 3000 extra bedrooms to their on campus residencies. They've already built 900 coming online for September 2020, and the rest are due completed at various stages over the next 24 months.

    That by itself will take 3000 students out of the Dublin rental market. That will free up a lot of apartments, houses etc in South Dublin - and not high end ones. Students aren't exactly affluent young professionals with plentiful cash to splash.

    And thats just one development, in one university.


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    #1210
    L1011
    Registered Users Posts: 68,760 ✭✭✭✭L1011


    Beigepaint wrote: »
    I’m also 31 and I agree with assetbacked.

    Non-rich people in our age group know that if we want to buy a house it is swimming against the tide of FG/FF property inflation policies.

    I have good reason to be anti-SF but there’s a part of me that says “f*ck it, I need a house, SF will put in place policies to build more houses”.

    SF almost got a majority in the last election, despite the violent past, because FF/FG gifted it to them with recent housing policy.

    A quarter of the vote is nowhere near a majority, although the way it was spun could convince some


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    #1211
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    beauf wrote: »
    Who will pay for this cheaper housing?

    Maybe the billions spent on private rental assistance schemes? Borrow to build and stimulate building now and use the savings on rental assistance schemes to pay it back. It would be a post-pandemic economic boost too. Win win for politicians!

    I wouldn't underestimate the institutional investor lobby however, it is in their interest to keep rental yields high which means, among other things, RPZ exemptions for new builds, no tax on rental income, 4% increases in returns guaranteed per annum, encouraging the State to take on long term leases on their apartments and suppression of FTBs to keep them renting. Institutional investors are in direct competition with private LLs and attempt to water down that Ireland is a country of home ownership which we need to remember when they raise supposed solutions to the housing crisis.


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    #1212
    Yellow_Fern
    Registered Users Posts: 2,600 ✭✭✭Yellow_Fern


    Assetbacked wrote: »
    Maybe the billions spent on private rental assistance schemes? Borrow to build and stimulate building now and use the savings on rental assistance schemes to pay it back. It would be a post-pandemic economic boost too. Win win for politicians!
    Rental assistence schemes are vastly cheaper than building an entire house. I havent done the maths but I am guessing maybe 30 or so times cheaper. We are already borrowing a lot. There is a limit to how much we can burrow.

    Assetbacked wrote: »
    I wouldn't underestimate the institutional investor lobby however, it is in their interest to keep rental yields high which means, among other things, RPZ exemptions for new builds, no tax on rental income
    New builds are not exempt. These buildings are just new so they have no history. If you force new builds to be rented for a certain affordable price who will build new houses ( these developers also pay for a huge amount of social housing). The rent that they take is cash flow. Cash flow is not taxed.
    Assetbacked wrote: »
    4% increases in returns guaranteed per annum, encouraging the State to take on long term leases on their apartments and suppression of FTBs to keep them renting. Institutional investors are in direct competition with private LLs and attempt to water down that Ireland is a country of home ownership which we need to remember when they raise supposed solutions to the housing crisis.
    They are not in direct competition. They are buying huge blocks. There is no profit for a builder to build flats and sell for 300k.
    Beigepaint wrote: »
    I have good reason to be anti-SF but there’s a part of me that says “f*ck it, I need a house, SF will put in place policies to build more houses”.

    SF almost got a majority in the last election, despite the violent past, because FF/FG gifted it to them with recent housing policy.
    The academic evidence would suggest that SF policies will increase the price of rent but yeah indeed many do share your views.


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    #1213
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Yellow_Fern wrote: »
    New builds are not exempt. These buildings are just new so they have no history. If you force new builds to be rented for a certain affordable price who will build new houses ( these developers also pay for a huge amount of social housing). The rent that they take is cash flow. Cash flow is not taxed.

    The rental market is very frothy, to claim no one will build because they can't make more money than they can make now is nonsense, absolute bull. To say otherwise is to say that the current returns aren't good.

    On the cash flow point, again, an individual landlord gets rent in the same way but he cannot claim it is cash flow and avail of tax exemptions. It is an unfair advantage afforded to REITs. REITs have non-Irish shareholders in the vast majority of cases so that cash is sucked out of the Irish economy with no exit tax, REITs literally bleed the economy dry. They do not need such fantastic tax advantages as there are still gains to be made.
    Yellow_Fern wrote: »
    They are not in direct competition. They are buying huge blocks. There is no profit for a builder to build flats and sell for 300k.


    The academic evidence would suggest that SF policies will increase the price of rent but yeah indeed many do share your views.

    It's not my view that SF are the solution, it's my view that I understand why people would go with SF as FF destroyed the economy and FG oversaw the housing crisis, two pretty devastating things that disproportionately affect younger people.

    Of course they are in direct competition, if it is not viable to sell for 300k then the government needs to allow individuals greater leverage to access the apartments the REITs are buying with less legislative restrictions around the builds or with grants to builders for selling to individuals, things like that.


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    #1214
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    FG inherited the housing crisis, but they did nothing about it. Same with other problems.


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    #1215
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    beauf wrote: »
    FG inherited the housing crisis, but they did nothing about it. Same with other problems.

    Yeah, that's why I used the term "oversaw" rather than "caused" with them.


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    #1216
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    Assetbacked wrote: »
    Yeah, that's why I used the term "oversaw" rather than "caused" with them.

    That implies they oversaw the entirety of it. They didn't. Tbh all the opposition parties said very little as it all happened also. There's no party that can't be accused of fiddling as Rome burned when it comes to housing.

    But most of the people complaining on boards about the issues with housing, championed and cheered for changes that have made it worse. They keep sawing at the branch they are standing on.

    Iceberg ahead... More speed is the cry.


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    #1217
    Mic 1972
    Registered Users Posts: 3,213 ✭✭✭Mic 1972


    ExMachina1000 wrote: »
    From the data available its clear that there wont be any significant drop in Dublin rental prices.
    Increases at a continuous rate are more likely


    I rent rooms in my house and i noticed a significant reduction in demand.

    Up until a year ago i would have people queuing at the door, now i get an email once every couple of days for a double room with ensuit


    There are definitely less people looking for accommodation right now, this can only lead to rent reduction


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    #1218
    cameramonkey
    Closed Accounts Posts: 3,220 ✭✭✭cameramonkey


    Mic 1972 wrote: »
    I rent rooms in my house and i noticed a significant reduction in demand.

    Up until a year ago i would have people queuing at the door, now i get an email once every couple of days for a double room with ensuit


    There are definitely less people looking for accommodation right now, this can only lead to rent reduction


    I think it is only a matter of time before rents start to fall if they have not already. The supply and demand factor is the driving force for price. So more supply, less demand means that rent should fall. I think in the short term many landlords will try hold out for the rent they would have got in the boom times but eventually reality will coming calling.


    It is admirable that you are straight talking about your situation and good luck with getting tenants.


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    #1219
    DubCount
    Registered Users Posts: 1,089 ✭✭✭DubCount


    https://www.breakingnews.ie/ireland/rents-continue-to-rise-despite-covid-19-impact-1014579.html

    Interesting article this. One of the reasons given for failure of rents to fall is RPZs. Populism continues to overrule genuine public interest.


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    #1220
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    cameramonkey wrote: »
    .... So more supply, less demand means that rent should fall. I think in the short term many landlords will try hold out for the rent they would have got in the boom times but eventually reality will coming calling....

    Supply means different things to different people. If you are willing to pay for it, there has never been a problem with supply. The problem with supply is with affordable and social housing. Have we a backlog of demand and have dramatically the supply of social and affordable housing relative to demand?

    If you have one apple to sell and 100 potential customers. If demand falls 80% you still have 20 potential customers for that one apple.

    This thread is 4 months old. Wheres the progress.


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    #1221
    Blut2
    Registered Users Posts: 3,013 ✭✭✭Blut2


    beauf wrote: »
    This thread is 4 months old. Wheres the progress.


    https://www.boards.ie/vbulletin/showpost.php?p=114342122&postcount=1155


    A 20% drop in rents in the last 6 months would seem like fairly significant progress to me.


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    #1222
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    So which political party will claim credit for this?


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    #1223
    landofthetree
    Registered Users Posts: 2,345 ✭✭✭landofthetree


    Assetbacked wrote: »
    Maybe the billions spent on private rental assistance schemes? Borrow to build and stimulate building now and use the savings on rental assistance schemes to pay it back. It would be a post-pandemic economic boost too. Win win for politicians!

    I wouldn't underestimate the institutional investor lobby however, it is in their interest to keep rental yields high which means, among other things, RPZ exemptions for new builds, no tax on rental income, 4% increases in returns guaranteed per annum, encouraging the State to take on long term leases on their apartments and suppression of FTBs to keep them renting. Institutional investors are in direct competition with private LLs and attempt to water down that Ireland is a country of home ownership which we need to remember when they raise supposed solutions to the housing crisis.

    If the state owns the property it has to pay for their maintenance.

    This is why FG are taking the cheaper option of long term lease.


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    #1224
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    landofthetree wrote: »
    If the state owns the property it has to pay for their maintenance.

    This is why FG are taking the cheaper option of long term lease.

    thats the question i have been asking!! how much to maintain on an annual basis. How many additional civil/public servants to administer. How much waste when maintainance contracts are tendered?


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    #1225
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    Blut2 wrote: »
    https://www.boards.ie/vbulletin/showpost.php?p=114342122&postcount=1155


    A 20% drop in rents in the last 6 months would seem like fairly significant progress to me.

    why is this so different then?

    https://www.breakingnews.ie/ireland/rents-continue-to-rise-despite-covid-19-impact-1014579.html


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    #1226
    tenet
    Registered Users Posts: 3 ✭tenet


    landofthetree wrote: »
    If the state owns the property it has to pay for their maintenance.

    This is why FG are taking the cheaper option of long term lease.

    LLs don't get any allowance for there time, doing admin or managing and then there is the billions that go back in taxes win win until the bubble bursts with fewer LLs and supply hope there's a plan for that one


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    #1227
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,078 Mod ✭✭✭✭AlmightyCushion


    landofthetree wrote: »
    If the state owns the property it has to pay for their maintenance.

    This is why FG are taking the cheaper option of long term lease.

    It's not. It's because the state wasn't able to borrow billions to build social housing due to EU rules. Signing long term leases comes out of day to day spending and doesn't require the local authority to borrow money up front to build the houses even if it costs more money in the long term.


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    #1228
    beauf
    Closed Accounts Posts: 22,649 ✭✭✭✭beauf


    AlmightyCushion wrote: »
    It's not. It's because the state wasn't able to borrow billions to build social housing due to EU rules. Signing long term leases comes out of day to day spending and doesn't require the local authority to borrow money up front to build the houses even if it costs more money in the long term.

    Did the rules change in the 70s and 80s or something?


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    #1229
    landofthetree
    Registered Users Posts: 2,345 ✭✭✭landofthetree


    Hubertj wrote: »
    thats the question i have been asking!! how much to maintain on an annual basis. How many additional civil/public servants to administer. How much waste when maintainance contracts are tendered?
    https://www.google.com/amp/s/www.irishtimes.com/news/social-affairs/council-renovated-one-sandycove-home-at-cost-of-over-200-000-1.3805933%3fmode=amp

    I will have to do future research to back up my claim. But it is pretty expensive to maintain property. Think about it. Just look at where you live. Be it rented or your own just think how much work goes into over the years.


    DCC spent more than €200,000 refurbishing one void housing unit in Sandycove last year.

    The council spent in excess of €600,000 doing up five units in 2018, which also included one property in Sallynoggin (€119,447) and three units in Ballyogan (€262, 913).

    https://www.google.com/amp/s/www.irishtimes.com/news/social-affairs/council-renovated-one-sandycove-home-at-cost-of-over-200-000-1.3805933%3fmode=amp


    Also I've heard that if a new tenant comes into a council house they have to get all new furniture and electrical goods.


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    #1230
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,078 Mod ✭✭✭✭AlmightyCushion


    beauf wrote: »
    Did the rules change in the 70s and 80s or something?

    It's in the stability and growth pact. Can't remember when it came in but it was well after the 80s.


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    #1231
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,078 Mod ✭✭✭✭AlmightyCushion


    landofthetree wrote: »
    https://www.google.com/amp/s/www.irishtimes.com/news/social-affairs/council-renovated-one-sandycove-home-at-cost-of-over-200-000-1.3805933%3fmode=amp

    I will have to do future research to back up my claim. But it is pretty expensive to maintain property. Think about it. Just look at where you live. Be it rented or your own just think how much work goes into over the years.


    DCC spent more than €200,000 refurbishing one void housing unit in Sandycove last year.

    The council spent in excess of €600,000 doing up five units in 2018, which also included one property in Sallynoggin (€119,447) and three units in Ballyogan (€262, 913).

    https://www.google.com/amp/s/www.irishtimes.com/news/social-affairs/council-renovated-one-sandycove-home-at-cost-of-over-200-000-1.3805933%3fmode=amp


    Also I've heard that if a new tenant comes into a council house they have to get all new furniture and electrical goods.

    For these long term lease schemes, the council covers maintenance. They would also cover furniture and electrical goods.


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