Dublin - Significant reduction in rents coming?

Smouse156

Assetbacked wrote: »

https://www.daft.ie/report

No Q2 rental report from Daft. Very odd. I wonder if our anecdotal evidence was reflected in the data and if it has maybe terrified Daft's backers and those upon whom it relies for revenue. I've emailed to ask them when it will be available so perhaps I can take off my tinfoil hat until they reply.

I'm shocked at home many properties are available on Daft right now in Dublin, demand must have collapsed entirely.

It’s a report based on ASKING prices only. Usually Asking prices are meaningless. Given the jump in supply, the regulatory rules it’s hard to believe that real rents have not fallen. I’m sure during Covid many were negotiated down given the jump in supply and the mass exodus out of Dublin. I’d say it’s also highly likely many sweeteners (one month free etc) have been included but not advertised due to the regulatory rules.

In the rest of the country, however, the tight supply & complete lack of construction probably did keep rents high and maybe even higher if people left Dublin to move “down the country”.

Assetbacked

The thing about asking prices for rents is that unlike sale asking prices, they are almost certainly not going to go for over the asking so if anything the rental asking prices are conservative, on the higher end.

beauf

Assetbacked wrote: »

...
I'm shocked at home many properties are available on Daft right now in Dublin, demand must have collapsed entirely.

There's an opportunity there for someone to negotiate free rent as a caretaker so the property doesn't fall into neglect then sublet.

There's probably a secret committee of govt officials, all landlords, and Daft's backers, burning the midnight oil, drafting legislation to prevent this as we speak.

beauf

Assetbacked wrote: »

The thing about asking prices for rents is that unlike sale asking prices, they are almost certainly not going to go for over the asking so if anything the rental asking prices are conservative, on the higher end.

If the asking prices are a fantasy and the daft results are a fantasy then you might be better waiting for the RTB reports. No bias there.

Hubertj

Assetbacked wrote: »

https://www.daft.ie/report

No Q2 rental report from Daft. Very odd. I wonder if our anecdotal evidence was reflected in the data and if it has maybe terrified Daft's backers and those upon whom it relies for revenue. I've emailed to ask them when it will be available so perhaps I can take off my tinfoil hat until they reply.

I'm shocked at home many properties are available on Daft right now in Dublin, demand must have collapsed entirely.

I would think in a city the size of Dublin there has to be a % of units available at all times to have a functioning market. I think another indicator wouLd be how long a unit is advertised for before it is rented.

PommieBast

Assetbacked wrote: »

No Q2 rental report from Daft. Very odd. I wonder if our anecdotal evidence was reflected in the data and if it has maybe terrified Daft's backers and those upon whom it relies for revenue.

Would not surprise me. A while back I noticed that if you ask Daft to sort rental listings by price, you basically got a fictitious ordering flooded with blatantly sponsored entries, most of which were either student accommodation or Spender Dock developments. Very different from using map view and zooming into an area such as the GPO..

I'm shocked at home many properties are available on Daft right now in Dublin, demand must have collapsed entirely.

Right in the city centre it has. As I have said in the past with night-life gone, companies doing WFH, parking actually getting worse due to anti-car policies, etc etc, who is going to pay a premium to be around this area...

Hubertj wrote: »

I would think in a city the size of Dublin there has to be a % of units available at all times to have a functioning market. I think another indicator wouLd be how long a unit is advertised for before it is rented.

I've seen quite a few units nearby that were listed back in May & June. Says it all..

Smouse156

beauf wrote: »

If the asking prices are a fantasy and the daft results are a fantasy then you might be better waiting for the RTB reports. No bias there.

I think in normal circumstances asking prices would be close, however, given the RTB rules, the huge jump in supply and the mass exodus out of Dublin its completely unbelievable to think rents haven’t dropped at all. Therefore all we can really believe is the RTB report

beauf

Smouse156 wrote: »

I think in normal circumstances asking prices would be close, however, given the RTB rules, the huge jump in supply and the mass exodus out of Dublin its completely unbelievable to think rents haven’t dropped at all. Therefore all we can really believe is the RTB report

Perhaps if rents haven't fallen off a cliff as you're expecting. Then perhaps your other assertions, are not correct or at least not in the same scale, or significant as you think they are.

Have you looked up how long rents took to reach their lowest point after the last crash?

rightmove

beauf wrote: »

Have you looked up how long rents took to reach their lowest point after the last crash?

True ...But.. this time the meddling of the RPZ's will skew the results. e.g. LL taking rent and giving rebates to keep the rent price up to avoid getting caught below market. As in the market that is now below itself but just not visible

They really messed this one up in the last government.

Assetbacked

Tinfoil hat in the bin for now (though I am scepitcal as to why they ditched the very informative rental report for the combined "housing report").

This is the Q1 2020 rental report; https://www.daft.ie/report/2020-Q1-rental-daftreport.pdf
This is the most recent "housing" report, which includes rental information and only started in May this year (before it was the "house price" report); https://www.daft.ie/report/2020-july-housingmarket-daftreport.pdf

I'm quoting myself from the other week where I commented on the rental disclosures in the housing report that they are "a bit pointless beyond that for rental information as it just talks of averages rather than splitting it between different properties and areas." Unfortunately, the extra detail in the rental report won't appear any more it seems, which is disappointing as it was very detailed and informative, including details on yields from rents and comparisons between rents and mortgages.

JimmyVik

rightmove wrote: »

True ...But.. this time the meddling of the RPZ's will skew the results. e.g. LL taking rent and giving rebates to keep the rent price up to avoid getting caught below market. As in the market that is now below itself but just not visible

They really messed this one up in the last government.

Never thought of that. I wonder how many will be doing that.

GocRh

PPSN number allocations provide an interesting insight into the number of people moving to Ireland, people who would normally rent.

From January to June 2020, 36644 PPSNs were allocated to non-nationals.
Compare that to the same period in 2019, when 59773 PPSNs were allocated to non-nationals.

That's a decrease of almost 40%, and does not account for people that have left Ireland.
PPSNs are being issued by post, so I'd reckon delays are not influencing the numbers.

It seems inevitable that demand for rental accommodation will drop, perhaps significantly, especially in areas that rely heavily on foreign workers and students.

What are your thoughts?

beauf

Where did you get theses figures?

I'm curious how you know all these people pay rent.

However assuming your theory is correct and there are 37k extra people now in the country since Dec 2020 how does an increase reduce demand for housing.

If we housed everyone last year and had made available the same amount of housing this year then perhaps we would have over supply. But we didn't. Haven't done for decades.

What you need is a net population decrease. I think last year we had a net 50k increase. This year will be very different as people can't travel. But last I looked there was an increase in Irish people coming home this year.

beauf

JimmyVik wrote: »

Never thought of that. I wonder how many will be doing that.

Be interesting how they declare it for tax too. Do they not declare it. Do they declare more than they actually make. Do the revenue and PRB cross check. Will revenue audit them.

GocRh

beauf wrote: »

Where did you get theses figures?

I'm curious how you know all these people pay rent.

However assuming your theory is correct and there are 37k extra people now in the country since Dec 2020 how does an increase reduce demand for housing.

If we housed everyone last year and had made available the same amount of housing this year then perhaps we would have over supply. But we didn't. Haven't done for decades.

What you need is a net population decrease. I think last year we had a net 50k increase. This year will be very different as people can't travel. But last I looked there was an increase in Irish people coming home this year.

https://www.gov.ie/en/collection/a78027-statistics-on-personal-public-service-pps-numbers-issued/

I'm not claiming all these people pay rent. But many will. You can't get a mortgage in Ireland if you haven't been employed in the country for at least 6 months, and that was pre-covid, so the vast majority will have no option other than renting.

Until we have the net population numbers from the CSO it won't be possible to see the complete picture... But no one can deny that immigration plays a significant role and that number has gone down significantly.

Do you have any sources for your claim that more Irish people are coming home?
Australia won't even let people leave the country.

beauf

https://www.cso.ie/en/csolatestnews/pressreleases/2020pressreleases/pressstatementpopulationandmigrationestimatesapril2020/#:~:text=The%20Central%20Statistics%20Office%20(CSO,Migration%20Estimates%20for%20April%202020.&text=The%20number%20of%20immigrants%20to,period%20is%20estimated%20at%2056%2C500.

This is the last 12 months. You won't know the true pattern of Covid impact for another while yet..

beauf

GocRh wrote: »

https://www.gov.ie/en/collection/a78027-statistics-on-personal-public-service-pps-numbers-issued/

I'm not claiming all these people pay rent. But many will. You can't get a mortgage in Ireland if you haven't been employed in the country for at least 6 months, and that was pre-covid, so the vast majority will have no option other than renting.

...

What about that 37k extra people. How is that reducing rents?...

Hubertj

GocRh wrote: »

PPSN number allocations provide an interesting insight into the number of people moving to Ireland, people who would normally rent.

From January to June 2020, 36644 PPSNs were allocated to non-nationals.
Compare that to the same period in 2019, when 59773 PPSNs were allocated to non-nationals.

That's a decrease of almost 40%, and does not account for people that have left Ireland.
PPSNs are being issued by post, so I'd reckon delays are not influencing the numbers.

It seems inevitable that demand for rental accommodation will drop, perhaps significantly, especially in areas that rely heavily on foreign workers and students.

What are your thoughts?

1 challenge is that visas were not being processed for a number of months. Added to that, travel restrictions and quarantine etc made it difficult to get here. IN my company, we have 100+ visa applications outstanding

GocRh

beauf wrote: »

What about that 37k extra people. How is that reducing rents?...

As per CSO estimates until April posted above ... The overall trend seems to be a reduction, 14% up until April which only includes 1 month or so of travel restrictions...

The number of immigrants to the State in the year to April 2020 is estimated to be 85,400, while the number of emigrants from the State over the same period is estimated at 56,500. These flows resulted in net inward migration for Ireland in the year to April 2020 of 28,900, a reduction of 4,800 (-14.2%) on the previous year.

GocRh

Hubertj wrote: »

1 challenge is that visas were not being processed for a number of months. Added to that, travel restrictions and quarantine etc made it difficult to get here. IN my company, we have 100+ visa applications outstanding

My employer has put on hold hiring from abroad (non-EU). Offers were also withdrawn due to work permit and visa delays, we simply couldn't wait and have made other arrangements.

How long do you think employers in general will wait? I've heard from colleagues in the industry (IT) that relocations were being swapped for permanent remote work.

beauf

GocRh wrote: »

As per CSO estimates until April posted above ... The overall trend seems to be a reduction, 14% up until April which only includes 1 month or so of travel restrictions...

The number of immigrants to the State in the year to April 2020 is estimated to be 85,400, while the number of emigrants from the State over the same period is estimated at 56,500. These flows resulted in net inward migration for Ireland in the year to April 2020 of 28,900, a reduction of 4,800 (-14.2%) on the previous year.

You're reading a reduction in rate as a reduction. It's actually still an increase no? It's been an increase for what a decade or more?

beauf

GocRh wrote: »

My employer has put on hold hiring from abroad (non-EU). Offers were also withdrawn due to work permit and visa delays, we simply couldn't wait and have made other arrangements.

How long do you think employers in general will wait? I've heard from colleagues in the industry (IT) that relocations were being swapped for permanent remote work.

Depending what country they are working from it could have major tax implications if outside EU. It's not as simple as move to the Caribbean and work from there.

GocRh

beauf wrote: »

You're reading a reduction in rate as a reduction. It's actually still an increase no? It's been an increase for what a decade or more?

It takes pressure off the market.
How hard is that to understand?
Basic supply and demand. Supply will remain flat or go up (airbnbs going to rental market). Demand will lower.
Basic economics.

GocRh

beauf wrote: »

Depending what country they are working from it could have major tax implications if outside EU. It's not as simple as move to the Caribbean and work from there.

I'm not talking about people leaving Ireland to work remotely, but new positions in Ireland being converted to remote work.

beauf

GocRh wrote: »

I'm not talking about people leaving Ireland to work remotely, but new positions in Ireland being converted to remote work.

There's still tax implications.

https://www.revenue.ie/en/employing-people/what-constitutes-pay/irish-employment-carried-on-outside-the-State/index.aspx

beauf

beauf wrote: »

There's still tax implications.

https://www.revenue.ie/en/employing-people/what-constitutes-pay/irish-employment-carried-on-outside-the-State/index.aspx

Only if you tell your employer. We are not back to the office until June next year and I’m planning spending January working in Valencia, found a beautiful Airbnb. Maybe if it’s great I might stay longer. And don’t intend telling my US line management or HR

Jizique

[Deleted User] wrote: »

Only if you tell your employer. We are not back to the office until June next year and I’m planning spending January working in Valencia, found a beautiful Airbnb. Maybe if it’s great I might stay longer. And don’t intend telling my US line management or HR

I am sure they will know

Jizique

Jizique wrote: »

I am sure they will know

Is it tinfoil hat time?

beauf

[Deleted User] wrote: »

Only if you tell your employer. We are not back to the office until June next year and I’m planning spending January working in Valencia, found a beautiful Airbnb. Maybe if it’s great I might stay longer. And don’t intend telling my US line management or HR

You're still paying Irish Tax and it's only small period of time. That's entirely different.

GocRh

beauf wrote: »

There's still tax implications.

https://www.revenue.ie/en/employing-people/what-constitutes-pay/irish-employment-carried-on-outside-the-State/index.aspx

Only if the employer does not have local representation. Hiring through a local agency also very common in IT.
My employer (Irish IT company) hires through agents in several countries where it doesn't make sense to open a local operation. Perfectly legal and does not expose the Irish entity to any liability.