Dublin - Significant reduction in rents coming?

The_Conductor

Leozord wrote: »

and if you rent a room to a tenant who is receiving HAP, are you also entitled to get a mortgage interest relief as well?

Mortgage interest relief is wholly separate and has nothing whatsoever to do with the rent-a-room scheme.

You have no allowances (whatsoever) associated with the rent-a-room scheme- and likewise, partaking in the scheme does not impact on any other reliefs or allowances you might be entitled (other than means based payments- for which the 14k is a calculable means).

Assetbacked

Eric Cartman wrote: »

exactly this. In the US its quite common to rent 1000sq ft of basically open space and make it your own, when youre done you have to put it back to how you found it , the city inspector verifies all the electrical, plumbing and construction is up to code and thats all that needed.

here If your landlord doesn't give you a 4 ring hob people go mad and they all complain that landlords put in cheap furniture but heavens forbid you brought your own.

To be fair, it does go both ways in Ireland. Wanting to make even minor changes to your home requires consent of the landlord like changing the curtains or painting a room.

beauf

Assetbacked wrote: »

To be fair, it does go both ways in Ireland. Wanting to make even minor changes to your home requires consent of the landlord like changing the curtains or painting a room.

Thats because none of it is regulated or inspected.

beauf

brisan wrote: »

The original post I replied to said the exact opposite
It was the stringent regulations that stopped offices shops being converted to housing due to the high cost of complying with those regulations

It increases the costs.

But its also not checked or inspected for the most part.
So its often, even usually, executed badly.

So you get the cost but not the full benefit of it.

Mr Hindley

FWIW, as someone who's been casually monitoring the rental market in South Dublin for the last few months and is now watching more closely, the last week feels like a tipping point in terms of asking prices. I'm suddenly seeing a lot more properties appearing in my price range. As an example (although still too rich for my blood), here's a nice 2-bed house in central Dalkey for 2k a month, which I don't think I would have seen even a couple of weeks back:

https://www.daft.ie/dublin/houses-for-rent/dalkey/dalkey-avenue-67-dalkey-dublin-2068794/

I don't have hard evidence to back it up, but it feels like we've gone from 'the dumps are having to drop their prices sharply, everyone else is keeping their official asking prices the same', to 'more and more of even the good places are recognising they need to drop at least a bit, to beat the competition'. A lot of the newly added places seem to be being rented out directly by the owner (or maybe even sublet?), rather than via an estate agent.

I wonder how many of these may fail to shift as rentals and eventually get put onto the market for sale instead in a few months time. I could imagine a glut of apartments for sale over the next 6-9 months, unfortunately for their owners.

brisan

Mr Hindley wrote: »

FWIW, as someone who's been casually monitoring the rental market in South Dublin for the last few months and is now watching more closely, the last week feels like a tipping point in terms of asking prices. I'm suddenly seeing a lot more properties appearing in my price range. As an example (although still too rich for my blood), here's a nice 2-bed house in central Dalkey for 2k a month, which I don't think I would have seen even a couple of weeks back:

https://www.daft.ie/dublin/houses-for-rent/dalkey/dalkey-avenue-67-dalkey-dublin-2068794/

I don't have hard evidence to back it up, but it feels like we've gone from 'the dumps are having to drop their prices sharply, everyone else is keeping their official asking prices the same', to 'more and more of even the good places are recognising they need to drop at least a bit, to beat the competition'. A lot of the newly added places seem to be being rented out directly by the owner (or maybe even sublet?), rather than via an estate agent.

I wonder how many of these may fail to shift as rentals and eventually get put onto the market for sale instead in a few months time. I could imagine a glut of apartments for sale over the next 6-9 months, unfortunately for their owners.

Headline or advertiseed rent may be the same but actual asking may have dropped
I know of one apt headline 1850 went for 1700
Talked to owner today

Mr Hindley

brisan wrote: »

I know of one apt headline 1850 went for 1700
Talked to owner today

Wow. That's quite the haircut. The times, they are a-changin', alright..!

Browney7

Market in D15 is puzzling - there are some brand new one, 2 and 3 beds available from October at fairly hefty prices (1750 for one beds) but then far inferior properties in inferior areas of D15 seem to be benchmarking off this and seeking 10 to 15% less but the same ads seem to be staying up for a while.

Claw Hammer

Mr Hindley wrote: »

FWIW, as someone who's been casually monitoring the rental market in South Dublin for the last few months and is now watching more closely, the last week feels like a tipping point in terms of asking prices. I'm suddenly seeing a lot more properties appearing in my price range. As an example (although still too rich for my blood), here's a nice 2-bed house in central Dalkey for 2k a month, which I don't think I would have seen even a couple of weeks back:

https://www.daft.ie/dublin/houses-for-rent/dalkey/dalkey-avenue-67-dalkey-dublin-2068794/

I don't have hard evidence to back it up, but it feels like we've gone from 'the dumps are having to drop their prices sharply, everyone else is keeping their official asking prices the same', to 'more and more of even the good places are recognising they need to drop at least a bit, to beat the competition'. A lot of the newly added places seem to be being rented out directly by the owner (or maybe even sublet?), rather than via an estate agent.

I wonder how many of these may fail to shift as rentals and eventually get put onto the market for sale instead in a few months time. I could imagine a glut of apartments for sale over the next 6-9 months, unfortunately for their owners.

it will take some time for hard evidence of trends in the market to appear. It seems that some landlords are held property empty during the summer hoping for the usual surge in demand in September. That surge has not materialised to anything like the usual extent. Landlords who held on waiting for the surge are now reluctantly dropping the rents, either by advertising at lower prices or allowing tenants negotiate lower prices. It will take some months for this to appear in the statistics it is also the case that some landlords will avail of the right to a 4% increase in situations where they were well below the market rent. This will skew the statistics to show a smaller fall in rents overall.

brisan

Mr Hindley wrote: »

Wow. That's quite the haircut. The times, they are a-changin', alright..!

The headline rent or rent on the lease is still down as 1850,even though the tenant only pays 1700
Its a small drop compared to whats going on out there

https://thepropertypin.com/c/the-irish-property-bubble/rental-price-drops

Viscount Aggro

Irish Life own a 300 unit apartment block in Dundrum called Fern Bank.
Most of the units are still empty, at rents of 2750 per 2 bedroom unit.
This is how the commercial letting market works. They would rather have empty units, than reduce their rental rates.

Hubertj

Viscount Aggro wrote: »

Irish Life own a 300 unit apartment block in Dundrum called Fern Bank.
Most of the units are still empty, at rents of 2750 per 2 bedroom unit.
This is how the commercial letting market works. They would rather have empty units, than reduce their rental rates.

Wow, is that a new block or have they been empty for a long time? 2750 sounds a lot for a 2 bed anywhere?

Ozark707

Viscount Aggro wrote: »

Irish Life own a 300 unit apartment block in Dundrum called Fern Bank.
Most of the units are still empty, at rents of 2750 per 2 bedroom unit.
This is how the commercial letting market works. They would rather have empty units, than reduce their rental rates.

I knew there was huge amounts of empties down in the quays/dock lands..but now to hear that there are huge amount of empties further out comes as a bit of a surprise. It looks like an empties tax is realistically the only way this will be tackled. If they couldn’t let them at 2750 pre Covid they have not a hope in hell now.

Ozark707

Hubertj wrote: »

Wow, is that a new block or have they been empty for a long time? 2750 sounds a lot for a 2 bed anywhere?

Take a look on daft for 2 beds for over 3k and you will find plenty down in the docklands etc. From what I can see most of these have been empty for well over a year so they clearly have no intention of dropping the rents. The capital appreciation already accrued must be sizeable as otherwise it is hard to understand what their strategy is. Maybe FF will come in and rent lots of social housing as the private rental market will not pay these rates any longer.

I am a member of a FB group where there are rooms coming up every now and then. It definitely seems rates are dropping now for private rooms.

The_Conductor

Viscount Aggro wrote: »

Irish Life own a 300 unit apartment block in Dundrum called Fern Bank.
Most of the units are still empty, at rents of 2750 per 2 bedroom unit.
This is how the commercial letting market works. They would rather have empty units, than reduce their rental rates.

It belongs to one of the pension funds that they administer.
They are looking at the longer term- financially it makes more sense for them to be able to show them as 'worth' a potential income of X- rather than make an amended FRS17 declaration factoring in a lower potential income for the units.

Once they don't actually let the units at a lower price- the impetus to book the discount to the income stream they made to the pension fund payees is not there. Hell- they probably won't even be asked to account for the dwindling cash-flow- and if they are- they'll probably just blame Covid.

Its similar to what happened with the commercial units in the Ilac Centre (also administered by Irish Life- on behalf of a different pension fund).

Its financial trickery- along with a reluctance to book the lower prospective income earlier in the day. If they did not get locked into a lower rent- they might have more impetus to do so- but the hole this will knock in the balance sheet of the assets of the pension fund its vested in- mean it is far preferable to keep them empty than to lower the price.

For the commercial units- they didn't lower the rent- they instead gave varying degrees of 'hello' holidays to businesses willing to take units- along with a percentage of their turnover- the percent of the takings was stopped once the 'Hello' period was over- and rent went up to the prescribed amount. This is why there were so many small boutique shops in there for almost exactly 6 month periods, before vanishing.

beauf

Been watching the empties in the IFSC and Docklands for many years.

Quite common in London. Buy to leave.

https://www.designingbuildings.co.uk/wiki/Buy_to_leave

Ozark707

beauf wrote: »

Been watching the empties in the IFSC and Docklands for many years.

Quite common in London. Buy to leave.

https://www.designingbuildings.co.uk/wiki/Buy_to_leave

But doesn't that only make sense (long term) while capital values are increasing consistently?

beauf

Ozark707 wrote: »

Bit doesn't that only make sense (long term) while capital values are increasing consistently?

They generally are increasing viewed the long term over the life of the investment.

They don't want the work and risk of renting it out either.

Ozark707

beauf wrote: »

They generally are increasing viewed the long term over the life of the investment.

They don't want the work and risk of renting it out either.

Luckily they are facilitated by governments to do that. You'd swear that there was no backlash from the voters in the last election to ridiculous rents :rolleyes:

Assetbacked

Ozark707 wrote: »

Luckily they are facilitated by governments to do that. You'd swear that there was no backlash from the voters in the last election to ridiculous rents :rolleyes:

They might actually get away with it though, unfortunately. Half a year into this election cycle, only 4 years until we start to prepare for the next GE, which doesn't give a lot of time to dramatically get those rents to drop.

However, the demand shock to the rental market is huge and ongoing. We are only 6 months in but as we get closer to and beyond 12 months with the demand shock continuing, then there will be more widespread market movement.

I speak as if we will see the demand shock continue or even grow as it is clear from the covid response that demand will remain as is for at least another 6 months, meaning no increased demand, as follows;

1) The WFH for the big MNCs, for whom immigration has been a big source for filling the jobs they've created in recent years, is going to continue until mid-next year at the earliest we understand. So new staff won't be required to fly into Ireland to take up roles.

2) The jobs done by students, both Irish and foreign, don't exist and won't for quite some time (ie the few hours in retail or pubs etc), this group of course are renters so they won't be able to pay the rents they need to so Irish students live at home and those foreign students go home and don't continue to arrive.

3) Tourism - as we saw in March, several hundred airbnbs appeared overnight for rent. With tourism dead until spring 2021 at the earliest, these won't be in demand for the next 6 months.

4) There is a rental eviction ban until the end of the year which should expire from early in the new year. That will kick out tenants who can no longer afford to rent/rent at the level they have been renting.

These are just some examples of the demand shock and where it is definitely going to continue for at least another 6 months. The test is whether the market can withstand this demand shock.

Ozark707

Assetbacked wrote: »

These are just some examples of the demand shock and where it is definitely going to continue for at least another 6 months. The test is whether the market can withstand this demand shock.

The only thing I would say to counter that is that the government are looking to buy up places for social housing, I have no doubt as well they will move even more into snapping up rental places so that will keep a floor on prices. Supply on daft has come back about 10% in last month or so and prices seem to be stabilising from what I can see. I can see most riding out the next 6 months if they have been content thus far to do so.

FF came in promising a lot on housing, given that they are barely staying afloat now I can't see them focusing on this area in the next 6 months.

Claw Hammer

Ozark707 wrote: »

The only thing I would say to counter that is that the government are looking to buy up places for social housing, I have no doubt as well they will move even more into snapping up rental places so that will keep a floor on prices. Supply on daft has come back about 10% in last month or so and prices seem to be stabilising from what I can see. I can see most riding out the next 6 months if they have been content thus far to do so.

FF came in promising a lot on housing, given that they are barely staying afloat now I can't see them focusing on this area in the next 6 months.

It is not surprising that supply and after has come back 10% in the last month, given the time of year. After another month, the writing will be on the wall and the penny will drop.

cgcsb

I can already see some decent studios asking for under €1k available, but mostly everything under €1k is still crap that wouldn't be suitable for animal habitation. And actually when you think about it that price for a studio is still shocking considering the average wage and comparing to much bigger cities in the rest of Europe, there's a long way to fall until 'normality' is reached and I don't think this crisis will quite get us there. We need a lot more building and some mechanism to prevent high rates of vacancy in blocks owned by institutional landlords. The proposed BTR schemes cannot come soon enough.

Ozark707

cgcsb wrote: »

I can already see some decent studios asking for under €1k available, but mostly everything under €1k is still crap that wouldn't be suitable for animal habitation. And actually when you think about it that price for a studio is still shocking considering the average wage and comparing to much bigger cities in the rest of Europe, there's a long way to fall until 'normality' is reached and I don't think this crisis will quite get us there. We need a lot more building and some mechanism to prevent high rates of vacancy in blocks owned by institutional landlords. The proposed BTR schemes cannot come soon enough.

I am not sure we will ever get the normality that you correctly point out but hopefully we can move some way towards that in the 12-18 month time frame.

I have given up on any hope that empties in the institutional letting space will ever be tackled.

beauf

Sherry FitzGerald said investors are continuing to withdraw from the market. About 32 per cent of all sellers in the first six months of 2020 were selling investment properties while just 12 per cent of purchasers were investors. If this continues throughout the year, the agent said, it would represent the lowest proportion of investors entering the market since 2012.

Falling rents, falling values, (according to Boards), no timely way of recovering property. Most entering the market are owner occupiers.

JimmyVik

beauf wrote: »

Falling rents, falling values, (according to Boards), no timely way of recovering property. Most entering the market are owner occupiers.

Im actually surprised there were any investors at all.
Must be REITS

beauf

JimmyVik wrote: »

Im actually surprised there were any investors at all.
Must be REITS

REITs are currently something like 15% of the market. (open to correction on that). So its unlikely, though not impossible they are mainly REITs.

Assetbacked

If rents became significantly cheaper, in fact cheaper than paying a mortgage on average, would it be likely that people wouldn't bother buying houses or what impact on demand for housing would it have? Has there been a time before where rents were lower than mortgages?

The_Conductor

Assetbacked wrote: »

If rents became significantly cheaper, in fact cheaper than paying a mortgage on average, would it be likely that people wouldn't bother buying houses or what impact on demand for housing would it have? Has there been a time before where rents were lower than mortgages?

Its Ireland. Everyone has a preoccupation with owning property. It doesn't matter what level rent is at, a sizable cohort of people see it as a waste, and refuse to view it as payment for a service.

Sunny Disposition

Assetbacked wrote: »

If rents became significantly cheaper, in fact cheaper than paying a mortgage on average, would it be likely that people wouldn't bother buying houses or what impact on demand for housing would it have? Has there been a time before where rents were lower than mortgages?

People still will want to buy, it’s often been the case that rents are cheaper, it makes complete sense that they would be given you end up with nothing long term from paying it.