Irish Property Market 2020 Part 2

Browney7

Hubertj wrote: »

This place is near my home. For sale sign went up last week and sale agreed sign went up today. It must be unusual for something to move so quickly? And yea yea it’s only gone sale agreed, not sold

https://www.myhome.ie/residential/brochure/36-pembroke-gardens-ballsbridge-dublin-4/4447046

Interesting to see what it's get up on the register for. 35 Pembroke gardens sold for 630k at the start of the year

CertifiedSimp

Wonder what kind of people would buy that? Would it be cash?

Quite small. Someone able to afford that would probably be able own their own business. Buy out in the sticks for 300k and spend 300k on a couple holiday homes.

edjkdkjdhjkd

Hubertj wrote: »

This place is near my home. For sale sign went up last week and sale agreed sign went up today. It must be unusual for something to move so quickly? And yea yea it’s only gone sale agreed, not sold

https://www.myhome.ie/residential/brochure/36-pembroke-gardens-ballsbridge-dublin-4/4447046

Sheer desperation, most likely a couple who fear they will lose their jobs in the next year and don't want to keep renting. Which is insane in itself, make the biggest purchase of your life before losing your job but country is insane in fairness.


That or a cash buyer with more money than brains.

edjkdkjdhjkd

Curious to hear about peoples situation on here, i assume most posters have some sort of stake in the property game or plan to. Perhaps in the format below:

Situation:

Couple, deposit of roughly 70k so far (could stretch to 110k) if we wait two year. Aim to purchase a house in either North Dublin (Cabra, Finglas area) Or South Dublin (Ballyfermot, Drimnagh). Max we will spend is 300k but ideally 240k/250k.


What we hope will happen:

Prices drop roughly 10-20% between now and 2022 and we get a good deal and max out on the deposit to ensure a low mortgage

What we think will happen:

After Covid payment is taken away, the economy will be devastated but it may take some time for the impact to hit the property market, we only plan to wait 2 years max and fear we may purchase before the bottom but that's something we will have to accept and move. We see drops of 10-15% more likely on the areas we are targeting.

hometruths

The_Conductor wrote: »

I don't see how the 'Fair Deal' scheme will not be at least doubled in percentage terms on the call on property disposals. Its costing north of a billion a year- ontop of the funds coming in on the disposal of people's assets. It currently has a capacity of approx 23,500 and it is profiled to need to increase to 38,000 places (at any given time) by 2028 (without a change in funding this would represent an exchequer cost of over 3 billion a year).

The other aspect of all of this- is the larger number of properties left vacant while people are in nursing homes- often the properties aren't regularly heated and suffer all manner of damage. There has to be some sort of a scheme whereby the 23k properties out there are brought back into the available housing stock for rental or other purposes. Its nonsensical that they are, in the main, left vacant.

We have an aging population- and are very close to having a large cohort reach retirement age- these people have entitlements- someone is going to have to pay for the entitlements though.

Once again, rather than further meddling with more silly schemes, remove the RPZ rules and allow LLs more leeway in terminating leases/evicting problem tenants.

RPZs and PRTB tenant bias is simply compounding the problem of restricted supply.

Removing them will remove the main reasons properties are left vacant.

An increase in rental supply will solve the problems the of ever increasing rents and tenant protection, so they won't be needed anyway.

Islander13

Hubertj wrote: »

This place is near my home. For sale sign went up last week and sale agreed sign went up today. It must be unusual for something to move so quickly? And yea yea it’s only gone sale agreed, not sold

https://www.myhome.ie/residential/brochure/36-pembroke-gardens-ballsbridge-dublin-4/4447046

Decent buy that. Can see why it went quickly

hometruths

edjkdkjdhjkd wrote: »

Curious to hear about peoples situation on here, i assume most posters have some sort of stake in the property game or plan to. Perhaps in the format below:

Situation:

Couple, deposit of roughly 70k so far (could stretch to 110k) if we wait two year. Aim to purchase a house in either North Dublin (Cabra, Finglas area) Or South Dublin (Ballyfermot, Drimnagh). Max we will spend is 300k but ideally 240k/250k.


What we hope will happen:

Prices drop roughly 10-20% between now and 2022 and we get a good deal and max out on the deposit to ensure a low mortgage

What we think will happen:

After Covid payment is taken away, the economy will be devastated but it may take some time for the impact to hit the property market, we only plan to wait 2 years max and fear we may purchase before the bottom but that's something we will have to accept and move. We see drops of 10-15% more likely on the areas we are targeting.

Personally I think the probabilities that you will see drops of that order within two years are worth the wait.

Edit to add: Apologies, I now see you weren't looking for advice but were laying out your situation and asking re others! Good idea, no problem laying mine out:

Situation:

Family with 2 kids, living in detached house, high value area, Dublin commuter belt. No mortgage. Looking to sell next summer (does not suit to sell pre summer for good reasons) to move to similiar property further from Dublin. We don't need the premium for being close to Dublin as I've WFHed for 20+ years. We are unlikely to move again unless for reasons related to old age.

What we hope will happen:

Property continues to go gangbusters and we get top whack for our house. Sure the property that we have to buy will have increased too but the relative change would be in our favour if market maintains momentum.

What we think will happen:

As above. If government supports are withdrawn economy is big trouble, real unemployment will rocket, property prices will collapse, ours more than most, certainly more than the property we would replace it with.

For me the only important thing is the net difference in price. Sale price of my current house and purchase price of the next one is only important in relative terms.

The_Conductor

schmittel wrote: »

Once again, rather than further meddling with more silly schemes, remove the RPZ rules and allow LLs more leeway in terminating leases/evicting problem tenants.

RPZs and PRTB tenant bias is simply compounding the problem of restricted supply.

Removing them will remove the main reasons properties are left vacant.

An increase in rental supply will solve the problems the of ever increasing rents and tenant protection, so they won't be needed anyway.

It may make perfect sense- and it may lead to an increase in the number of units available to rent- however, its not going to happen in a million years. The government would be hounded from office and the various media outlets would be spouting vitriol the such as we've not heard before.

Its completely implausible that RPZs will end and landlords given leeway to enforce tenancy terminations and deal with problem tenants.

Any politician who suggested actions like this- would be signing the end of their political career before they even left the room.

Hubertj

edjkdkjdhjkd wrote: »

Curious to hear about peoples situation on here, i assume most posters have some sort of stake in the property game or plan to. Perhaps in the format below:

Situation:

Couple, deposit of roughly 70k so far (could stretch to 110k) if we wait two year. Aim to purchase a house in either North Dublin (Cabra, Finglas area) Or South Dublin (Ballyfermot, Drimnagh). Max we will spend is 300k but ideally 240k/250k.


What we hope will happen:

Prices drop roughly 10-20% between now and 2022 and we get a good deal and max out on the deposit to ensure a low mortgage

What we think will happen:

After Covid payment is taken away, the economy will be devastated but it may take some time for the impact to hit the property market, we only plan to wait 2 years max and fear we may purchase before the bottom but that's something we will have to accept and move. We see drops of 10-15% more likely on the areas we are targeting.

I think you’ve answered your own question and have though through different scenarios. With so much uncertainty at present, I Think it’s a good idea to hold off purchasing.

PommieBast

Mic 1972 wrote: »

How do you work out the 51%?
Rental income is taxed the same way as any other income. You could be paying 20% or higher depending on your income bracket

Given how low the threshold is for >50% its gonna be pretty much everyone who works full-time.

thomasdylan

edjkdkjdhjkd wrote: »

Sheer desperation, most likely a couple who fear they will lose their jobs in the next year and don't want to keep renting. Which is insane in itself, make the biggest purchase of your life before losing your job but country is insane in fairness.


That or a cash buyer with more money than brains.

You're probably well off the mark.

I think it's unlikely that this house was bought by first time buyers who had been renting. There's not many first time buyers buying two beds at 600k+.

It's a lovely area and it's probably downizers from the area.

Mic 1972

PommieBast wrote: »

Given how low the threshold is for >50% its gonna be pretty much everyone who works full-time.

the tax bands are 20% and 40%,

I'm not aware of a 51% band rate

awec

Mic 1972 wrote: »

the tax bands are 20% and 40%,

I'm not aware of a 51% band rate

By the time you add PRSI and USC into the equation there are people paying an effective 51% rate.

fliball123

Mic 1972 wrote: »

How do you work out the 51%?
Rental income is taxed the same way as any other income. You could be paying 20% or higher depending on your income bracket

well you have to pay full tax as its taxed as income to USC , Income tax, Prsi and of course I am not taking into account property tax

Hubertj

schmittel wrote: »

Personally I think the probabilities that you will see drops of that order within two years are worth the wait.

Edit to add: Apologies, I now see you weren't looking for advice but were laying out your situation and asking re others! Good idea, no problem laying mine out:

Situation:

Family with 2 kids, living in detached house, high value area, Dublin commuter belt. No mortgage. Looking to sell next summer (does not suit to sell pre summer for good reasons) to move to similiar property further from Dublin. We don't need the premium for being close to Dublin as I've WFHed for 20+ years. We are unlikely to move again unless for reasons related to old age.

What we hope will happen:

Property continues to go gangbusters and we get top whack for our house. Sure the property that we have to buy will have increased too but the relative change would be in our favour if market maintains momentum.

What we think will happen:

As above. If government supports are withdrawn economy is big trouble, real unemployment will rocket, property prices will collapse, ours more than most, certainly more than the property we would replace it with.

For me the only important thing is the net difference in price. Sale price of my current house and purchase price of the next one is only important in relative terms.

Nice plan but very unlucky with your timing. Your focus on the price differential makes sense instead of concerning yourself with house prices dropping by x or y.

Donald Trump

fliball123 wrote: »

ah you cant say that about a lot of landlords remember most or any who are working will have to pay 51% back to the state straight away on tax and if they have a mortgage on it then they are getting little or nothing back from the rent

It's income. You pay income tax on it. It's not that difficult to understand.

ebayissues

edjkdkjdhjkd wrote: »

Curious to hear about peoples situation on here, i assume most posters have some sort of stake in the property game or plan to. Perhaps in the format below:

Situation:

Couple, deposit of roughly 70k so far (could stretch to 110k) if we wait two year. Aim to purchase a house in either North Dublin (Cabra, Finglas area) Or South Dublin (Ballyfermot, Drimnagh). Max we will spend is 300k but ideally 240k/250k.


What we hope will happen:

Prices drop roughly 10-20% between now and 2022 and we get a good deal and max out on the deposit to ensure a low mortgage

What we think will happen:

After Covid payment is taken away, the economy will be devastated but it may take some time for the impact to hit the property market, we only plan to wait 2 years max and fear we may purchase before the bottom but that's something we will have to accept and move. We see drops of 10-15% more likely on the areas we are targeting.

How much rent would you have spent waiting for price drop in two years time? Will you get a mortgage in two years?

neutral guy

My vision of life
The government try to shake the property market taking of /reducing wage subsidy
The more people will of the subsidy the more will back to mortgage ( banks stopped give mortgages to people on wage subsidy )
Nobody cares about old people anymore,the more will die of the Covid the less pensions will be paid and more houses will come on sale
Recession ? The clear words been said :
https://www.irishtimes.com/business/economy/chances-of-another-recession-in-ireland-100-says-ntma-chief-1.3946583
All money paid by government for wage subsidies will have to be paid back ! By you for sure !
The UK government made first steps :
https://www.standard.co.uk/news/uk/tax-hikes-coronavirus-cost-a4536186.html
I am sure the Ireland government will be next the price of borrowing due with recession will be higher
Pretty sure there will be plenty property for sale for price of peanuts very soon
The only problem Nobody will have money for it !
Well,somebody says savings are growing
Lets see for how long !
Our company out from wage subsidy from next week Monday
I gonna grab my payslip and run to CU for biggest loan I can get
Before I will loose job and CU will not give me the loan for that reason.
Sorry,there is no property for rent in Laois and government does not worry about it ?
Government has no money to think about it guys.All spent for Covid already !

PropQueries

According to The Times two weeks ago "Plans by third-level institutions to bring international students to Ireland on chartered planes were abandoned last week due to “regulatory challenges”

Link to The Time article here: https://www.thetimes.co.uk/article/irish-universities-on-financial-tightrope-as-covid-hits-plan-to-fly-in-overseas-students-3s6kgqg6f 7

PropQueries

According to the Business Post "Developers to change plans as they seek to capitalise on demand for housing amid dramatic drop in hotel occupancy, according to report".

Sunday Business Post article here: https://www.businesspost.ie/property-insight/hotel-builds-to-be-cancelled-to-make-way-for-new-homes-7dd05a3e

smurgen

PropQueries wrote: »

According to the Business Post "Developers to change plans as they seek to capitalise on demand for housing amid dramatic drop in hotel occupancy, according to report".

Sunday Business Post article here: https://www.businesspost.ie/property-insight/hotel-builds-to-be-cancelled-to-make-way-for-new-homes-7dd05a3e

Well it makes sense and what others have predicted. Glad to see this type of thinking.

Hubertj

smurgen wrote: »

Well it makes sense and what others have predicted. Glad to see this type of thinking.

Unfortunately I’m sure the NIMBYs will be all over this cross the country. Very often the same people whining about a shortage of accommodation are the same people objecting to developments.

PropQueries

Interesting article / advertorial in the Irish Times today about Aviva seeking €80 million for Royal Hibernian Way in Dublin. They put forward a fairly decent sales pitch.

I’m sure it has nothing to do with Aviva stopping investors from taking money out of their €940 million Irish property funds back in January…

Link to Hibernian Way article/ sales pitch here: https://www.irishtimes.com/business/commercial-property/aviva-tests-strength-of-market-with-80m-sale-of-royal-hibernian-way-1.4343825

Link to Aviva blocking redemptions article here: https://www.irishtimes.com/business/commercial-property/aviva-stops-investors-from-taking-money-out-of-irish-property-funds-1.4157574

fliball123

Donald Trump wrote: »

It's income. You pay income tax on it. It's not that difficult to understand.

I know that I am talking to a different poster and you need to follow what was said, some people are saying landlords are making a killing I am simply pointing out the fact that 51% goes straight back to the state + property tax and if the landlord has a mortgage then in a lot of cases they making little or nothing on the property

The_Conductor

PropQueries wrote: »

Interesting article / advertorial in the Irish Times today about Aviva seeking €80 million for Royal Hibernian Way in Dublin. They put forward a fairly decent sales pitch.

I’m sure it has nothing to do with Aviva stopping investors from taking money out of their €940 million Irish property funds back in January…

Link to Hibernian Way article/ sales pitch here: https://www.irishtimes.com/business/commercial-property/aviva-tests-strength-of-market-with-80m-sale-of-royal-hibernian-way-1.4343825

Link to Aviva blocking redemptions article here: https://www.irishtimes.com/business/commercial-property/aviva-stops-investors-from-taking-money-out-of-irish-property-funds-1.4157574

The price they're seeking seems to me to be highly speculative- it represents an ROI of only 3.16%
Even allowing for the fact that there are vacant units there- the sums just don't add up IMHO

The_Conductor

fliball123 wrote: »

I know that I am talking to a different poster and you need to follow what was said, some people are saying landlords are making a killing I am simply pointing out the fact that 51% goes straight back to the state + property tax and if the landlord has a mortgage then in a lot of cases they making little or nothing on the property

I think that the entire manner of how income from residential property is taxed- urgently needs reform. My preference would be for a flatrate tax- on the gross rental income (of perhaps 25%) with no deductions for anything allowable- and this would be applied to all actors in the sector without exception- including the REITs.

The biggest issue I have with the taxation regime (and not just associated with the residential letting sector)- is that the cost of debt is an allowable expense. IMHO- debt should never, ever, be an allowable cost. It creates a perverse disincentive to ever pay down the debt associated with a property- sure why would you- when you'll be punished with higher tax if you do.

A possible manner of looking at this might include a rebate for any landlords who let property that has no debt secured on it- however, for numerous reasons- this would not fly.

Even publications such as 'The Economist' agree that in an international context- debt has to be removed from tax considerations- as aside from any other factor, it introduces system risk into economic systems- and is paid for out of general taxation by introducing additional burdens on those who are unable to avail of such mechanisms.

PropQueries

The_Conductor wrote: »

The price they're seeking seems to me to be highly speculative- it represents an ROI of only 3.16%
Even allowing for the fact that there are vacant units there- the sums just don't add up IMHO

True. For the retail part, it never seemed to have high footfall even in busy periods. Many "prime" locations that appear like a good location and on paper should achieve significant footfall, sometimes don't. It's like having a betting shop across the road from a pub. If it was adjacent to the pub, yes, it would do well, but punters don't cross a busy road to bet if they have other options.

PropQueries

The_Conductor wrote: »

I think that the entire manner of how income from residential property is taxed- urgently needs reform. My preference would be for a flatrate tax- on the gross rental income (of perhaps 25%) with no deductions for anything allowable- and this would be applied to all actors in the sector without exception- including the REITs.

The biggest issue I have with the taxation regime (and not just associated with the residential letting sector)- is that the cost of debt is an allowable expense. IMHO- debt should never, ever, be an allowable cost. It creates a perverse disincentive to ever pay down the debt associated with a property- sure why would you- when you'll be punished with higher tax if you do.

A possible manner of looking at this might include a rebate for any landlords who let property that has no debt secured on it- however, for numerous reasons- this would not fly.

Even publications such as 'The Economist' agree that in an international context- debt has to be removed from tax considerations- as aside from any other factor, it introduces system risk into economic systems- and is paid for out of general taxation by introducing additional burdens on those who are unable to avail of such mechanisms.

I think the primary advantage of purchasing an investment property from a small investors perspective is that they can leverage up to purchase the asset. The bank won't lend to a small investor to purchase other types of assets e.g. shares etc. If the value rises, they gain exponentially, if not, the opposite.

It's a gamble that may have paid off very handsomely over the past 40 years (depending on when they bought). I'm not too sure about the next 40 years.

In relation to incentives to encourage landlords to let out vacant properties. Everyone seems to mention "incentives". I think "carrots" would be a better idea. I understand it's a no-no at the moment, but I think a property vacancy tax, e.g. 50% of potential market rent would encourage all vacant properties (retail and residential) into the market.

As the ECB is now the backstop for the main Irish banks, the state shouldn't worry too much about all this extra supply bringing values down. The economy benefits and there's little to lose. I know the pension industry would also suffer but I think they're just zombie firms now and will go under sooner rather than later. Best break them now and get on with growing the economy.

edjkdkjdhjkd

A lot of people my partner knows in the tech industry seem to have been told to expect pay cuts or freezes at best.

No concrete confirmation but Leadership seems to have made it clear, curious if anyone has heard the same?

JimmyVik

edjkdkjdhjkd wrote: »

A lot of people my partner knows in the tech industry seem to have been told to expect pay cuts or freezes at best.

No concrete confirmation but Leadership seems to have made it clear, curious if anyone has heard the same?

Never waste a good recession would be the way they will go.
Even if they arent effected by the recession, they will use it to cut costs. Be that wages, rents, contracts etc