Irish Property Market 2020 Part 2

DelBoy Trotter

gourcuff wrote: »

when people say they would have bought if it wasn't for Covid, i am not sure they understand how competitive it is for housing when you are trying to buy.

Even if you find a place you really like, in my experience there are 20+ other couples at the viewings all with the same idea, and many with deeper pockets than you.

We got outbid on maybe 7 properties before we got our place. In the end we had to increase the amount we wanted to spend to get a nice place in an area we liked and to outbid the competiton.

Similarly with new builds, the better units go quick , those little red stickers fly up on the board and you get left with the mid-terrace with tiny garden thats way over-priced.

I would advise you budget a year for house hunting.

I agree with the above. We have been looking for a year (well 6 months in reality up until Covid hit). We didn't even get to the point of actually putting in an offer on any house as anything we liked was in a bidding war within the first week

Bass Reeves

Bass Reeves wrote: »

More than likely all the work was done after buying. What looks like having being done is an attic extension, paving, outside landscaping, new doors and windows.I imagine there was some money spend inside as well, new Kitchen, flooring, tiling bathrooms etc. If it was done in the he 2012-14 period 50k would have completed a lot if that. Even up to 2017 100k would have covered it. It unlikely that the money was spend in the last 2-3 years as selling a house is not a spontaneous decision.

I'm not suggesting it was done recently, I never even hinted that the work was done in the last 2 to 3 years.

schmittel wrote: »

.........

Of course I may be wrong on all of the above and they spent the guts of 400k on the house to achieve a shinier version of what was there before..........

Obviously property rose in value from 2011 to 2018/9 2011 was rock bottom.

From the outside 2011 picture the house was nothing like the recent interior pictures.

PropQueries

IAmTheReign wrote: »

From my experience new builds aren't selling out quickly at all.

As an example, I'm from Lucan originally so naturally I keep an eye on things there as I know the area. There's a recent development Shackleton Park that is aimed squarely at first time buyers that has multiple units available, despite the fact that they were advertising in February of last year that there was only a few left/

At the other end of the scale there is a 'luxury' development of large detached houses called Rokeby Park that still hasn't sold out despite first coming onto the market in 2015!

I think most people living in Dublin have noticed the ever increasing number of unsold/ unrented new built units over the past three years. This was then backed up by the Goodbody report last year.

I would assume the number of unsold units in Dublin would be even higher if the county councils weren't buying up or renting a significant proportion of them.

Marius34

PropQueries wrote: »

I think most people living in Dublin have noticed the ever increasing number of unsold/ unrented new built units over the past three years. This was then backed up by the Goodbody report last year.

I would assume the number of unsold units in Dublin would be even higher if the county councils weren't buying up or renting a significant proportion of them.

Goodbody report probably tells that large number of property are not getting sold in open market. There is growing number of BTL, self builts, government programs like PPP.
This is backed as well by Property price register, there is always less registered sales, than numbers of new build completions.
In addition the vacancy rate in country is going down, so nothing to back up on the numbers of increase on empty new build units.

Cuddlesworth

PropQueries wrote: »

Link to RTB landlord registration statistics is here: https://www.rtb.ie/research/rtb-registration-statistics

Attack at will. I don't mind being corrected. It's how we learn.

1- REIT's are mostly purchasing developments, so I would be making a assumption they would count for new tenancies in new housing stock, not existing tenancies in exisiting housing stock.

2- Sure, I'm not sure that many private landlords have really continued investing but its a possibility.

3- Housing body's have been purchasing and adding to exisiting stock, their tenancies are shown now days though and their impact is minimal.

4- They fell. Will get back to this.

5- Councils don't register with the RTB. And councils are not adding stock, housing associations have taken over that role.

6- I think there will be a lot of this coming online using the new planning laws but I don't think there would be significant impact on the market.

Lets get back to the landlords fell during the last 4 years and why it significant. First thing is that the number of private tenancies fell during that period too, trending with the decrease in landlord numbers. REIT's and housing body's should have added significantly to the number of tenancies but they still fell.

The rent to own ratio is currently around 20% in this country. So if you get 20k new homes in 2019, you expect to see a increase of 4k in private tenancies as new landlords enter the market. If in a 4 year period you build 60k new homes, you expect to see a rough increase of 12k new tenancies, REIT, housing body, private landlord etc.

Lastly, RTB don't publish the number of landlords who register pre-existing tenancies who were not registered before. I don't know what the impact

So what do we know with certainty.

Significantly high rents across the country in the last 4 years.
Significant legislation put in place regulating the rental market in the last 4 years.
New housing stock being added at a increasing rate across the country in the last 4 years.
Number of private tenancies decreasing during that period.
Number of private landlords decreasing during that period.

Seems fairly easy to extrapolate that something is wrong, most likely smaller scale landlords bailing hard.

IAmTheReign

Marius34 wrote: »

I have no clue about Lucan, but houses next to me in Dublin 13, gets sold before completion. Although Lucan might be not a case, and might be that houses in Lucan doesn't sell well.
But my question on which basis do you know that houses in those development are not selling well? Do you see many empty completed new builds (not show house) that has not been sold for a while? which street? From what i see it's an ongoing development, so it's normal to see adds until development gets completed.

Well for Rokeby Park I mean I don't need to wander around the estate to know not fully selling a development of 71 houses in 5 years isn't good!

The Shackleton development was started so long ago there's already some coming up for sale second hand. It's not an area of Lucan I would want to live but the quality of houses seem to be very good for the price. It all reminds me of the Adamstown development in the lead up the recession where there was houses and apartments lying empty for years before they eventually sold.

PropQueries

Marius34 wrote: »

Goodbody report probably tells that large number of property are not getting sold in open market. There is growing number of BTL, self builts, government programs like PPP.
This is backed as well by Property price register, there is always less registered sales, than numbers of new build completions.
In addition the vacancy rate in country is going down, so nothing to back up on the numbers of increase on empty new build units.

Maybe. But this developer in Dublin, back in February (pre-covid), would disagree with you:

"Two Dublin 4 apartment blocks where apartments went for sale last year are now being offered exclusively as rentals.

Deerfield on Sandymount Avenue, Ballsbridge, with nine units, and 19 Pembroke Road, with a mix of six period units and six new-build units, both looked set to sell well, with booking deposits quickly paid on about half the units at 19 Pembroke Road, and a smaller number reserved at Deerfield.

But sales failed to materialise in line with expectations and developer Agricula has withdrawn the properties from the market and returned booking deposits to intending buyers. As of mid-January they have been advertised for rent through agent Bergins."

Link to Irish Times article here: https://www.irishtimes.com/life-and-style/homes-and-property/plan-b-for-d4-boutique-apartments-as-buyers-become-renters-instead-1.4161644

PropQueries

Cuddlesworth wrote: »

1- REIT's are mostly purchasing developments, so I would be making a assumption they would count for new tenancies in new housing stock, not existing tenancies in exisiting housing stock.

2- Sure, I'm not sure that many private landlords have really continued investing but its a possibility.

3- Housing body's have been purchasing and adding to exisiting stock, their tenancies are shown now days though and their impact is minimal.

4- They fell. Will get back to this.

5- Councils don't register with the RTB. And councils are not adding stock, housing associations have taken over that role.

6- I think there will be a lot of this coming online using the new planning laws but I don't think there would be significant impact on the market.

Lets get back to the landlords fell during the last 4 years and why it significant. First thing is that the number of private tenancies fell during that period too, trending with the decrease in landlord numbers. REIT's and housing body's should have added significantly to the number of tenancies but they still fell.

The rent to own ratio is currently around 20% in this country. So if you get 20k new homes in 2019, you expect to see a increase of 4k in private tenancies as new landlords enter the market. If in a 4 year period you build 60k new homes, you expect to see a rough increase of 12k new tenancies, REIT, housing body, private landlord etc.

Lastly, RTB don't publish the number of landlords who register pre-existing tenancies who were not registered before. I don't know what the impact

So what do we know with certainty.

Significantly high rents across the country in the last 4 years.
Significant legislation put in place regulating the rental market in the last 4 years.
New housing stock being added at a increasing rate across the country in the last 4 years.
Number of private tenancies decreasing during that period.
Number of private landlords decreasing during that period.

Seems fairly easy to extrapolate that something is wrong, most likely smaller scale landlords bailing hard.

Maybe. But would a c. 3% fall in the number of landlords between 2016 and 2020 be regarded as "bailing hard"?

I think it's more to do with landlords buying investment properties between 2012 and 2014 to take advantage of the capital gains tax reliefs.

They initially had to hold onto them for 7 years to take advantage of this tax relief. Two budgets ago, that was reduced to 5 years. I think this explains the slight c. 3% fall in registered landlords between 2016 and 2020.

awec

PropQueries wrote: »

I think most people living in Dublin have noticed the ever increasing number of unsold/ unrented new built units over the past three years. This was then backed up by the Goodbody report last year.

I would assume the number of unsold units in Dublin would be even higher if the county councils weren't buying up or renting a significant proportion of them.

Um, obviously? The number of unsold units would be higher if houses weren't being bought to house the people who need housing.

In other news, the number of unsold units would increase if we started to colonize mars.

Marius34

IAmTheReign wrote: »

Well for Rokeby Park I mean I don't need to wander around the estate to know not fully selling a development of 71 houses in 5 years isn't good!

The Shackleton development was started so long ago there's already some coming up for sale second hand. It's not an area of Lucan I would want to live but the quality of houses seem to be very good for the price. It all reminds me of the Adamstown development in the lead up the recession where there was houses and apartments lying empty for years before they eventually sold.

One thing would be that they have 71 houses for 5 years empty that not selling, another thing is that the development is slow, developed by smaller constructions teams. It still ongoing development.
Although it's very common that houses over 500K, takes much longer to sell.

awec

I am pretty sure the number of landlords has been trending down every year for almost a decade? Even when prices were going up, and rents going up, the number of landlords was going down. Someone will correct me if I'm wrong I'm sure.

I think a significant factor is the accidental landlords after the 2008 crash finally getting back into equity, selling up and moving on with their lives. But this is just a hunch, nothing to back it up.

PropQueries

awec wrote: »

Um, obviously? The number of unsold units would be higher if houses weren't being bought to house the people who need housing.

Deleted. Replied to wrong post. Apologies.

PropQueries

awec wrote: »

I am pretty sure the number of landlords has been trending down every year for almost a decade? Even when prices were going up, and rents going up, the number of landlords was going down. Someone will correct me if I'm wrong I'm sure.

I think a significant factor is the accidental landlords after the 2008 crash finally getting back into equity, selling up and moving on with their lives. But this is just a hunch, nothing to back it up.

Here's the landlord registration figures 2016 - 2020. The number of registered landlords actually increased between 2016 and 2017. Fell between 2017 and 2018. Remained fairly static between 2018 and 2019. Then fell 2% between 2019 and 2020.

Hardly the avalanche of private landlords leaving the sector that some commentators want everyone to believe.

It also doesn't take into account the thousands of apartments owned by REITS etc., who would be counted as one landlord instead of thousands of additional individual landlords as would have been the case prior to them entering the market.

2016: 175,250
2017: 176,946
2018: 173,951
2019: 173 675
2020: 169,593

In relation to the 2% fall between 2019 and 2020, I think it's more to do with landlords/ investors who bought investment properties between 2012 and 2014 to take advantage of the capital gains tax reliefs.

They initially had to hold onto them for 7 years to take advantage of this tax relief. Two budgets ago, that was reduced to 5 years. I think this explains the slight c. 3% fall in registered landlords between 2016 and 2020.

Yes, some are selling up (3% between 2016 and 2020). But it appears to be primarily to capitalise on the tax free profit they can now crystalise.

awec

Do you have the figures from 2008-2016?

PropQueries

awec wrote: »

Do you have the figures from 2008-2016?

I do. Hard to find as the RTB seems to hide them well. But I provide the RTB link below:

2007: 92,000
2008: 100,000
2009: 116,577
2010: 145,000
2011: 182,000
2012: 212,000
2013: 179,000
2014: 160,000
2015: 170,000
2016: 175,250
2017: 176,946
2018: 173,951
2019: 173 675
2020: 169,593

As you can see from the above, the big drop between 2012 and 2014 coincides with the landlords and other property investors who bought between 2012 and 2014 to capitalise on the capital gains tax reliefs.

That's why I think the small fall in the number of registered landlords between 2016 and 2020 is more to do with landlords/ investors who bought investment properties between 2012 and 2014 to take advantage of these capital gains tax reliefs. This tax relief only applies to properties purchased between 2012 and 2014.

They initially had to hold onto them for 7 years to take advantage of this tax relief. Two budgets ago, that was reduced to 5 years. I think this explains the slight c. 3% fall in registered landlords between 2016 and 2020.

Yes, some are selling up (3% between 2016 and 2020). But it appears to be primarily to capitalise on the tax free profit they can now crystalise rather than the "unprofitability" in the sector that some commentators put forward.

RTB Link for 2007 - 2015 here: https://www.rtb.ie/images/uploads/general/RTB_Annual_Report_2016.pdf

2016 - 2020 figures are on their website here: https://www.rtb.ie/research/rtb-registration-statistics

Wanderer78

awec wrote:

I think a significant factor is the accidental landlords after the 2008 crash finally getting back into equity, selling up and moving on with their lives. But this is just a hunch, nothing to back it up.

Sure why would you be landlord, what a train wreck of a business, the market is not truly capable of providing us with all our needs, particularly in relation to housing

IAmTheReign

Marius34 wrote: »

One thing would be that they have 71 houses for 5 years empty that not selling, another thing is that the development is slow, developed by smaller constructions teams. It still ongoing development.
Although it's very common that houses over 500K, takes much longer to sell.

My point was in response to a poster claiming new builds were selling quickly. Now that might be the case for some developments but I was pointing out that this is not the case for all new builds.

In 2017 the first phase at Shackleton Park sold out off plans. The latest phase has units lying empty. The demand that was there 3 years ago has calmed.

Units in Rokeby Park have been ready to move into since 2015 and there is still some available. Yes, they're expensive so you would expect them to sell slower than other developments but 5 years is a long time to shift 71 houses in a period of supposed high demand.

Cuddlesworth

PropQueries wrote: »

Maybe. But would a c. 3% fall in the number of landlords between 2016 and 2020 be regarded as "bailing hard"?

I think it's more to do with landlords buying investment properties between 2012 and 2014 to take advantage of the capital gains tax reliefs.

They initially had to hold onto them for 7 years to take advantage of this tax relief. Two budgets ago, that was reduced to 5 years. I think this explains the slight c. 3% fall in registered landlords between 2016 and 2020.

The fall in landlords could be attributed to capital gains. But they are not being replaced and the number of tenancies is falling, meaning decreasing supply. The country is still growing, one of the stats should at least be increasing, not decreasing. Even if they remained static over 4 years, its still a relative decrease.

PropQueries

Cuddlesworth wrote: »

The fall in landlords could be attributed to capital gains. But they are not being replaced and the number of tenancies is falling, meaning decreasing supply. The country is still growing, one of the stats should at least be increasing, not decreasing. Even if they remained static over 4 years, its still a relative decrease.

Maybe. But if a landlord who owns three properties buys two more rental properties off another landlord, the number of registered landlords falls by one, but the number of rental properties remains the same i.e. 5.

So, even if the number of registered landlords falls, it doesn't mean the number of rental properties falls.

There's one thing I've noticed over the past three years. The media haven't done much reporting with photos of queues and queues of people standing outside properties for sale or rent.

MacronvFrugals

Wanderer78 wrote: »

Sure why would you be landlord, what a train wreck of a business, the market is not truly capable of providing us with all our needs, particularly in relation to housing

37% of FG TDs being landlords might answer some of those questions.

Hubertj

MacronvFrugals wrote: »

37% of FG TDs being landlords might answer some of those questions.

12.95 Fine Gael TDs are landlords? Who is the 0.95?

brisan

Bass Reeves wrote: »

With a semi lockdown still in place people will still continue to build up savings. Any vaccine will be another 9-12 months before general population are vaccinated and total lockdown ends.

From that savings will continue to climb. What posters are failing to accept is that while all the savings will not effect property prices some of it will. Not everyone is savings extra but some are. Not everyone is saving a deposit but some are. Savings are more likely to be spend on big ticket items rather than whittle away on weekends away. Some will spend this extra savings on cars or once in a lifetime holidays. But for other its will help them to reach there deposit sooner. It will also help breach( or maybe increase them) differences between house prices and mortgages.

If only a faction of those extra savings are directed at house purchases it will impact the market through higher labour and building costs and extra house buyers



It will not protect against inflation

I think someone stated we are heading for deflation ?????

Wanderer78

brisan wrote: »

I think someone stated we are heading for deflation ?????

it looks like thats the story, but i guess we ll know in time

Wanderer78

MacronvFrugals wrote: »

37% of FG TDs being landlords might answer some of those questions.

our housing issues, are far more complicated than just our td's, this the market thing is done, time for us to move on from it

Marius34

IAmTheReign wrote: »

My point was in response to a poster claiming new builds were selling quickly. Now that might be the case for some developments but I was pointing out that this is not the case for all new builds.

In 2017 the first phase at Shackleton Park sold out off plans. The latest phase has units lying empty. The demand that was there 3 years ago has calmed.

Units in Rokeby Park have been ready to move into since 2015 and there is still some available. Yes, they're expensive so you would expect them to sell slower than other developments but 5 years is a long time to shift 71 houses in a period of supposed high demand.

What you mean, that there are multiple houses built in 2015, that still lies empty in development?
Or the ones completed in 2020?

PropQueries

brisan wrote: »

I think someone stated we are heading for deflation ?????

Well, if we do go into a long period of deflation, prices and wages fall. Given that interest rates are already at zero, that's bad news for Irish house prices going forward as potential buyers will be approved for lower value mortgages.

If inflation rises just in Ireland, we will become even more uncompetitive relative to our eurozone trading partners. Exporting businesses will close or leave and this is also bad news for Irish house prices going forward.

If inflation rises across the eurozone, interest rates will rise and this is also bad news for Irish house prices going forward.

Inflation or deflation, I believe it's bad news all round for Irish house prices going forward.

I could be wrong.

Rossvet

By "bad news" do you mean that they wont be rising like mad?
That would surely be good news as it will help young people buy houses father than being priced out.

Springy Turf

Rossvet wrote: »

By "bad news" do you mean that they wont be rising like mad?
That would surely be good news as it will help young people buy houses father than being priced out.

Not necessarily. This could give rise to a situation where cash buyers / value investors might see value at a higher price point then is affordable to your typical mortgage dependant FTB.

A big recession with job losses suits only a very small group of people. The people who think they won't be touched in a mega recession / housing crash scenario are delusional. There would be many more losers than winners.

Assetbacked

The S&P 500 is down a few percent today with the big tech stocks . The thing is that it is likely to continue to correct; Apple phones, Tesla cars, Netflix new shows etc. aren't subject to increased demand the past few weeks but the stocks have been climbing like crazy. It appears to have been a bit of a dead cat bounce of a recovery aided by QE and this hysteria has run its course. The problem is that a 20% correction in the stock market isn't anything scary considering how high it has climbed but it will lead to panic selling and could start a chain reaction in the system. The "W" shaped recovery is likely to be the outcome with covid and we are going to start moving into that 2nd dip. Perhaps this recession talk might start to be seen in more job losses outside of the airline, tourism and retail sectors as well as asset price declines. It's going to be a bumpy few months as we are at the tail end of the covid crisis and returning to normal - buckle up!

hometruths

Springy Turf wrote: »

Not necessarily. This could give rise to a situation where cash buyers / value investors might see value at a higher price point then is affordable to your typical mortgage dependant FTB.

A big recession with job losses suits only a very small group of people. The people who think they won't be touched in a mega recession / housing crash scenario are delusional. There would be many more losers than winners.

Surely it will suit those people who are in secure employment and can comfortably afford to take on a mortgage?

i.e the banks will lend less, because there are less people in employment, but they will continue to lend affordable mortgages to people with secure incomes.