Irish Property Market 2020 Part 2

fliball123

KennisWhale wrote: »

It's terrifying how heavily involved in the property market the State is, like some glue holding it together. The question is whether it is held together by the State with super glue or pritt stick? There is no endless money supply for the State to carry out current practices such as help the brickie, giving huge money to private landlords for an ever growing group of people that need rental support. I'm sure there will come a time when the growing cost of these subsidies to the market are weighed against a dwindling tax take and higher costs for international market borrowing with such housing market flotation devices needing to be eased.

I would agree with you at the end of the day its our tax euros that is being used to pay for it all, but there seems to be an awful lot of people leaning towards the left point of view the last election would be a good indicator with SF getting their highest return ever on a platform of more housing for the poor. How would you see this situation being reversed

KennisWhale

fliball123 wrote: »

I would agree with you at the end of the day its our tax euros that is being used to pay for it all, but there seems to be an awful lot of people leaning towards the left point of view the last election would be a good indicator with SF getting their highest return ever on a platform of more housing for the poor. How would you see this situation being reversed

Housing costs, mainly rent for the younger people, dropping significantly (40%+ from March averages), would steer them away from SF. I assume there's plenty of home owning parents with kids living at home that are also sick of the housing situation who are considering SF so they would be steered away.

Hubertj

KennisWhale wrote: »

It's terrifying how heavily involved in the property market the State is, like some glue holding it together. The question is whether it is held together by the State with super glue or pritt stick? There is no endless money supply for the State to carry out current practices such as help the brickie, giving huge money to private landlords for an ever growing group of people that need rental support. I'm sure there will come a time when the growing cost of these subsidies to the market are weighed against a dwindling tax take and higher costs for international market borrowing with such housing market flotation devices needing to be eased.

good point, it would be interesting to understand how many FTBers the government is cutting out of market. Then factor is what would happen if they start to build more social housing themselves - this would be contracted out so what would this do in relation to capacity of private sector.
There is clearly a requirement for accommodation - private, social, etc - so what is the demand / supply impact if government is not so heavily invested.

fliball123

KennisWhale wrote: »

Housing costs, mainly rent for the younger people, dropping significantly (40%+ from March averages), would steer them away from SF. I assume there's plenty of home owning parents with kids living at home that are also sick of the housing situation who are considering SF so they would be steered away.

Well do you think that landlords would be happy to accept a 40% after signing a contract for the rates agreed for 20 years + I just don't see it happening in my lifetime as I said things that are given are very hard to take away this has always been the case with the Irish state, you only have to look at the high rate of welfare and the ps pay and pensions they had an opportunity in the last recession to trim the fat and they did very little with regards to the spend side in the country.

KennisWhale

fliball123 wrote: »

Well do you think that landlords would be happy to accept a 40% after signing a contract for the rates agreed for 20 years + I just don't see it happening in my lifetime as I said things that are given are very hard to take away this has always been the case with the Irish state, you only have to look at the high rate of welfare and the ps pay and pensions they had an opportunity in the last recession to trim the fat and they did very little with regards to the spend side in the country.

It's not about what is likely to happen under FF and FG but what I see as a big driver for people to vote for SF. FG will talk about the recovery from 2013 and how strong the economy is, yet something is wrong if young people flocked to SF. We are lucky in Ireland we don't have any right wing types making any headway politically (despite what certain Twitterati who also feature in the media would like to have you believe) but we have gone towards the left. Housing costs are what I see as the single biggest driver for voter dissatisfaction and dropping them significantly is the only way to get voters away from SF.

Idbatterim

Fg policy has been to give away housing to those that would never vote for them, while crucifying their own voters with rip off prices. Many ex fg voters deflecting to sf. Cutting income tax by less than a euro a week a few budgets ago, during a boom, if you earned just below the marginal rate. While the cost of accomodation skyrockets, you couldnt make it up... all the media seem interested in is free houses for wasters and the givernment then actually believe that the revolt over housing is about that, it isnt. Its about working people being robbed blind for a roof over their head, not sympathy for margaret cash and the legions of workshy wasters in this country...

brisan

Graham wrote: »

Mod Note

folks, there's a dedicated forum for the discussion of Coronavirus (COVID-19) if you'd like to continue that discussion.

Thats not a place anyone with any interest in maintaining their sanity wants to visit

ExMachina1000

KennisWhale wrote: »

The famous line, "this time it's different". I love the optimism, he should replace Tony Holohan as CMO.

Why would house prices fall? Is it not an asset that hedges against inflation and more importantly houses are in short supply.

I don't see why prices would fall. What am I missing

brisan

fliball123 wrote: »

No not really I showed you that we have quite a high number of people in the 24 to 45 range a good % of these would be first time and second time buyers.

Also a lot marriages and relationships have hit the skids over the pandemic not just here but worldwide, Nothing worse than having to stay at home with your wife and kids 24/7 to put you in bad form but trying to be serious there has been a lot of breakups over the last year.

So now if the family unit is splintered and not even taking the older kids (24+) who would like their own pad this family unit will now need 2 properties one for dad and one for mum so its not a zero sum game anymore. Below are just a few links out of dozens about breakups during corona.

https://boycekelly.ie/divorce-rates-expected-to-spike-during-coronavirus-lockdown/

https://www.irishexaminer.com/news/arid-30993808.html

https://www.bbc.com/news/uk-northern-ireland-53327738

https://www.psychologytoday.com/ie/blog/happy-singlehood/202007/why-many-marriages-may-not-survive-second-wave

https://www.insider.com/what-its-like-to-go-through-breakup-during-coronavirus-pandemic-2020-4

https://www.irishtimes.com/life-and-style/health-family/has-the-lockdown-changed-how-you-view-your-relationship-1.4271562

The chances of a divorced couple both buying houses are slim

brisan

fliball123 wrote: »

I would agree with you at the end of the day its our tax euros that is being used to pay for it all, but there seems to be an awful lot of people leaning towards the left point of view the last election would be a good indicator with SF getting their highest return ever on a platform of more housing for the poor. How would you see this situation being reversed

The magical money tree that SF were going to borrow from and that FFG said did not exist has suddenly been found during the pandemic
SF will use this to their advantage
They will say they can borrow 5b a year
Build 25000 houses at 200k on state land
Sell 20,00 at 250k and rinse and repeat
Much easier to borrow for houses that for Social welfare payments
It will capture the imagination of the young people and may succeed
SF policies on housing MAY not work
FG policies on housing DO NOT work
The young people may take the chance

KennisWhale

ExMachina1000 wrote: »

Why would house prices fall? Is it not an asset that hedges against inflation and more importantly houses are in short supply.

I don't see why prices would fall. What am I missing

I can argue why they "could" fall but I was more about just highlighting the infamous phrase in an article talking about "surging" house prices!

thefridge2006

Billythekid19 wrote: »

We dont have any immigration but we dont have any emigration either.
There are a huge amount of ex air b and b's on daft.ie as it happens, they are just looking for 2 grand for 1 and 2 bed apartments and not getting any tenants in. Paying a mortgage is still significantly cheaper than renting a house so demand for properties remains high.
This might change somewhat when rent prices drop in early 2021

Give it time..... air B&B owners can't do that for too long. They are small investors mainly and mortgages will have to be paid...the rental market will become a very bad investment very soon and then they will sell.

fliball123

brisan wrote: »

The chances of a divorced couple both buying houses are slim

True but if one has to rent it will start showing on the rental market

Hubertj

thefridge2006 wrote: »

Give it time..... air B&B owners can't do that for too long. They are small investors mainly and mortgages will have to be paid...the rental market will become a very bad investment very soon and then they will sell.

As I understand it there were/are a lot of cash buyers for investment properties? If they sell what other assets are a viable investment? I also read that mortgage payments are significantly less than rent? Therefore, many landlords can absorb reduced rent?
And if the rental market is going to become a bad investment very soon who will buy? I presume there aren’t enough potential owner occupiers?

brisan

fliball123 wrote: »

True but if one has to rent it will start showing on the rental market

Not if its rent a room
Divorce is an expensive business
I know one chap who got divorced and his legal bill was 14k
That included solicitor ,Barrister, Actuary for a report on the value of his pension and other costs
His wife's bill was 11k
She could not afford to buy him out and either could he
She stayed in the house and she has to pay him a fixed sum in the next few years ,plus she has to service the mortgage
Rent a room is all he can afford after paying child maintenance

thefridge2006

fliball123 wrote: »

Well the only thing I will say about your comment is that yes we will see anything can happen. But someone with a rental and having difficulty renting it out currently has the final option of giving their property to the government and getting 80/85% of the rental value for 20 years + , not sure where you would get that with other investments these days a state guarantee ROI and your property back to you the way you gave it to them. So while that is still an option and judging by the constant moaning from the left about the need for housing this option is going nowhere fast.

Correct me if I'm wrong, but I think you get 80/85% of market value at the time....as in you will be forfeiting 15/20% of the full market value ( on an already much lower market... )so an investor who is struggling to make money from the investment already is hardly going to take an extra 15/20% reduction on their investment...

brisan

Hubertj wrote: »

As I understand it there were/are a lot of cash buyers for investment properties? If they sell what other assets are a viable investment? I also read that mortgage payments are significantly less than rent? Therefore, many landlords can absorb reduced rent?
And if the rental market is going to become a bad investment very soon who will buy? I presume there aren’t enough potential owner occupiers?

They still have to pay 50% tax on the reduced rent plus other costs

silver2020

brisan wrote: »

They still have to pay 50% tax on the reduced rent plus other costs

a lot of landlords buy property through their pensions - mostly company directors through ssap's

All rental income and any value increase if you sell the property goes tax free into the pension

You also can borrow up to 50% of the value.


This is becoming a strong part of the market and quite a stable one.

thefridge2006

Hubertj wrote: »

As I understand it there were/are a lot of cash buyers for investment properties? If they sell what other assets are a viable investment? I also read that mortgage payments are significantly less than rent? Therefore, many landlords can absorb reduced rent?
And if the rental market is going to become a bad investment very soon who will buy? I presume there aren’t enough potential owner occupiers?

As I understand it there were/are a lot of cash buyers for investment properties?Dont think so, i might be wrong but i think someone put up an article here a few days ago about the boom times etc being mainly BTL mortages

I also read that mortgage payments are significantly less than rent? Not when a land lord has to pay 50% tax on the rent they receive.

if the rental market is going to become a bad investment very soon who will buy? I presume there aren’t enough potential owner occupiers? I would say there are buyers about to be honest or other future investers

JimmyVik

thefridge2006 wrote: »

Give it time..... air B&B owners can't do that for too long. They are small investors mainly and mortgages will have to be paid...the rental market will become a very bad investment very soon and then they will sell.

They are selling already.
Have been for a few years now.

JimmyVik

thefridge2006 wrote: »

Correct me if I'm wrong, but I think you get 80/85% of market value at the time....as in you will be forfeiting 15/20% of the full market value ( on an already much lower market... )so an investor who is struggling to make money from the investment already is hardly going to take an extra 15/20% reduction on their investment...

If they pay an agent 10% and revenue 50%, then 15 - 20% below market rate seems ideal to me. They might be losing out by a few % but id go for it if i was in that position.

lalababa

Apropos house prices: looking at some houses (new ,old,and indifferent) in touristy spots Kerry on the PPR recent transactions and trying to find their asking prices through casche d daft & my home etc.
Many sizable differences...10 to 20%.
Tiny sample of course but all I could find in 20mins.

Timing belt

Ulster bank update as per Q3 results

‘Our strategy to grow our Ulster Bank business in the Republic of Ireland organically and safely remains unchanged. We continue to evaluate the impact of Covid-19 and the challenges to the economy and we are reviewing our strategy appropriately and responsibly in light of these events.
In the event of any changes being made to our strategy, these would be undertaken with full consideration of any impact on customers, colleagues and shareholders in the first instance. Our priority now is to continue to remain focused on supporting our colleagues in serving our customers in these difficult times.
As at Q3 2020, Ulster Bank RoI had approved over 17,000 payment breaks and, of those who have rolled off their initial payment break, approximately 46% have opted for a second payment break, representing around 8% of the lending book by value.’

Idbatterim

Lads, the government renting out entire luxury apartnent blocks on a long term lease, at extortionate rates, from vulture funds who pay little or no tax... ive been interested in this subject for years. I am still trying to get my head around how fcuked the situation here is, how immoral and corrupt it is. How they have gotten away with it this long and continue too. This is going to end at some point !

Timing belt

Aib Q3 note on payment breaks

Payment breaks
We continue to engage with our customers and monitor the credit quality of those loans currently on payment breaks or subject to modification. We remain vigilant to the risk of downward stage migration on the expiry of the payment break periods.
In total we granted c. 66,000 payment breaks in Retail Banking and they have evolved (as at 16 Oct) as follows:
 3% remain on payment break 1
 60% rolled off payment break 1 without availing of payment break 2 – over 90% have returned to
normalised payment schedules
 37% rolled on to payment break 2 of which:
o 23%remainonpaymentbreak2 o 14%rolledoffpaymentbreak2.
3

Overall this level of roll-off has proved better than originally anticipated and c. 96% of payment break 2 are due to reach their expiry period by the end of 2020. AIB is in continual contact with customers to understand if any further support measures may be required beyond this point.
The return to contracted payment terms by those customers who availed of payment breaks in our Corporate, Institutional & Business Banking (CIB) has similarly been better than expected. In the UK, over 90% of payment breaks granted have returned to normalised payment schedules.

L1011

Idbatterim wrote: »

Lads, the government renting out entire luxury apartnent blocks on a long term lease, at extortionate rates, from vulture funds who pay little or no tax... ive been interested in this subject for years. I am still trying to get my head around how fcuked the situation here is, how immoral and corrupt it is. How they have gotten away with it this long and continue too. This is going to end at some point !

They're doing this because of successive Governments failures to build social housing - the last significant building was done in the 93-97 period.

thefridge2006

JimmyVik wrote: »

If they pay an agent 10% and revenue 50%, then 15 - 20% below market rate seems ideal to me. They might be losing out by a few % but id go for it if i was in that position.

An agent might only be paid after they find you a tenant(once off payment) and the 50% will still need to be paid on the money received from the Council.....

Just because the money is coming from the Council, doesn't mean its tax exempt.

fliball123

JimmyVik wrote: »

If they pay an agent 10% and revenue 50%, then 15 - 20% below market rate seems ideal to me. They might be losing out by a few % but id go for it if i was in that position.

Thats it your also forgetting to add in the government have to look after the upkeep in both the house (so painting , cutting the grass, etc) and the furniture so if the washing machine blows up they replace it and then they have to give the house back to you in 20+ years..This is a very attractive offer. No worrying about Covid and not getting rent or renters doing a runner or wrecking the place. The landlord can also write off 100% of mortgage interest as well

fliball123

thefridge2006 wrote: »

An agent might only be paid after they find you a tenant(once off payment) and the 50% will still need to be paid on the money received from the Council.....

Just because the money is coming from the Council, doesn't mean its tax exempt.

emm no thats not true at least from my experience the EA looks after the property for you. The landlord doesnt interact with the tenant so if they sign a year rent then they renew through the EA so they get their one month out of every year for managing the property for you. Or at least that is how it was when I was renting many years ago, it may have changed

JimmyVik

lalababa wrote: »

Apropos house prices: looking at some houses (new ,old,and indifferent) in touristy spots Kerry on the PPR recent transactions and trying to find their asking prices through casche d daft & my home etc.
Many sizable differences...10 to 20%.
Tiny sample of course but all I could find in 20mins.

10% to 20% down or up?
Can you link some examples?