Irish Property Market 2020 Part 2

Cyrus

PropQueries wrote: »

I think it will come down to who moves first. While I'm not saying I have any knowledge of how well the new builds will sell over the coming 6 weeks, which is a very important selling period, if the developers listed on the stock market see little movement, they may initiate price cuts as they need to show sales and that their existing stock is moving. It will be all about first mover advantage. Then the rest generally follow up fairly fast.

if you have been following cairn for example you will note they have been extremely slow to drop prices,

albany in killiney being an example.

fliball123

Villa05 wrote: »

The reasons you state for price stability/appreciation are the very same reasons why the prices will collapse

State paying stupid money for social/affordable housing propping up prices and rents in the private sector. This is happening despite the state having the capacity to provide housing at a fraction of the cost and deliver housing while generating significant profit for the state

No repossessions meaning mortgage lending is no longer secured lending. This will mean banks will go bankrupt again in a downturn as they stiil have all there eggs in the property basket

ok so you reckon the government will pull all support from the property market , cant see it happening not currently I doubt they would pull that trigger considering the effect it would have on the average person on a day to day basis, it has been like this for at least a decade and it would be political suicide for any party who did what your saying

OwlsZat

Bass Reeves wrote: »

How many houses were build from 2008-2018. usually what happen's is everybody gets the jitters. A lot of small subbies were left with massive unpaid building work as were builders providers.

if you are 10 people working for you maybe a 500K wage bill every year, you be getting jittery if houses are not being build. In 2008/9 subbies continued keeping crews together because labour was scarce pre 2007. I know one lad that was left with a 250K personal debt he was not incoporated his business never recovered he had to go down the insolvency route.

Government has steadfastly refused to reduce building Vat and costs for the last 10 years they will not start now

Should have setup his business properly. After the last collapse I don't think many will be caught as under prepared again. Recency bias and all that!

brisan

Villa05 wrote: »

I'd be shocked if these are for regular resedential given their location near the point, Aviva and Luas link to IFSC and beyond. These will be converted to short term let for transient workers and concert/sporting events. Far more financially lucrative than students, resedential letting

Oils you name these concert sporting events. ??
I can’t see any of these happening g for the next 2 years.

hometruths

awec wrote: »

Don’t think there were too many saying that prices would be driven up rurally! Half price houses everywhere was the message on here!

I did suggest this but of course there were those saying it couldn’t possibly happen.

Back in May I started a thread on exactly this question - "Long term WFH and impact on property" - saying we would we see prices narrow between city/commuter and rural areas. i.e would prices in city/commuter areas fall and rural prices rise.

We didn't get very far in the impact on property discussion because it turned into a debate about WFH, plenty of posters saying there wold be no impact because WFH would be a flash in the pan.

I started the thread because I thought it would be an interesting discussion after I posted this on the main thread (actually in reply to one of your posts):

schmittel wrote: »

How will it affect property?

Rents and sales prices will fall in Dublin. Whilst Dublin will always be at a premium the differential between Dublin and the rest of the country will narrow.

There have been a number of posters predicting exactly this would come to pass, but their views have been rubbished by many. Sadly this has thwarted an interesting discussion on the subject.

Graham

Pity indeed schmittel, I think we're only sniffing the start of a shift to WFH for some sectors.

I don't expect it to be a majority thing but I do expect it to be noticeable.

hometruths

Graham wrote: »

Pity indeed schmittel, I think we're only sniffing the start of a shift to WFH for some sectors.

I don't expect it to be a majority thing but I do expect it to be noticeable.

Exactly, nobody has ever suggested that Dubliners are going to vacate the city en masse, but there will undoubtedly be a shift.

As prices are set on the margin, it does not need to be a very big shift in demand to have a very noticeable effect on prices.

It will also have a range of knock on effects on other businesses and housing requirements in cities.

Ultimately I think it will lead to a significant oversupply of 3/4 bed family homes in Dublin suburbs, which is in danger of being compounded by the clamour to build our way out of the current housing shortage.

That's another discussion that is difficult to get off the ground!

Walnut Salad

Anecdotal I know but I know 2 people from Dublin that are doing their work-from-home abroad while their office is closed. One is in the UK and one in France. Both are doing IT work. I am not even sure that their company knows where they are living now.

Villa05

fliball123 wrote:

ok so you reckon the government will pull all support from the property market , cant see it happening not currently I doubt they would pull that trigger considering the effect it would have on the average person on a day to day basis, it has been like this for at least a decade and it would be political suicide for any party who did what your saying

No, I reckon the electorate will pull support from the government (which to date have been a disaster, won't last long) in favour of a government that can deliver required housing in an efficient manner. The proportion of the electorate that are renting plus those that own but are impacted by high rents through their children being priced out of the market is at a tipping point.

Either the Gov changes policy or the government changes.

Cyrus

Villa05 wrote: »

No, I reckon the electorate will pull support from the government (which to date have been a disaster, won't last long) in favour of a government that can deliver required housing in an efficient manner.

and who might that be?

PropQueries

schmittel wrote: »

Exactly, nobody has ever suggested that Dubliners are going to vacate the city en masse, but there will undoubtedly be a shift.

As prices are set on the margin, it does not need to be a very big shift in demand to have a very noticeable effect on prices.

It will also have a range of knock on effects on other businesses and housing requirements in cities.

Ultimately I think it will lead to a significant oversupply of 3/4 bed family homes in Dublin suburbs, which is in danger of being compounded by the clamour to build our way out of the current housing shortage.

That's another discussion that is difficult to get off the ground!

I think you're right on the 3/4 bed family homes. I think that the main impact from WFH options is that it puts the sellers of city homes and any potential buyers on a more equal footing.

Potential buyers may now have very real options in relation to city vs rural living. While most people would probably prefer to live near a city for obvious reasons, they may now decide that the extra borrowings are no longer worth it, even if they are approved for a certain mortgage amount. This may then lower the number of bidders at certain price points.

Draco

Walnut Salad wrote: »

Anecdotal I know but I know 2 people from Dublin that are doing their work-from-home abroad while their office is closed. One is in the UK and one in France. Both are doing IT work. I am not even sure that their company knows where they are living now.

There's a tax liability issue there that can cause a whole heap of issues for both the employer and employee. It's not as simple as just working where you want. There's going to be a lot of people bitten in the ass with this I suspect.

Villa05

brisan wrote:

Oils you name these concert sporting events. ?? I can’t see any of these happening g for the next 2 years.

How long does a change of use planning application take?
If we are 2 years away from concerts and sporting events returning, we have much bigger things to be worrying about given the wider implications for the economy

Pelezico

Draco wrote: »

There's a tax liability issue there that can cause a whole heap of issues for both the employer and employee. It's not as simple as just working where you want. There's going to be a lot of people bitten in the ass with this I suspect.

That is right. They will become liable for tax in their country of residence. However, there are tax treaties and Ireland has very high rates of tax.

But it is an issue.

Cyrus

Pelezico wrote: »

That is right. They will become liable for tax in their country of residence. However, there are tax treaties and Ireland has very high rates of tax.

But it is an issue.

It’s more of an issue for the employer and issues around permanent establishment etc

Bass Reeves

Cyrus wrote: »

It’s more of an issue for the employer and issues around permanent establishment etc

A lot of people do not realize this. If they become libel for tax in there own country the employer must pay local social insurance and tax. The company may need to register there as well. it may also make the company libel for corportaion tax in that country for any profits that may accru due to the employee's work there.

It is quite likely that employers may insist on employees being resident in Ireland when they are employed by them

The_Conductor

Bass Reeves wrote: »

A lot of people do not realize this. If they become libel for tax in there own country the employer must pay local social insurance and tax. The company may need to register there as well. it may also make the company libel for corportaion tax in that country for any profits that may accru due to the employee's work there.

Most people who do so- do so without the knowledge of their employer.
Offhand of the Irish I know of- I can name at least 5 IT contractors, a few financial consultants and at least one tax consultant- all of whom are working in Lisbon (and regularly meetup with one another over there).
Its a lot more common than people realise.

Pop on a VPN and you can be where-ever you want to be.........

Cyrus

The_Conductor wrote: »

Most people who do so- do so without the knowledge of their employer.
Offhand of the Irish I know of- I can name at least 5 IT contractors, a few financial consultants and at least one tax consultant- all of whom are working in Lisbon (and regularly meetup with one another over there).
Its a lot more common than people realise.

Pop on a VPN and you can be where-ever you want to be.........

Whatever way they do it isn’t a defence for either party , could be a nasty issue .

GreeBo

Cyrus wrote: »

Whatever way they do it isn’t a defence for either party , could be a nasty issue .

Huge tax implications for the company.

So many companies are tax resident in Ireland for the corporation rate and funnel lots of revenue through Ireland. All of that becomes liable for tax in the other country if someone is working from there, even if that company already has a residence there.

Villa05

Austria! wrote:

We need more people per sq metre to solve housing.

Austria! wrote:

Am I missing something?

By maximising the amount of people you can fit into sq meter you are driving up the return that can be achieved on land. The main cause of the housing affordability crisis is the price of development land
The accomodation being built is short term and while I agree it has a place in the market it is poor quality and still expensive for what you are getting

With the market driven building I would be fearful that developers would push for this type of development given the higher returns initially.
However this is not the solution to what most people need

Pelezico

GreeBo wrote: »

Huge tax implications for the company.

So many companies are tax resident in Ireland for the corporation rate and funnel lots of revenue through Ireland. All of that becomes liable for tax in the other country if someone is working from there, even if that company already has a residence there.

You know what...I doubt if it that simple.


Now ..back to the topic.

Bass Reeves

The_Conductor wrote: »

Most people who do so- do so without the knowledge of their employer.
Offhand of the Irish I know of- I can name at least 5 IT contractors, a few financial consultants and at least one tax consultant- all of whom are working in Lisbon (and regularly meetup with one another over there).
Its a lot more common than people realise.

Pop on a VPN and you can be where-ever you want to be.........

At present it is not included in contracts as even if you were WFH technically you base was where you were employed from and the company could request you to work from the office ant any time. However now with WFH your home becomes you base of employment in that case technically your employer should be paying your tax and social insurance from that location.

Contractors and Consultants are different as they are not directly employed by the company. They are on a contract to provide a service to the company. just like any company across can bid for Government contracts the same applies for private companies. It up to the contracting party to be tax compliant unless contracting is used for tax avoidance reasons by the company and employer

Bass Reeves

Pelezico wrote: »

You know what...I doubt if it that simple.


Now ..back to the topic.

I am afraid it is that simple

Pelezico

Bass Reeves wrote: »

I am afraid it is that simple

I doubt if Apple could become liable for tax in Belgium on its Irish profits because one IT consultant chose to work there during lockdown.

Not sure what any of this has to do with house prices.

Cyrus

Pelezico wrote: »

You know what...I doubt if it that simple.


Now ..back to the topic.

It’s pretty simple

And the topic for you seems to be a house for your son

Pelezico

Cyrus wrote: »

It’s pretty simple

And the topic for you seems to be a house for your son

Now you are on message. I want to talk about a house at a discount to the market for 400k.

Oh and it must be three bedroom.

Bass Reeves

Pelezico wrote: »

I doubt if Apple could become liable for tax in Belgium on its Irish profits because one IT consultant chose to work there during lockdown.

Not sure what any of this has to do with house prices.

As I posted Consultants/contractors if genuinely that, then they are not an issue. However it more the idea that Apple or Google will allow thousands of employees who are WFH to live in countries other than Ireland. If they do then they will be libel for tax and social insurance in that country, they must register as an employer there. From there the question of VAT on work they do and how profits are taxed comes into play.

Pelezico

Bass Reeves wrote: »

As I posted Consultants/contractors if genuinely that, then they are not an issue. However it more the idea that Apple or Google will allow thousands of employees who are WFH to live in countries other than Ireland. If they do then they will be libel for tax and social insurance in that country, they must register as an employer there. From there the question of VAT on work they do and how profits are taxed comes into play.

Liable or libel. Which is it?

This really matters and you should know difference if you are offering free tax advice .

Bass Reeves

Pelezico wrote: »

Liable or libel. Which is it?

This really matters and you should know difference if you are offering free tax advice .

liable as in have to pay tax for those employees in that country I am not offering free tax advice. I am making the point that people who work for home who are directly employed by an employer will find in there contracts that they are obliged to carry out there work in the country where the company operates from. That will require them to have a home/living space in Ireland

Cyrus

Pelezico wrote: »

Liable or libel. Which is it?

This really matters and you should know difference if you are offering free tax advice .

That’s a bit smart, you know what he meant. And despite your scepticism this is a very real risk for a lot of companies. Even pre Covid.

Spain is an especially aggressive jurisdiction