Irish Property Market 2020 Part 3

Etc

brisan wrote: »

have you worked there
Its been in operation for close on 50 yrs at this stage under different owners

Let's just say I'm familiar with the plant and company

Bits_n_Bobs

brisan wrote: »

There is a very good reason most of those houses are empty ............no one wants to live in them
Sharon the lone parent of 3 children from 3 unknown fathers from somewhere in Dublin certainly does not
She wants a house down the road from her ma

This is just offensive. What's your exact issue with 'Sharon'? Is it that she's

A) a she
a single parent
C) lower social class (as evidenced by the 'ma' rather than your preferred 'mumsie' presumably)

Regar, post stinks of bigotry

Pelezico

Bits_n_Bobs wrote: »

This is just offensive. What's your exact issue with 'Sharon'? Is it that she's

A) a she
a single parent
C) lower social class (as evidenced by the 'ma' rather than your preferred 'mumsie' presumably)

Regar, post stinks of bigotry

Why are you so precious about this? It seems pretty accurate to me.

Timing belt

schmittel wrote: »

Getting South Dublin City at 10.9% from the CSO as linked earlier in the thread.

I have had a quick look at the data set from CSO and can see the following:


The 10% figure for Dublin South will be included within the Dublin City Data and this is a summary of the vacant data from the 2016 Census.

Hubertj

Timing belt wrote: »

I have had a quick look at the data set from CSO and can see the following:


The 10% figure for Dublin South will be included within the Dublin City Data and this is a summary of the vacant data from the 2016 Census.

Some interesting numbers. I live in pembroke and surprised it is so high. There are the obvious developments on shelbourne and lansdowne road then some houses on Elgin, raglan, Wellington etc but that’s a surprising number. Does it also include local authorities houses that are boarded up etc?

Also, what housing stick would be in area of mansion house? York st, mercer st etc?

hometruths

Timing belt wrote: »

I have had a quick look at the data set from CSO and can see the following:


The 10% figure for Dublin South will be included within the Dublin City Data and this is a summary of the vacant data from the 2016 Census.

Thanks. Fair play to you. There is your breakdown by location.

A few figures jump out there:

Pembroke 13%
Rathmines 11%
Royal Exchange 27%
South Dock 17%
St Kevin's 15%
Wood Quay 14%
Terenure 7%
Rathfarnham 11%

These are prime areas, undoubtedly in demand. We are about as far away from the arse end of Leitrim as you can get.

I have not seen that level of detail before and even I am surprised at those numbers. It is yet another example of when I first saw the headline figures from the 2016 census they just did not sit right. And the more I learn about it, and the greater detail you get into in the figures the more I become convinced that we have a vacancy problem, not a stock problem.

Any chance you can give us the same detail for SCD? I'd expect the %s to be significantly lower but would love to see what they are in terms of the different areas. I think you'll find the closer you are to the city/coast the higher the vacancy rate will be.

hometruths

schmittel wrote: »

Any chance you can give us the same detail for SCD? I'd expect the %s to be significantly lower but would love to see what they are in terms of the different areas. I think you'll find the closer you are to the city/coast the higher the vacancy rate will be.

Actually I think it would be DLR that covers close to city and coast.

hometruths

Hubertj wrote: »

Also, what housing stick would be in area of mansion house? York st, mercer st etc?

TDs pied a terres!

Here's a map - https://www.localenterprise.ie/DublinCity/Start-or-Grow-your-Business/Starting-a-Business/Dublin-City-Boundaries/dccboundaries.pdf

Timing belt

Hubertj wrote: »

Some interesting numbers. I live in pembroke and surprised it is so high. There are the obvious developments on shelbourne and lansdowne road then some houses on Elgin, raglan, Wellington etc but that’s a surprising number. Does it also include local authorities houses that are boarded up etc?

Also, what housing stick would be in area of mansion house? York st, mercer st etc?

Its based on Electoral Division all I did was group them by area so included in Pembroke is the following:

Hubertj

schmittel wrote: »

TDs pied a terres!

Here's a map - https://www.localenterprise.ie/DublinCity/Start-or-Grow-your-Business/Starting-a-Business/Dublin-City-Boundaries/dccboundaries.pdf

The plot thickens!

hometruths

Hubertj wrote: »

The plot thickens!

In fairness to TDs if they're keeping flats in Dublin because of working a few days a week in the Dail that sort of thing you'd expect be in the first 6% of vacancies i.e the normal base rate.

Timing belt

schmittel wrote: »

Actually I think it would be DLR that covers close to city and coast.

Here is the Summary for DLR:

hometruths

Timing belt wrote: »

Here is the Summary for DLR:

Thanks, much appreciated.

Tibradden looks like an outlier, but apart from that as expected - the prime areas have the highest vacancy rates.

Timing belt

schmittel wrote: »

Thanks, much appreciated.

Tibradden looks like an outlier, but apart from that as expected - the prime areas have the highest vacancy rates.

Which is what you would expect as a top end property may be vacant for a long period waiting to sell or to Rent it.

hometruths

Timing belt wrote: »

Which is what you would expect as a top end property may be vacant for a long period waiting to sell or to Rent it.

The majority of these properties are not for sale or for rent.

Timing belt

Hubertj wrote: »

Some interesting numbers. I live in pembroke and surprised it is so high. There are the obvious developments on shelbourne and lansdowne road then some houses on Elgin, raglan, Wellington etc but that’s a surprising number. Does it also include local authorities houses that are boarded up etc?

Also, what housing stick would be in area of mansion house? York st, mercer st etc?

The following is the breakdown of the reason for the vacancy:


Source: https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/vac/

Definition of a vacant property in the 2016 census:

Vacant Dwellings and Holiday Homes
In identifying vacant dwellings, enumerators were instructed to look for signs that the dwelling was not occupied e.g. no furniture, no cars outside, junk mail accumulating, overgrown garden etc., and to find out from neighbours whether it was vacant or not. It was not sufficient to classify a dwelling as vacant after one or two visits. Similar precautions were also taken before classifying holiday homes.

Holiday homes are categorised as dwellings that are only occasionally occupied. While they are mainly found in rural areas (particularly along the coastline), holiday homes could also consist of city apartments used for weekend breaks etc. Before indicating that a dwelling was a holiday home, enumerators were instructed to call to the dwelling several times prior to Census Night and at various call times. Enumerators were advised to consult with neighbours as to whether a dwelling was used as a holiday home.

When the enumerator had clear information that a dwelling was used as a holiday home the dwelling status was recorded as “Holiday home” in their enumerator record book (ERB).

Dwellings under construction and derelict properties were not included in the count of vacant dwellings. As a result the empty housing units were classified as vacant house, vacant apartment or holiday home only if the dwelling was considered fit for habitation by the enumerator. In the case of newly constructed dwellings, that meant that the roof, doors, windows or walls had to be completely built or installed. For older dwellings that were unoccupied the roof, doors and windows had to be fully intact.

Source: https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/bgn/

Timing belt

schmittel wrote: »

The majority of these properties are not for sale or for rent.

How do we know that granular level of detail is not shared by area by the CSO.

What we do know is that 10% of the vacant properties in Dublin are for sale 13% for rent, 5% relate to Probate, 6% are new builds are renovations.

That accounts for 1/3 of the vacant properties and if you extrapolated that split to the other category it would account for 50% of the vacant properties recorded.

hometruths

Timing belt wrote: »

How do we know that granular level of detail is not shared by area by the CSO.

Are you talking about a specific area? i.e the high end? Either way I would still make the claim that the majority of these properties were not for sale or rent in South Dublin City, DLR or simply Dalkey.

It's just common sense because it is simply not a credible claim that these vacancy rates can be explained by properties predominantly either for sale or rent.

Timing belt

schmittel wrote: »

Are you talking about a specific area? i.e the high end? Either way I would still make the claim that the majority of these properties were not for sale or rent in South Dublin City, DLR or simply Dalkey.

It's just common sense because it is simply not a credible claim that these vacancy rates can be explained by properties predominantly either for sale or rent.

For sale account for 10% and rent 13% see updated post above

Cyrus

schmittel wrote: »

Are you talking about a specific area? i.e the high end? Either way I would still make the claim that the majority of these properties were not for sale or rent in South Dublin City, DLR or simply Dalkey.

It's just common sense because it is simply not a credible claim that these vacancy rates can be explained by properties predominantly either for sale or rent.

So what are they ? Do you think ?

hometruths

Timing belt wrote: »

How do we know that granular level of detail is not shared by area by the CSO.

What we do know is that 10% of the vacant properties in Dublin are for sale 13% for rent, 5% relate to Probate, 6% are new builds are renovations.

That accounts for 1/3 of the vacant properties and if you extrapolated that split to the other category it would account for 50% of the vacant properties recorded.

Interestingly enough that is the same extrapolation Geodirectory uses.

We've been down this road before. Let's take South Dublin City as an example.

If at census time the vacancy rate of South Dublin City was 11% and 50% of those properties were either for sale or for rent then obviously the supply for sale or rent in South Dublin City was 5.5% of all housing stock.

This is healthy supply. But the myhome and daft reports for same period were reporting very tight supply for sale and record low supply for rent.

So something is wrong. Either it is the claims of tight supply on the market or the reasons given for the vacancies.

ETA - i see probate and renos and new builds are in there, so it os not quite 5.5% but it still remains healthy supply.

hometruths

Cyrus wrote: »

So what are they ? Do you think ?

I've been through these reasons before in detail - most of them relate to the combination of opportunity costs, RPZ measures, taxation, Airbnb and arrears. Though that is obviously all speculation on my part based on anecdotal evidence. I don't know for sure.

Timing belt

schmittel wrote: »

Interestingly enough that is the same extrapolation Geodirectory uses.

We've been down this road before. Let's take South Dublin City as an example.

If at census time the vacancy rate of South Dublin City was 11% and 50% of those properties were either for sale or for rent then obviously the supply for sale or rent in South Dublin City was 5.5% of all housing stock.

This is healthy supply. But the myhome and daft reports for same period were reporting very tight supply for sale and record low supply for rent.

So something is wrong. Either it is the claims of tight supply on the market or the reasons given for the vacancies.

Or the properties are not hitting Daft and Myhome because institutional investors are buying the properties or Local authorities are renting them both of which reduces the supply.

Plus as I have said before I believe that the supply issue is in relation to their not being a supply of affordable houses for FTB's. And on the Rent side it is affordable properties to rent. We all know that their are properties out there to rent if you can afford them or if the government pay for them for you.

hometruths

Timing belt wrote: »

Or the properties are not hitting Daft and Myhome because institutional investors are buying the properties or Local authorities are renting them both of which reduces the supply.

Plus as I have said before I believe that the supply issue is in relation to their not being a supply of affordable houses for FTB's. And on the Rent side it is affordable properties to rent. We all know that their are properties out there to rent if you can afford them or if the government pay for them for you.

The daft and myhome reports didn't make any distinction to price - it was simply volume of listings.

I thought institutional investors were buying off plans so that is hardly likely to skew the CSO numbers.

But lets assume that it is credible to explain the anomaly between the CSO reasons and daft reports is because these vacancies are not advertised for sale or rent thanks to activity of LAs and institutional investors.

Would it not follow that if institutional investors and LAs were hoovering up that volume - 3-4% of the housing stock - they would be doing so for people to live in these properties. And if they were offering them to people off market outside daft etc. in such large numbers then we would not have an acute housing crisis?

Pre Covid we were seeing footage of 100s of people turning up for rental viewings. What are the institutional investors doing with all this property that they are buying up before it is listed?

Timing belt

schmittel wrote: »

The daft and myhome reports didn't make any distinction to price - it was simply volume of listings.

I thought institutional investors were buying off plans so that is hardly likely to skew the CSO numbers.

But lets assume that it is credible to explain the anomaly between the CSO reasons and daft reports is because these vacancies are not advertised for sale or rent thanks to activity of LAs and institutional investors.

Would it not follow that if institutional investors and LAs were hoovering up that volume - 3-4% of the housing stock - they would be doing so for people to live in these properties. And if they were offering them to people off market outside daft etc. in such large numbers then we would not have an acute housing crisis?

Pre Covid we were seeing footage of 100s of people turning up for rental viewings. What are the institutional investors doing with all this property that they are buying up before it is listed?

Renting to the Government for a risk free High yield

hometruths

Timing belt wrote: »

Renting to the Government for a risk free High yield

And if they were doing so in that volume we would have no homeless problems or social housing waiting lists and no need to build 50000 units a year for the next ten years.

I am sure you can do the maths. Take Dublin city, add up the number of LA rented properties, plus the number on the waiting list and compare it to the number of properties supposedly on the market on census night.

Then bear in mind that the census data represents a snapshot on a random Sunday evening in April, and the IIs would likely have a similar volume available to rent to the govt on a random Sunday evening in May.

Then ask yourself is it really credible to claim both that II investors are renting that volume of property to the govt and we have a housing crisis?

Timing belt

schmittel wrote: »

And if they were doing so in that volume we would have no homeless problems or social housing waiting lists and no need to build 50000 units a year for the next ten years.

I am sure you can do the maths. Take Dublin city, add up the number of LA rented properties, plus the number on the waiting list and compare it to the number of properties supposedly on the market on census night.

Then bear in mind that the census data represents a snapshot on a random Sunday evening in April, and the IIs would likely have a similar volume available to rent to the govt on a random Sunday evening in May.

Then ask yourself is it really credible to claim both that II investors are renting that volume of property to the govt and we have a housing crisis?

OK Lets look at the Maths for Dublin

Assumptions
1) If we assume that a normal vacancy rate is 6% (you previously said this was healthy)
2) all Data is source from the CSO
3) I have assumed there was no shortage of stock prior to 2016 (we know this was not the case as Rents were rising 10% at the time but I have assumed this to avoid areas of dispute)
4) I have estimated obsolesce at 0.25% of the housing stock (This is half of what the central bank estimate but I want to be conservative for this example to avoid areas of dispute)
5) Any Vacant properties over the 6% level re-enter the housing market



As you can see there is still a shortage in the Dublin during this period even if the vacant properties re-enter the market and there was no shortage prior to 2016.

With regards institutions purchasing property this has happened and it is estimated that 50% of all sales of apartments have been by institutions which adds to a shortage of supply for regular buyers.

That then begs the question who are the institutions renting to?
- The majority will be would be FTB's that are locked out of housing market because of affordability and supply.
- The Government have also been very active in renting from the institutions to address the homeless crisis.

A consequence of this is that rents have a floor provided by the government which means that rent does not drop even if there is a oversupply as the government are propping up the high rent which in turn attracts more institutions to invest in the Dublin rental market making the supply problem worse.

In short the housing market is a mess due to government intervention to try and address the housing crisis and the unforeseen impact of their short term solutions. I can understand why the Government stepped in with the homeless crisis but they ended up making the situation worse and if the new properties that they bring to market are purchased by institutions them we are in a vicious cycle.

BryanMartin21

amacca wrote: »

Thats interesting...so after taking into account the cost of building, financing and managing these apartments in inchicore rents are still going to average 1300 a month

And people are complaining private landlords rents are too high.......when presumably they have additional costs and less economies of scale a local authority can access/waive etc.....youd imagine a private landlord woukd have a higher cost of borrowing + LPT +water charges + insurance + less enforcement + additional admin + tenants wrecking property morevfrequently not paying etc.


If thats the price a cost rental scheme is going to be it would make you wonder

1300 is still overpriced for somewhere like Inchicore.

I'd be curious as to who has costed this and how they costed it because it is still maybe 20% - 40% higher than it needs to be. It must be based on current land values in Dublin or something which benchmarks against the sky high current market cost of something in the chain.

Bass Reeves

BryanMartin21 wrote: »

1300 is still overpriced for somewhere like Inchicore.

I'd be curious as to who has costed this and how they costed it because it is still maybe 20% - 40% higher than it needs to be. It must be based on current land values in Dublin or something which benchmarks against the sky high current market cost of something in the chain.

I do not know the value of houses in Inchicore but assuming a two week vacancy period every 12 months between rentals the return is 5% return on a 300k house. That a very minimum that any investor would require as a return on a rental.

In general in lower rental value areas you need a higher return as you run a great risk as well as having the same maintenance charge rates. A plumber or painter will not charge less per hour just because you get 1300/month compare to 2k/ month. He may even charge less at a higher rental value as he may need no one to sit in the van while he is carrying out a repair

PropQueries

Bass Reeves wrote: »

I do not know the value of houses in Inchicore but assuming a two week vacancy period every 12 months between rentals the return is less than 4% return on a 300k house. That a very minimum that any investor would require as a return on a rental.

In general in lower rental value areas you need a higher return as you run a great risk as well as having the same maintenance charge rates. A plumber or painter will not charge less per hour just because you get 1300/month compare to 2k/ month. He may even charge less at a higher rental value as he may need no one to sit in the van while he is carrying out a repair

But 4% is still 4 times the risk free rate of return on deposit. That's a significant excess return for what is minimal risk and more than compensates for any of the risks or costs etc. you outline. Yes, there is a very very slim chance of getting a bad tenant who won't pay the rent, but that risk is minimal and is more than covered by receiving 4 times the return on deposit.

Most rental properties won't require that much maintenance if done properly to begin with and if the landlord treats the tenants reasonably, they will also treat the landlord in a reasonable way in the vast majority of instances.

I find it amazing that landlords and the state seem to believe that the rental yields on property should remain the same as if deposit rates were still 4%-5%.

For cash buyers and investors with no buy to let loan, rental yields should be no more than 2% in a properly functioning rental market (i.e. rents should be half the current level in today's market) if people truly believe current interest rates are going to remain this low for a considerable amount of time.

When rental yields are in excess of 2% in today's market, it means investors are either expecting a significant drop in property prices in the near future or we have a very very dysfunctional rental market. It's obviously the latter, but I believe the former is very likely also.