Irish Property Market 2020 Part 3

hometruths

Graham wrote: »

Thanks, it certainly clarifies your previously un-posted conclusion.

Apologies, I thought it was blindingly obvious.

Graham wrote: »

I'd certainly be interested in seeing an updated version of the trend charts to see if the trends have changed in the last 4 or 5 years.

I'd certainly be wary of concluding too much about todays market based on outdated trend analysis.

As is your privilege. But it is the most recent analysis commissioned by the Dept of Housing and published today.

If we cannot draw conclusions from that it is difficult to know what we can draw conclusions from.

Cyrus

schmittel wrote: »

Apologies, I thought it was blindingly obvious.

i wasnt clear either to be honest, in the end it was the blindingly obvious but i was surprised as i wouldnt assume that was news to anyone.

Graham

schmittel wrote: »

it is the most recent analysis commissioned by the Dept of Housing and published today.

If we cannot draw conclusions from that it is difficult to know what we can draw conclusions from.

You can't think of anything happening at the moment that might possibly stand a chance of changing todays trends, never mind the trends of 5 years ago?

I haven't read the analysis yet, I hope to have a chance later. I'd be surprised if there weren't some sort of caveat around recent events.

hometruths

Graham wrote: »

You can't think of anything happening at the moment that might possibly stand a chance of changing todays trends, never mind the trends of 5 years ago?

Of course I can. And I have no doubt the ESRI has thought of something too.

There is a global pandemic causing vast numbers of people to be working from home, and technologies that facilitate this are being developed and adopted in unprecedented numbers.

If there were net outflows from Dublin when WFH was barely heard of, and people were relying on dial up internet, I am happy to draw conclusions that the widespread successful implementation of WFH, availability of fibre broadband and software to enable WFH, will not lead to a reversal of the trend of net outflows from Dublin.

You may be wary of drawing that conclusion, as I say, that's your privilege.

To me it is blindingly obvious.

hometruths

Graham wrote: »

I haven't read the analysis yet, I hope to have a chance later. I'd be surprised if there weren't some sort of caveat around recent events.

Unsurprisingly they have section titled Implication of Covid-19 Pandemic on Projections.

Firstly they point out that the key driver of population change, international migration, is likely to be lower than their baseline, at least in the short term:

It is likely that travel restrictions, uncertainty about the evolution
of the pandemic and lower confidence may result in migration being lower than in the baseline scenario at least in the short term. The low international migration scenario assumes that international migration falls from +33,700 in 2019 to +5,000 by 2022 and thereafter follows the Baseline scenario.

Basically they are agreeing with PropQueries.

Secondly they say that housing demand is likely to be lower due to the COVID economic downturn, at least in the short term.

Thirdly, on internal migration, they acknowledge that data on regional migration is currently limited and they conclude:

Lastly, if the current situation of increased remote working persists over time it could alter the decision of workers to move internally or commute, with a stronger preference for counties with lower house prices over those with robust labour markets when the jobs can be performed remotely

Makes sense.

drogon.

I guess if building cost continue to stay high, good thing some are working on alternatives.

https://www.businessinsider.com/three-floor-apartment-built-with-help-of-a-3d-printer-2020-12


Albeit it maybe long way down the road.

Timing belt

schmittel wrote: »

Apologies, I thought it was blindingly obvious.



As is your privilege. But it is the most recent analysis commissioned by the Dept of Housing and published today.

If we cannot draw conclusions from that it is difficult to know what we can draw conclusions from.

What is interesting in the report is the migration out of Dublin is to the commuter belt. I think the report mention migration out of Dublin to counties seen as a continuation of Dublin or connected by Motorway.

‘The top ten net flows are flows out of Dublin, with the population moving to counties which are either contiguous to Dublin or are connected to Dublin via motorway.’

hometruths

Timing belt wrote: »

What is interesting in the report is the migration out of Dublin is to the commuter belt. I think the report mention migration out of Dublin to counties seen as a continuation of Dublin or connected by Motorway.

‘The top ten net flows are flows out of Dublin, with the population moving to counties which are either contiguous to Dublin or are connected to Dublin via motorway.’

Yes, and that is also to be expected. But therein lies the point of the WFH argument.

Previously the flow out of Dublin was to places as close or convenient to Dublin. If WFH is an option in the future it opens up a whole range of options beyond what is contiguous or connected to Dublin via motorway.

Timing belt

schmittel wrote: »

Yes, and that is also to be expected. But therein lies the point of the WFH argument.

Previously the flow out of Dublin was to places as close or convenient to Dublin. If WFH is an option in the future it opens up a whole range of options beyond what is contiguous or connected to Dublin via motorway.

Unless WFH is 75% of the time then people will still need to be relatively close to the main centres of employment.

The section of the ESRI report on this WFH states
"if the current situation of increased remote working persists over time it could alter the decision of workers to move internally or commute, with a stronger preference for counties with lower house prices over those with robust labour markets when the jobs can be performed remotely."

What is interesting is that the population projections from the ESRI are highest in the commuter belt (E.g. Kildare, Meath, Carlow, Laois). What will be interesting is if WFH continues for a few days a week then these commuters will have more disposable income as the cost of commuting can be significant.

hometruths

Timing belt wrote: »

Unless WFH is 75% of the time then people will still need to be relatively close to the main centres of employment.

Personally I think if WFH will vary wildly across industry and individual. Some will be 75% some will be 25%, and crucially some will have flexible start times. Commuting a lot more bearable if you can start later and beat the rush hour.

For instance Wicklow town to Stephens Green (47km) for 9 am can take up to 140 mins. This is how long it takes from Wexford town to St Stephens Green (135km) off peak. So depending on the time of day, Wexford town is as relatively close to Dublin as Wicklow town.

I agree people will still need to be relatively close. But for somebody WFHing from home even only one day a week, with a flexible start time, in terms of hours spent in the car, relatively close is a lot further out than somebody clocking into the office for 9 every morning.

hometruths

Timing belt wrote: »

What is interesting is that the population projections from the ESRI are highest in the commuter belt (E.g. Kildare, Meath, Carlow, Laois). What will be interesting is if WFH continues for a few days a week then these commuters will have more disposable income as the cost of commuting can be significant.

Yes I noticed that from the other side of that coin, they identified the lowest demand for new housing would be in Dublin - Fingal specifically. That is the first time I have seen that claim made by anybody with influence.

Villa05

The rebirth of rail anyone, Tipp Waterford wexford. Work as you commute at relatively low cost

Timing belt

schmittel wrote: »

Personally I think if WFH will vary wildly across industry and individual. Some will be 75% some will be 25%, and crucially some will have flexible start times. Commuting a lot more bearable if you can start later and beat the rush hour.

For instance Wicklow town to Stephens Green (47km) for 9 am can take up to 140 mins. This is how long it takes from Wexford town to St Stephens Green (135km) off peak. So depending on the time of day, Wexford town is as relatively close to Dublin as Wicklow town.

I agree people will still need to be relatively close. But for somebody WFHing from home even only one day a week, with a flexible start time, in terms of hours spent in the car, relatively close is a lot further out than somebody clocking into the office for 9 every morning.

What I am surprised at is that we have not heard much from the greens regarding WFH despite the savings on emissions.

Staggered start/finish times as always been an option but has not really been adopted yet and where it has it has included core working hours of ten to four.

Hubertj

Villa05 wrote: »

The rebirth of rail anyone, Tipp Waterford wexford. Work as you commute at relatively low cost

Given how good the road network is and how bad Irish rail is they have a significant challenge there. I used to like working on the Dublin cork route when commuting. But when the m8 fully opened the cost couldn’t be justified every week. Difficult for rail to compete against what is a pretty good motorway network. High speed trains etc required....

hometruths

Timing belt wrote: »

What I am surprised at is that we have not heard much from the greens regarding WFH despite the savings on emissions.

Staggered start/finish times as always been an option but has not really been adopted yet and where it has it has included core working hours of ten to four.

Totally agree on the greens. Apart from the ridiculous cycle lanes budget thing which will be a disaster, they seem to have been pretty quiet about most of their agenda. Of course that might be covid noise related.

Re staggered start times etc, I think the most fundamental change relating to WFH will be (in jobs where it works, which is not all) that employers will shift from focussing on amount of hours worked to amount of work done.

i.e if employees are meeting targets, then who cares how long they work. They might be working at home until 11 at night because they want to live in Laois and don't like traffic. So what?

This means that the requirement to come into to office will be task based rather than clock based. You need to come into office two days a week for meetings with clients or management, great we can schedule Joe Bloggs on Thursday at 11, and Jane Doe on Friday at 2.

That will be quite a bit different to staggered start times as we know them

Timing belt

Hubertj wrote: »

Given how good the road network is and how bad Irish rail is they have a significant challenge there. I used to like working on the Dublin cork route when commuting. But when the m8 fully opened the cost couldn’t be justified every week. Difficult for rail to compete against what is a pretty good motorway network. High speed trains etc required....

I was just about to use the same example where taking the train from Cork to Dublin is slower and more expensive. Not to mention all the Junkies that are using it to deliver drugs..

combat14

brisan wrote: »

A lot of LLs want an income to live on ,not a return on an investment

but are they even paying tax on this income

Timing belt

schmittel wrote: »

Totally agree on the greens. Apart from the ridiculous cycle lanes budget thing which will be a disaster, they seem to have been pretty quiet about most of their agenda. Of course that might be covid noise related.

Re staggered start times etc, I think the most fundamental change relating to WFH will be (in jobs where it works, which is not all) that employers will shift from focussing on amount of hours worked to amount of work done.

i.e if employees are meeting targets, then who cares how long they work. They might be working at home until 11 at night because they want to live in Laois and don't like traffic. So what?

This means that the requirement to come into to office will be task based rather than clock based. You need to come into office two days a week for meetings with clients or management, great we can schedule Joe Bloggs on Thursday at 11, and Jane Doe on Friday at 2.

That will be quite a bit different to staggered start times as we know them

To be honest no matter what happens the Government will need to bring in legislation in regards to WFH. Whether it is to give people the right to avail of this where it is possible or whether to introduce legislation like in
France where you can't be contacted by work outside a reasonable period.

If there was legislation giving people the right to avail of WFH then I think that would be a game changer as it would provide people with an element of certainty which would allow them to make decision to move etc...

Timing belt

schmittel wrote: »

Yes I noticed that from the other side of that coin, they identified the lowest demand for new housing would be in Dublin - Fingal specifically. That is the first time I have seen that claim made by anybody with influence.

the figures for Dublin as a whole means that in a top end scenario they need to build 4.7k units each year or on a low in 3k to just meet population growth (excluding other factors)

FinglasFollain

Might have been mentioned before but said I’d post in here..

Started looking to buy last 6 months and I knew the market was dysfunctional. But how dysfunctional I’d never have guessed. The thing that got me the most is that we’ve been outbid on so many “affordable” houses (200-300 range), and the 3 highest bidders have been either the local council or housing associations.

One of these housing associations have been in the media giving out about supply etc and how hard it is for working families. Then on the other they’re outbidding actual working families and hoovering up any reasonable priced properties in Dublin. I wondered how ethical this is? All’s fair in business I guess..

hometruths

Timing belt wrote: »

the figures for Dublin as a whole means that in a top end scenario they need to build 4.7k units each year or on a low in 3k to just meet population growth (excluding other factors)

Sure but apart from population growth and obsolescence, what are the other factors?

Timing belt

schmittel wrote: »

Sure but apart from population growth and obsolescence, what are the other factors?

WFH, Irish tax status etc

enricoh

FinglasFollain wrote: »

Might have been mentioned before but said I’d post in here..

Started looking to buy last 6 months and I knew the market was dysfunctional. But how dysfunctional I’d never have guessed. The thing that got me the most is that we’ve been outbid on so many “affordable” houses (200-300 range), and the 3 highest bidders have been either the local council or housing associations.

One of these housing associations have been in the media giving out about supply etc and how hard it is for working families. Then on the other they’re outbidding actual working families and hoovering up any reasonable priced properties in Dublin. I wondered how ethical this is? All’s fair in business I guess..

It's absurd to say the least that taxpayers taxes are used to outbid against them to be handed out to the workshy.
Have a look at gorey, mullingar, drogheda and you can spend 20 hrs a week commuting in as it doesn't suit the can't work/ won't work brigade to be that far out!

hometruths

Timing belt wrote: »

WFH, Irish tax status etc

Exactly.

Timing belt wrote: »

the figures for Dublin as a whole means that in a top end scenario they need to build 4.7k units each year or on a low in 3k to just meet population growth (excluding other factors)

They have calculated obsolescence in Dublin as tiny - less than 0.1% - or less than 500 properties. This is not a significant worry.

Other factors being WFH, Irish tax status etc.

They acknowledge that WFH may reduce demand in Dublin. Whatever the impact is, I think all agree it is unlikely to increase demand.

Irish tax status is the same. It is hardly like to improve dramatically enough to cause a spike in demand over projected population growth.

And they acknowledge that low end scenario is the most likely, at least in the short term, thanks to COVID.

And 3k a year extra housing sounds pretty manageable. Far from crisis level.

That's what pleased me about the report, finally some analysis of where the houses are needed, and contrary to Hubertj's earlier comment, it actually does offer a pretty similiar conclusion to some of the “discussion” on this thread.

If yesterday somebody had posted that we need to build over 25k houses a year for the foreseeable but only 3k of them need to be in Dublin, they'd have been laughed out of here and condemned as a conspiracy theorist.

But today that seems to be exactly what the ESRI is saying.

Timing belt

schmittel wrote: »

Exactly.



They have calculated obsolescence in Dublin as tiny - less than 0.1% - or less than 500 properties. This is not a significant worry.

Other factors being WFH, Irish tax status etc.

They acknowledge that WFH may reduce demand in Dublin. Whatever the impact is, I think all agree it is unlikely to increase demand.

Irish tax status is the same. It is hardly like to improve dramatically enough to cause a spike in demand over projected population growth.

And they acknowledge that low end scenario is the most likely, at least in the short term, thanks to COVID.

And 3k a year extra housing sounds pretty manageable. Far from crisis level.

That's what pleased me about the report, finally some analysis of where the houses are needed, and contrary to Hubertj's earlier comment, it actually does offer a pretty similiar conclusion to some of the “discussion” on this thread.

If yesterday somebody had posted that we need to build over 25k houses a year for the foreseeable but only 3k of them need to be in Dublin, they'd have been laughed out of here and condemned as a conspiracy theorist.

But today that seems to be exactly what the ESRI is saying.

But it does not take into account the shortage that exists today so the need for 3k (or 4.7k if immigration is high) is on top of a 14k shortage for just the past 4 years. so as a minimum Dublin would need 5.8k houses every year over the next 5 years to meet demand. And that is assuming that there was not shortage before 2016.

hometruths

Timing belt wrote: »

But it does not take into account the shortage that exists today so the need for 3k (or 4.7k if immigration is high) is on top of a 14k shortage for just the past 4 years. so as a minimum Dublin would need 5.8k houses every year over the next 5 years to meet demand. And that is assuming that there was not shortage before 2016.

But are you basing the 14k shortage on the figures you did yesterday? Whilst once again I salute your analysis, as it was an incredibly useful contribution to a boards property discussion, I don't think it is unreasonable to rely on data from a fresh ESRI report published today.

For instance their figures for obsolescence are a lot lower than yours, and reduces your estimate by 8000 - leaving a supposed shortfall of 6000.

And as discussed many times the vacancy rate of 6.7% does not indicate a physical shortage in Dublin overall before 2016, just in areas that were below that figure but not in places like Rathmines where the rate was over double that.

Hopefully this sort of ESRI analysis will lead to further targeting in and ensure the 3k houses (or 4.7k a year) are built in areas that actually need them, and not a load more where the vacancy rates are in the teens.

Hubertj

Does the report refer to the 90k - 180k properties around Ireland which the funds have hidden?

Timing belt

schmittel wrote: »

But are you basing the 14k shortage on the figures you did yesterday? Whilst once again I salute your analysis, as it was an incredibly useful contribution to a boards property discussion, I don't think it is unreasonable to rely on data from a fresh ESRI report published today.

For instance their figures for obsolescence are a lot lower than yours, and reduces your estimate by 8000 - leaving a supposed shortfall of 6000.

And as discussed many times the vacancy rate of 6.7% does not indicate a physical shortage in Dublin overall before 2016, just in areas that were below that figure but not in places like Rathmines where the rate was over double that.

Hopefully this sort of ESRI analysis will lead to further targeting in and ensure the 3k houses (or 4.7k a year) are built in areas that actually need them, and not a load more where the vacancy rates are in the teens.

It's not unreasonable to rely on the ESRI report but nowhere does it mention the housing needs of Dublin specifically so it's not unreasonable to try and work this out. If I change the figures for obselence to 0.01% and the no of people per property to 2.84 then that means we are taking about a shortage of 4.6k over the past 5 years in the Dublin market. So at a very min we need 3.9k house to be built each year over the next 5 years....and that is taking into account the 4.6k of vacancies.

hometruths

Hubertj wrote: »

Does the report refer to the 90k - 180k properties around Ireland which the funds have hidden?

No but it does back up a number of PropQueries's claims.

Timing belt

Hubertj wrote: »

Does the report refer to the 90k - 180k properties around Ireland which the funds have hidden?

No the ESRI are part of that conspiracy so they have covered it up...