2021 Irish Property Market chat - *mod warnings post 1*

fliball123

The_Conductor wrote: »

I'd do it across the board- and I'd also do it with commercial landlords, I wouldn't restrict it to the residential sector. I wouldn't have any minimum or maximum associated with it- and I would insist on some manner of stripping the effect of borrowed funds out of the equation (which is partially why I'd suggest a flatrate tax on the gross income with no allowable deductions).

Our tax system is being abused to legitimately avoid generating taxable cashflows. We need to see where we are leaking taxable income- and plug the holes.

The only thing I will say about that is a lot of smaller landlords will be paying 50% on profits already via the income tax model and they can only write off profits on the interest of the loan or any expense that are attached to the rented property, are they then been double taxed? Or Triple taxed with property tax or quadrupled taxed when you add in stamp duty. Is this not one of the reasons we are seeing small landlords vacate the rental market and now we have big companies who are so big that they are able to leave apartments empty for long periods of time so that they dont have to ask for lower rent. I think your proposition has a lot of unintended consequences that have shown this is the wrong way to do things.

Mad_maxx

cnocbui wrote: »

Spare me. You can buy apartments in limerick for 60-70K. FTBs in capital cities of countries have never had it particularly easy. If you can't afford capital city prices, consider moving to somewhere cheaper. FTB's wanting turn-key new-builds in a capital city whinging about un affordability should maybe do a rethink. I'll bet none of them own a mobile phone thats older than 3 years.

i know the Limerick city market well , bar circa 2014 at the latest , you could not buy apartments in Limerick city for 70 K anywhere bar the dumps on the Dock road around mount kennet and those are 100 k today.

The_Conductor

fliball123 wrote: »

The only thing I will say about that is a lot of smaller landlords will be paying 50% on profits already and they can only write off the interest of the loan or any expense that is attached to the rented property, are they then been double taxed?

No- flatline the tax at a reasonable rate- which will also act as an encourage to pay down debt (this revolving debt facility is nuts).

If rental income was flatlined at a straight 25% of gross rental income- the landlords can use the residual 75% to pay all and any costs- including servicing debts. It would also act as an impetus to pay down debt (other than at the moment, when the cost of debt is low).

There is an irrational incentive to load debt on property (and other assets) this irrational incentive *has* to be hit on the head.

fliball123

The_Conductor wrote: »

No- flatline the tax at a reasonable rate- which will also act as an encourage to pay down debt (this revolving debt facility is nuts).

If rental income was flatlined at a straight 25% of gross rental income- the landlords can use the residual 75% to pay all and any costs- including servicing debts. It would also act as an impetus to pay down debt (other than at the moment, when the cost of debt is low).

There is an irrational incentive to load debt on property (and other assets) this irrational incentive *has* to be hit on the head.

Yeah not a bad proposal

PropQueries

fliball123 wrote: »

The only thing I will say about that is a lot of smaller landlords will be paying 50% on profits already via the income tax model and they can only write off profits on the interest of the loan or any expense that are attached to the rented property, are they then been double taxed? Or Triple taxed with property tax or quadrupled taxed when you add in stamp duty. Is this not one of the reasons we are seeing small landlords vacate the rental market and now we have big companies who are so big that they are able to leave apartments empty for long periods of time so that they dont have to ask for lower rent. I think your proposition has a lot of unintended consequences that have shown this is the wrong way to do things.

But does it really matter if a landlord leaves the market? It's not like the house disappears with him. As long as it's occupied, then it's being used and a significant stick on ensuring such properties are occupied would ensure there's no removal of stock from the market.

Whether someone buys it or rents it, it's still being occupied and solving the problem.

If an electrician leaves Ireland because of high taxes, we are actually down an electrician and that's a problem. If a landlord leaves the market, we still have the house. It's not really a problem.

Either way, taxes on all types of property owners (owners, investors etc.) are only going one way i.e. up as those assets can't leave the state (unlike an electrician who actually can take his asset (i.e. his skill) with him when he leaves the state) and it's an easy win from a Government revenue viewpoint IMO

fliball123

PropQueries wrote: »

But does it really matter if a landlord leaves the market. It's not like the house disappears with him. As long as it's occupied, then it's being used and a significant stick on ensuring such properties are occupied would ensure there's no removal of stock from the market.

Whether someone buys it or rents it, it's still being occupied and solving the problem.

If an electrician leaves Ireland because of high taxes, we are actually down an electrician and that's a problem. If a landlord leaves the market, we still have the house. It's not really a problem.

Either way, taxes on all types of property owners (owners, investors etc.) are only going one way i.e. up as those assets can't leave the state (unlike an electrician who actually can take his asset (i.e. his skill) with him when he leaves the state) and it's an easy win from a Government revenue viewpoint IMO

Well it does if you leave the big players there as then they have the power to keep rents artificially high as they can afford to leave property vacant. So what in effect is happening is the small landlord is losing a huge % of overall rental property market in the country and REITS and vultures are gaining a larger % of the rental market.

As I have pointed out there is already a quadruple tax on small landlords what your looking for will allow the big guys to get a bigger foothold on the market and rents will not be coming down any time soon. As this is what is currently going on.

I think there needs to be some kind of threshold where the big guys pay more

awec

Yes I have never really bought the argument that Ireland suffers when it loses it's small, amateur landlords. This was an argument thrown about all the time, particularly when the AirBnB rules were being discussed.

"Don't do this or we'll sell!"

Ok, great. Please do.

fliball123

awec wrote: »

Yes I have never really bought the argument that Ireland suffers when it loses it's small, amateur landlords. This was an argument thrown about all the time, particularly when the AirBnB rules were being discussed.

"Don't do this or we'll sell!"

Ok, great. Please do.

And now we have the big lads snapping up property left right and center and have the ability to soak up losses of not renting out some property in order to keep rents high..So yeah this is whats happening if the smaller landlord had been supported a bit more maybe there would be more competition in the rental sector

PropQueries

fliball123 wrote: »

Well it does if you leave the big players there as then they have the power to keep rents artificially high as they can afford to leave property vacant. So what in effect is happening is the small landlord is losing a huge % of overall rental property market in the country and REITS and vultures are gaining a larger % of the rental market.

As I have pointed out there is already a quadruple tax on small landlords what your looking for will allow the big guys to get a bigger foothold on the market and rents will not be coming down any time soon. As this is what is currently going on.

I think there needs to be some kind of threshold where the big guys pay more

Well, at least the big players are also adding to the supply of housing. Yes, they're outbidding regular people but the actual supply of housing units is increasing because of them.

A small landlord is just taking a house that is already built, outbidding regular people and adding nothing to supply. I really don't see how giving small landlords preferential tax treatment helps increase actual supply.

cnocbui

Mad_maxx wrote: »

i know the Limerick city market well , bar circa 2014 at the latest , you could not buy apartments in Limerick city for 70 K anywhere bar the dumps on the Dock road around mount kennet and those are 100 k today.

I gave links a few posts back showing one listed for €70 K last October.

fliball123

PropQueries wrote: »

Well, at least the big players are also adding to the supply of housing. Yes, they're outbidding regular people but the actual supply of housing units is increasing because of them.

A small landlord is just taking a house that is already built, outbidding regular people and adding nothing to supply. I really don't see how giving small landlords preferential tax treatment helps increase actual supply.

So is the amount of rent being paid and that while there are a lot of rental properties empty..

cnocbui

The_Conductor wrote: »

I'd be looking at treating rental income wholly separate to any other income.
I'd disallow any deductions, at all.
I'd tax it at a reasonable rate across the board (say 25% of gross rental income) and the landlord covers their costs and any profit resides in the other 75%

The whole concept of allowing the cost of borrowing against income as an allowable cost for landlords- is one of the concepts that I have most issues with. However, I don't think it should be allowable as a cost for anyone. If you have borrowing- that is your business, however, it shouldn't be an allowable cost (for any sector).

The most equitable manner of looking at rental income- is to ringfence it separately from other 'unearned income' and treat it in an entirely different manner (such as a straightline tax with no allowable deductions whatsoever).

We seriously need to think outside of the box on this one.

That's what NZ have just done - disallowed deduction of interest against rental income.

awec

fliball123 wrote: »

And now we have the big lads snapping up property left right and center and have the ability to soak up losses of not renting out some property in order to keep rents high..So yeah this is whats happening if the smaller landlord had been supported a bit more maybe there would be more competition in the rental sector

I am not convinced that when a small landlord sells that it's one of the REITs doing the buying. It wouldn't fit their portfolio. It's either being bought by an individual for their own use, or it's being bought by another small landlord.

REITs are increasing their stock by building more, or buying entire developments.

Mad_maxx

awec wrote: »

Yes I have never really bought the argument that Ireland suffers when it loses it's small, amateur landlords. This was an argument thrown about all the time, particularly when the AirBnB rules were being discussed.

"Don't do this or we'll sell!"

Ok, great. Please do.

may i ask how you feel about small time property owners who have their houses - apartments leased to the local authorities ?

i mean under long term leases , ten and twenty years , not referring to HAP

JimmyVik

Mad_maxx wrote: »

may i ask how you feel about small time property owners who have their houses - apartments leased to the local authorities ?

i mean under long term leases , ten and twenty years , not referring to HAP

I know people who had AIRBnbs doing that now. Leasing to the council for 20 years. I know of one where the neighbors would all cry with relief and joy, if it went back to being an AirBnb. The tenant the council gave it to (and their buddies) has them all looking to move. Some owners have put their up for sale. And the council, who put the creep into the apartment in the first place beside them, want to buy them. You couldnt make it up.

christin

Interesting podcast from David McWilliams on house prices at the moment echoes what some people said on this forum already
"Current market has no value for money, very few amounts of bad property, sellers don't want to list houses as there are no physical viewings...People are panicking and current market is a rerun of 2005, 2006"
Cease and desist. Get out of the housing market right now, plus the 5 fundamental ways cities are changing on Castbox. Check out this episode! https://castbox.fm/vb/366562479

fliball123

awec wrote: »

I am not convinced that when a small landlord sells that it's one of the REITs doing the buying. It wouldn't fit their portfolio. It's either being bought by an individual for their own use, or it's being bought by another small landlord.

REITs are increasing their stock by building more, or buying entire developments.

No maybe not but you cannot deny the fact that over the last 5 years the % of properties that were owned by small landlords has decreased and in the same period the amount of properties that REITS/Vultures control has increased, it may not be a 1 for 1 but there is a correlation there and the knock on effect is that property can be left empty to keep rents high

PropQueries

fliball123 wrote: »

No maybe not but you cannot deny the fact that over the last 5 years the % of properties that were owned by small landlords has decreased and in the same period the amount of properties that REITS/Vultures control has increased, it may not be a 1 for 1 but there is a correlation there and the knock on effect is that property can be left empty to keep rents high

But isn't that expected given we didn't have reits etc. 10 years ago.

Given that small landlords were c. 100% of the market 10 years ago, it only makes sense that the percentage share of small landlords in the market has fallen in percentage terms as the reits etc. entered the market as we can't go above a total of 100%.

The real question is has the actual supply of rental properties decreased?

fliball123

christin wrote: »

Interesting podcast from David McWilliams on house prices at the moment echoes what some people said on this forum already
"Current market has no value for money, very few amounts of bad property, sellers don't want to list houses as there are no physical viewings...People are panicking and current market is a rerun of 2005, 2006"
Cease and desist. Get out of the housing market right now, plus the 5 fundamental ways cities are changing on Castbox. Check out this episode! https://castbox.fm/vb/366562479

McWilliams is no profit in fact he gets more wrong than right. He neglects to say that those who are selling will also be buying (trading up/down) so its a zero sum game and the amount of demand will trump supply for a long ongoing period or until we can build enough houses. Throw in we have seen immigration inward on the + side for the last 6 years and now the government have told the world that they are changing how refugees are treated here and will only take 4 months to process them instead of 8 years. We are going to have a hell of spike in migration to Ireland once covid is gone.

He also spouted in 2017 that we were in a bubble and in 2021 looking back he got that wrong as well as prices bumped along and did not go up in any great shape or form. Also there is no easy access to credit, ask anyone trying to get a mortgage the hoops you have to jump through are crazy and the central bank rules have keep prices in check. 2005/6 banks were given money out like confetti, 110% mortgages anyone.. The is not the same in 2021

fliball123

PropQueries wrote: »

But isn't that expected given we didn't have reits etc. 10 years ago.

Given that small landlords were c. 100% of the market 10 years ago, it only makes sense that the percentage share of small landlords in the market has fallen in percentage terms as the reits etc. entered the market as we can't go above a total of 100%.

The real question is has the actual supply of rental properties decreased?

Well the proof is in the pudding, (and I said 5 years not 10) you are the one on here spouting about all the vacant property and how you want a vacant property tax on it yet you dont see the correlation to the REITS/Vultures coming in and taking a very high % of the rental market and being able to afford to leave a property vacant in order to preserve higher rents..Now do you think a small landlord could afford to do this. So while I agree they were not here 10 years ago, how do they fare out over the last 5 years?

Do you know if the amount of proeprty for rent has decreased? I have not been tracking this? We all know the supply for sale is down a hell of a lot. This has the knock on effect as well of more people having to rent as supply for sale is p1ss poor

Hulk Hands

Plenty of opinions from people here and on the other thread on McWilliams opinion who clearly didn't listen to the podcast. The other thread is full of outrage that "McBoofball" is telling people to step out of the market for half a decade until they're old and grey. Suggestions that he has something to gain from asking people to wait (what exactly?).

He's simply saying that people aren't selling due to Covid, the only houses coming on stream are necessary sales due to elderly deaths and the construction ban is preventing new builds. He advised not to buy in this mini bubble period where there's nothing new coming to the market, and once Covid subsides (in the next few months) the market will return to some sort of early 2020 normal where demand doesn't outweigh supply by a ridiculous factor. He just said don't do something stupid in the next 6 months while there are no viewings allowed. He's not trying to tank the market until 2026

MacronvFrugals

Great jobs news today!


"Intel to create 1,600 Irish jobs under global expansion plan"


https://www.irishtimes.com/business/technology/intel-to-create-1-600-irish-jobs-under-global-expansion-plan-1.4518396

fliball123

Hulk Hands wrote: »

Plenty of opinions from people here and on the other thread on McWilliams opinion who clearly didn't listen to the podcast. The other thread is full of outrage that "McBoofball" is telling people to step out of the market for half a decade until they're old and grey. Suggestions that he has something to gain from asking people to wait (what exactly?).

He's simply saying that people aren't selling due to Covid, the only houses coming on stream are necessary sales due to elderly deaths and the construction ban is preventing new builds. He advised not to buy in this mini bubble period where there's nothing new coming to the market, and once Covid subsides (in the next few months) the market will return to some sort of early 2020 normal where demand doesn't outweigh supply by a ridiculous factor. He just said don't do something stupid in the next 6 months while there are no viewings allowed. He's not trying to tank the market until 2026

Who the hell is he to tell anyone to do anything. People need to look at their own circumstances in order to buy or sell. He has been shouting not to buy since 2017 and if anyone has listened to him they will have now paid 4 years of rent and prices have gone up. Thanks Dave

JimmyVik

Hulk Hands wrote: »

Plenty of opinions from people here and on the other thread on McWilliams opinion who clearly didn't listen to the podcast. The other thread is full of outrage that "McBoofball" is telling people to step out of the market for half a decade until they're old and grey. Suggestions that he has something to gain from asking people to wait (what exactly?).

He's simply saying that people aren't selling due to Covid, the only houses coming on stream are necessary sales due to elderly deaths and the construction ban is preventing new builds. He advised not to buy in this mini bubble period where there's nothing new coming to the market, and once Covid subsides (in the next few months) the market will return to some sort of early 2020 normal where demand doesn't outweigh supply by a ridiculous factor. He just said don't do something stupid in the next 6 months while there are no viewings allowed. He's not trying to tank the market until 2026

Funny that. I said EXACTLY the same myself a couple of weeks ago here.
Im not on the radio though.

fliball123

MacronvFrugals wrote: »

Great jobs news today!


"Intel to create 1,600 Irish jobs under global expansion plan"


https://www.irishtimes.com/business/technology/intel-to-create-1-600-irish-jobs-under-global-expansion-plan-1.4518396

shush this is not what the doomsdayers want to hear will you stop

Villa05

fliball123 wrote: »

I would go back even further 2017 - 2019 superstar economists like David McWilliams first show states that we are back in a bubble even do we had no easy access to credit and this is what is needed to inflate a bubble and in hindsight he was proven wrong, but a lot of people would listen to him and make the decision to not buy.

Are you confusing stating a market is in a bubble and saying a market is due to crash.



REITs and Government have acess to free credit, REITS benefit from irrational taxation systems which become priced into property.



The overwhelming majority were predicting a fall this time last year, They did not fall because of this activity in the market



Bubbles have many causes

Three chief conditions contribute to irrational exuberance and subsequent asset inflation:

• Low-interest rates: They make it easy to borrow money cheaply, which boosts investment spending.1 However, investors cannot receive a good return on their investments at these rates, so they move their money into higher-yield, higher-risk asset classes, spiking asset prices.2
  
  
  
• Demand-pull inflation:This occurs when buyers' demand for an asset exceeds the available supply of that asset. As asset prices rise, everyone wants to get in on the profits.3
• Asset shortage: This is when investors think that there is not enough of a given asset to go around. Such shortages make asset bubbles more likely because the imbalance between supply and demand leads prices to appreciate beyond the asset's value

fliball123

Villa05 wrote: »

Are you confusing stating a market is in a bubble and saying a market is due to crash.



REITs and Government have acess to free credit, REITS benefit from irrational taxation systems which become priced into property.



The overwhelming majority were predicting a fall this time last year, They did not fall because of this activity in the market



Bubbles have many causes

Three chief conditions contribute to irrational exuberance and subsequent asset inflation:

• Low-interest rates: They make it easy to borrow money cheaply, which boosts investment spending.1 However, investors cannot receive a good return on their investments at these rates, so they move their money into higher-yield, higher-risk asset classes, spiking asset prices.2
  
  
  
• Demand-pull inflation:This occurs when buyers' demand for an asset exceeds the available supply of that asset. As asset prices rise, everyone wants to get in on the profits.3
• Asset shortage: This is when investors think that there is not enough of a given asset to go around. Such shortages make asset bubbles more likely because the imbalance between supply and demand leads prices to appreciate beyond the asset's value

NO I am saying Mcwilliams in his first new rassle dassle show back in 2017 was saying we are back in a bubble

awec

MacronvFrugals wrote: »

Great jobs news today!


"Intel to create 1,600 Irish jobs under global expansion plan"


https://www.irishtimes.com/business/technology/intel-to-create-1-600-irish-jobs-under-global-expansion-plan-1.4518396

Stripe announced 1000 jobs in Ireland last week too I think.

Claw Hammer

Hulk Hands wrote: »

He's simply saying that people aren't selling due to Covid, the only houses coming on stream are necessary sales due to elderly deaths and the construction ban is preventing new builds.

Funny that1. Two of my neighbours are sellig, one moving up market, one moving down. Both say they will rent until the find a new house.

K.Hawksworth

awec wrote: »

Stripe announced 1000 jobs in Ireland last week too I think.

Yep, and Workday announced 400 last week also.