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

Marius34

Article on Vacant luxury city center apartments

"It has been reported that owners are afraid to drop prices and get stuck with lower rents. As all of Dublin is designated as a rent pressure zone, landlords cannot increase rent prices by more than 4% per year."

"However, it said this is likely due to the Dublin rental market going through a “period of uncertainty” due to the impact of COVID-19, which has caused more vacancies across the city."

"Lorcan Sirr, a housing lecturer at Technological University Dublin, said the CCPC was correct that investment funds don’t own enough apartments to move prices nationally.
However, he said they can affect rents in smaller areas.
He said: “The problem is often they (the luxury flats) are concentrated, there’s a lot of them in the same area. If you take it at an average, they constitute a small number of the overall tenancies in the country."

https://www.newstalk.com/news/leaving-dublin-luxury-apartments-vacant-doesnt-break-competition-rules-review-finds-1188114

PropQueries

Sweet.Science wrote: »

Builders have no interest in building for the council for various reasons . Also local resident associations have way too much power in stopping housing . Especially in certain postcodes Even a SF TD stopped one this year

Is that the same type of argument used a few short years ago about landlords not wanting to rent to HAP tenants?

According to the minister for housing, c. 90k such households will be in receipt of HAP/RAS this year.

Amadan Dubh

mcsean2163 wrote: »

Another estate sold to a REIT.

https://www.businesspost.ie/houses/global-property-investment-firm-buys-most-of-170-home-estate-in-kildare-783922ac?auth=login

Apparently population increased by 50k 2019-2020, meaning plenty more scope to rent at exorbitant rates. Not sure where this is all going or when the roundabout will stop

Yes exactly, it assumes there is a conveyor belt of people to pay €2k+ per month on rent or the State to step in where the conveyor belt slows or stops. Exactly like the 00s when the only way was up, just look at the exuberance of the stock market!

Ozark707

Amadan Dubh wrote: »

Yes exactly, it assumes there is a conveyor belt of people to pay €2k+ per month on rent or the State to step in where the conveyor belt slows or stops. Exactly like the 00s when the only way was up, just look at the exuberance of the stock market!

Well the guy from the council who was quoted in the ST article basically said money is no issue. The funds would be stupid not to take advantage of this. The conveyor belt of people in the private market has slowed down considerably so if I were a fund/REIT the council route is the one I would choose.

cnocbui

yagan wrote: »

And yet such investment gave the vast majority of this society a chance for social stability.

Even businesses need social stability.

Socialist gobbledyspeak at it's finest. The home ownership rate is 51% in Germany. They seem to do fine, despite the 'social instability' of lifetime renting.

yagan

cnocbui wrote: »

Socialist gobbledyspeak at it's finest. The home ownership rate is 51% in Germany. They seem to do fine, despite the 'social instability' of lifetime renting.

We don't have the same security of tenure laws as there.

cnocbui

yagan wrote: »

We don't have the same security of tenure laws as there.

Laws can be made, and unmade - though the concept of the latter doesn't seem to exist in the Irish mindset.

Spark Plug

mcsean2163 wrote: »

Another estate sold to a REIT.

https://www.businesspost.ie/houses/global-property-investment-firm-buys-most-of-170-home-estate-in-kildare-783922ac?auth=login

Apparently population increased by 50k 2019-2020, meaning plenty more scope to rent at exorbitant rates. Not sure where this is all going or when the roundabout will stop

There is very easy way for government to stop private equity funds in their tracks, change the tax laws. Most private equity funds use ICAV fund structures to purchase these assets, the main benefit is zero tax paid on rental income. All Pascal needs to do it amend the tax law to say any income from residential property is subject to 25% tax. It would stop said funds and I’d bet a good few might reconsider their recent purchases which would bring some much needed supply to the market

Bass Reeves

yagan wrote: »

We don't have the same security of tenure laws as there.

We do not but neither do we have situations where LL have to jump through hoops to evict non paying tenants. As well smaller LL find it harder to write down costs associated with the business. Deposits are often in inadequate to cover damage done especially in areas where rents are sub 1k/ month. In a lot of countries you rent the bare walls and floors painted magnolia or white you give back in the same condition. You maintain the property for the duration of the tenancy.

yagan

Bass Reeves wrote: »

We do not but neither do we have situations where LL have to jump through hoops to evict non paying tenants. As well smaller LL find it harder to write down costs associated with the business. Deposits are often in inadequate to cover damage done especially in areas where rents are sub 1k/ month. In a lot of countries you rent the bare walls and floors painted magnolia or white you give back in the same condition. You maintain the property for the duration of the tenancy.

All true, but annual renewal which is the norm here isn't elsewhere.

3-5 leases are common in the rental markets you mention where you get bare walls etc..

I guess part of the reason we don't have such long leases and fixed tenure is that ownership is the encouraged goal.

Bass Reeves

Spark Plug wrote: »

There is very easy way for government to stop private equity funds in their tracks, change the tax laws. Most private equity funds use ICAV fund structures to purchase these assets, the main benefit is zero tax paid on rental income. All Pascal needs to do it amend the tax law to say any income from residential property is subject to 25% tax. It would stop said funds and I’d bet a good few might reconsider their recent purchases which would bring some much needed supply to the market

Its peculiar that you recommend this. 6-8 years back we had a large lobby pushing to get funds to invest in property and bring in long term rentals. I made the point that these funds would struggle to cope in the Irish rental market at the time. I also pointed out taht there costs for short term rentals would be higher than smaller irish LL's.

So now after encouraging them in we want to create change the same laws tp create a tempory property price blip that will result in a complete halt in apartment building and may reduce the size of the construction sector at present

Ozark707

Bass Reeves wrote: »

Its peculiar that you recommend this. 6-8 years back we had a large lobby pushing to get funds to invest in property and bring in long term rentals. I made the point that these funds would struggle to cope in the Irish rental market at the time. I also pointed out taht there costs for short term rentals would be higher than smaller irish LL's.

So now after encouraging them in we want to create change the same laws tp create a tempory property price blip that will result in a complete halt in apartment building and may reduce the size of the construction sector at present

But do we want them here at the expense of them charging us exorbitant rates? Take a look at the fist few pages on daft rentals. One new fab development after another. Quite a number have been there pre covid and they couldn't let them then so basically there is no chance now as the price is unchanged (from what I can tell). Now it seems that the funds have copped onto the fact that the private market won't supply the returns they want so they are now tying up lucrative deals with the councils instead.

I don't think this will change however.

Marius34

Ozark707 wrote: »

But do we want them here at the expense of them charging us exorbitant rates? Take a look at the fist few pages on daft rentals. One new fab development after another. Quite a number have been there pre covid and they couldn't let them then so basically there is no chance now as the price is unchanged (from what I can tell). Now it seems that the funds have copped onto the fact that the private market won't supply the returns they want so they are now tying up lucrative deals with the councils instead.

I don't think this will change however.

I believe the problem is, that there are many who wants changes, but don't understand the consequences, until it happens. Some may have been looking 6 years ago for professional landlords to invest in Irish market, didn't think that they won't be cheap.

yagan

Bass Reeves wrote: »

Its peculiar that you recommend this. 6-8 years back we had a large lobby pushing to get funds to invest in property and bring in long term rentals. I made the point that these funds would struggle to cope in the Irish rental market at the time. I also pointed out taht there costs for short term rentals would be higher than smaller irish LL's.

So now after encouraging them in we want to create change the same laws tp create a tempory property price blip that will result in a complete halt in apartment building and may reduce the size of the construction sector at present

What long term rental were brought into existence to encourage this policy you mention?

It seems investors like pension funds have piled into rental yields as an alternative to low bond rates and low dividend returns.

Villa05

Bass Reeves wrote:

Its peculiar that you recommend this. 6-8 years back we had a large lobby pushing to get funds to invest in property and bring in long term rentals. I made the point that these funds would struggle to cope in the Irish rental market at the time. I also pointed out taht there costs for short term rentals would be higher than smaller irish LL's.

I don't remember a large lobby group pushing this agenda and if there was it was definitely not a tennant focused lobby

Mad_maxx

yagan wrote: »

We don't have the same security of tenure laws as there.

tenant protection is stronger in ireland than in germany , in germany there are consequences for both not paying ones agreed rent or damaging the property you are renting

Timing belt

yagan wrote: »

What long term rental were brought into existence to encourage this policy you mention?

It seems investors like pension funds have piled into rental yields as an alternative to low bond rates and low dividend returns.

100% correct with investors chasing yields...it is a side effect of the QE policies that are pushing asset prices higher while investors shy away from low yields in the bond market. Property yields in Ireland are still high compared to other asset classes so investors are willing to take the risk and drive prices higher by purchasing property at higher prices and getting the same or less rental income and a slightly lower yield.

hmmm

Marius34 wrote: »

I believe the problem is, that there are many who wants changes, but don't understand the consequences, until it happens. Some may have been looking 6 years ago for professional landlords to invest in Irish market, didn't think that they won't be cheap.

The cost they can charge is a function of supply. I'd be happier with a professional landlord than an amateur one, but we have to build more in order to bring the costs down. Everything ultimately comes back to supply being the problem at the moment.

Cyrus

Mad_maxx wrote: »

tenant protection is stronger in ireland than in germany , in germany there are consequences for both not paying ones agreed rent or damaging the property you are renting

Also we now have the institutional landlords that everyone was crying out for although now it's a problem it seems ?!?

Wanderer78

Cyrus wrote:

Also we now have the institutional landlords that everyone was crying out for although now it's a problem it seems ?!?

Both landlords and tenants are becoming more exposed overtime, both require protections in order to create a functioning market

Cyrus

Wanderer78 wrote: »

Both landlords and tenants are becoming more exposed overtime, both require protections in order to create a functioning market

Well we now have the professional landlords everyone was seeking so a great time for some amendments

I'm sure long tenancies are desirable for these landlords.

Hubertj

https://www.myhome.ie/residential/brochure/bunavalla-caherdaniel-co-kerry-v23-y045/4498808

This is in 1 of the most beautiful parts of the country. Real potential to create a fantastic gaff.

Wanderer78

Cyrus wrote: »

Well we now have the professional landlords everyone was seeking so a great time for some amendments

I'm sure long tenancies are desirable for these landlords.

speculation is becoming more a problem under such conditions, larger investors probably have more interest in flipping, so both positives and negatives

mcsean2163

Hubertj wrote: »

https://www.myhome.ie/residential/brochure/bunavalla-caherdaniel-co-kerry-v23-y045/4498808

This is in 1 of the most beautiful parts of the country. Real potential to create a fantastic gaff.

5 acres in the middle of nowhere with planning permission for €690,000.... we have to be near the top of the market. I'm assuming, 6 years ago, they'd have been lucky to get 100k. Madness.

Hubertj

mcsean2163 wrote: »

5 acres in the middle of nowhere with planning permission for €690,000.... we have to be near the top of the market. I'm assuming, 6 years ago, they'd have been lucky to get 100k. Madness.

I don’t really care what the asking prices is. It’s a beautiful part of Ireland and I was just making the point someone could build a pretty cool gaff.

cnocbui

Hubertj wrote: »

https://www.myhome.ie/residential/brochure/bunavalla-caherdaniel-co-kerry-v23-y045/4498808

This is in 1 of the most beautiful parts of the country. Real potential to create a fantastic gaff.

I suppose there is an immense premium for sea fronatage. I'm selling a lot more in Connemamara for roughly a third less.

Cyrus

Wanderer78 wrote: »

speculation is becoming more a problem under such conditions, larger investors probably have more interest in flipping, so both positives and negatives

So we don't want professional landlords ?

What do we want then because I'm not sure I know.

Wanderer78

Cyrus wrote: »

So we don't want professional landlords ?

What do we want then because I'm not sure I know.

what we want and need, can be two very different things, we certainly need a level of professionalism in our markets, we need equal protective measures for both landlords and tenants, but we must be extremely wary of the dangerous extractive elements of these markets. if we allow these highly extractive elements dictate our markets, which is the norm, it ll more than likely lead to further deterioration and dysfunctionality of our markets

Ozark707

Wanderer78 wrote: »

what we want and need, can be two very different things, we certainly need a level of professionalism in our markets, we need equal protective measures for both landlords and tenants, but we must be extremely wary of the dangerous extractive elements of these markets. if we allow these highly extractive elements dictate our markets, which is the norm, it ll more than likely lead to further deterioration and dysfunctionality of our markets

We have decided that we are prepared to pay way OTT rates to go down the institutionalised route. This doesn't have to be framed in a black or white manner. Once the contracts are signed we are goosed and we are just copper fastening a terrible solution we are locked to. When will we ever learn.

Wanderer78

Ozark707 wrote: »

We have decided that we are prepared to pay way OTT rates to go down the institutionalised route. This doesn't have to be framed in a black or white manner. Once the contracts are signed we are goosed and we are just copper fastening a terrible solution we are locked to. When will we ever learn.

the state needs to urgently step in here, in order to protect us all from these actions, the state needs to start being the main funder in our property markets, allowing the fire sectors(finance, insurance, and real estate) to dictate our markets, is leading devastating outcomes for all