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

timmyntc

Villa05 wrote: »

How did you come to that conclusion with the state the renter of last resort

Sweet.Science wrote: »

They dont even need to rush through legislation . Just stop entering long term leases with these investment firms . Its crazy whats going on

Is it not local authorities (councils) that are agreeing these leases?
Not central govt/Dept of Housing

AlmightyCushion

RichardAnd wrote: »

Bear in mind that about 70% of the population own property. If you're a home-owner, it's more than likely that you would wish your property's value to increase in the event that you need to sell it or simply want to move.

That isn't exactly accurate. Most people own a single property that they live in. Increasing house prices don't really affect them too much and most know that. This isn't like the boom times where an increase in house prices means they can remortgage and get a new car and a holiday and put it on the mortgage.

Not to mention that plenty of parents own a house but have kids who are struggling to buy a house and may even having their kids still living with them because they are saving for a house or can't afford to move out. Do you think those home owners are really delighted house prices are increasing pricing their kids out of the market?

There are people who are looking to trade up and see the massive increases in house prices having a very negative affect on themselves as it increases the difference between their house and the houses they would like to buy.

I know a load of people who own their own house (whether mortgaged or straight out) and don't own any other properties and when ever the topic has come up over the past few years most, if not all, think house prices are crazy and not in a good way.

Sweet.Science

timmyntc wrote: »

Is it not local authorities (councils) that are agreeing these leases?
Not central govt/Dept of Housing

https://www.thejournal.ie/housing-minister-local-authorities-buy-up-new-properties-5155602-Jul2020/

Im sure its all approved by our Minister for Housing

C14N

Villa05 wrote: »

The property market is a casino in the most basic of needs

This is my main issue with it too. I know a lot of lefties have a problem with "commodifying housing" because it's a basic need, but I think having a functioning market can still serve basic needs. We commodify food and food is still generally fairly cheap and plentiful. But the issue is that there is only a fixed supply of land, and it is a highly useful commodity, meaning that whoever owns it (at least in areas of high demand) has outsized economic power that is basically never redistributed to everyone else.

In Singapore, this sort of thing is addressed with 99 year leases. The government owns almost all the land, and all sales are actually rentals for 99 years, at which point they will get it back. That helps to keep prices stable and makes sure they can be eventually redistributed equitably. Here, our state will never buy that much land back from private ownership, but at least with land taxes, the person controlling the land has to contribute back to the rest of society to keep holding onto it, and buying land just to park money in it is an extremely bad investment (lets say a plot of land is worth €100k, but the annual tax at 10% is €10k, you'd need to be certain that the underlying land was going to increase in value by 10% in the next year to even break even).

Villa05

C14N wrote:

My belief is that the government allows this to happen becuase it's kind of a majoritarian mindset. People will often allege malicious causes like corruption (cronyism with developers and investment funds, or taking money under the table) or because some large percentage of TDs are landlords, but I think it's more down to the fact that a majority of Irish adults do own property and want the government to protect their biggest investment. Things like higher-density housing developments and land/site value taxes would negatively impact the value of those investments, which would be very unpopular.

That majority is slipping and many in that group have children negatively impacted by the current system. I think the majority has gone the other way.

What is happening with reits plus social and affordable and the increasing realization that it's unsustainable makes that divide even greater

Much of what has been alleged has been proven in various enquiries down through the decades and one thing this country does well is failure to learn from mistakes of the past. We just find new ways of hiding it or decriminalising it or even making it legal

yagan

C14N wrote: »

This is my main issue with it too. I know a lot of lefties have a problem with "commodifying housing" because it's a basic need, but I think having a functioning market can still serve basic needs.

Using terms like Lefties means you're positing an emotive stance from a position where you don't see the disfunction of families, our nations future generations, having to bid against international rent farming funds and their own government for completed houses.

These are completed houses and yet they're bypassing the public market.

Today was a tipping point for many people.

hometruths

yagan wrote: »

I think today was something of a watershed moment. Even if they're comfortable in their own homes they can see the government is absolutely useless to protect the national interest for future generations.

A snap election feels closer with every week.

Watershed moment - what happened today?

Reins

https://www.newstalk.com/podcasts/highlights-from-lunchtime-live/normal-people-just-cant-compete

Media coverage seems to be building the last couple of weeks regarding housing, vulture etc.

awec

C14N wrote: »

This is my main issue with it too. I know a lot of lefties have a problem with "commodifying housing" because it's a basic need, but I think having a functioning market can still serve basic needs. We commodify food and food is still generally fairly cheap and plentiful. But the issue is that there is only a fixed supply of land, and it is a highly useful commodity, meaning that whoever owns it (at least in areas of high demand) has outsized economic power that is basically never redistributed to everyone else.

In Singapore, this sort of thing is addressed with 99 year leases. The government owns almost all the land, and all sales are actually rentals for 99 years, at which point they will get it back. That helps to keep prices stable and makes sure they can be eventually redistributed equitably. Here, our state will never buy that much land back from private ownership, but at least with land taxes, the person controlling the land has to contribute back to the rest of society to keep holding onto it, and buying land just to park money in it is an extremely bad investment (lets say a plot of land is worth €100k, but the annual tax at 10% is €10k, you'd need to be certain that the underlying land was going to increase in value by 10% in the next year to even break even).

Pretty sure food is cheap and plentiful not because it's been commoditised but because of government policies pumping money in to agriculture as well as enormous regulation which has a knock on effect through the supply chain.

yagan

schmittel wrote: »

Watershed moment - what happened today?

The minister said he personally opposed the sale, and would seek to bring forward measures to not allow such purchases in the future. He just validated every critical voice that said the government should have been using legislation to limit non resident buyers acquiring the national stock.

They talk constantly of needing more housing but what good are measures to support construction when citizens and legal residents are outbid?

TobyHolmes

basically taking houses away from irish residents who need to buy homes- how on earth is this allowed?

https://www.irishtimes.com/news/politics/investment-firms-buy-estate-of-112-new-houses-in-dublin-to-rent-out-1.4554949

TobyHolmes

Reins wrote: »

https://www.newstalk.com/podcasts/highlights-from-lunchtime-live/normal-people-just-cant-compete

Media coverage seems to be building the last couple of weeks regarding housing, vulture etc.

irish residents have no hope to buy so unless they pay huge amount for real estate and anything being built is being bought by vulture funds.


great.

Amadan Dubh

Reins wrote: »

https://www.newstalk.com/podcasts/highlights-from-lunchtime-live/normal-people-just-cant-compete

Media coverage seems to be building the last couple of weeks regarding housing, vulture etc.

As expected, especially with covid restrictions coming to an end now that vaccines have been proven to fully suppress the virus transmission where they have been significantly rolled out. You can see the single biggest political issue come back into focus as it has actually gotten worse since the election. It is going to be very prominent in the media for the foreseeable future, as it should be. As someone pointed out very well previously, the optics for the government are appalling seeing family homes scooped out of the FTB market in order to enable funds extract large rents from those same families (or the State on their behalf). A swindle, a scam and a con; that is how the property market looks right now.

Villa05

yagan wrote:

Using terms like Lefties means you're positing an emotive stance from a position where you don't see the disfunction of families, our nations future generations, having to bid against international rent farming funds and their own government for completed houses.

I'm sure we would hardly describe the leaders in our MNC as lefties and they are vocal on supply and affordability

Housing policy threatens our economy regardless

TobyHolmes

Amadan Dubh wrote: »

As expected, especially with covid restrictions coming to an end now that vaccines have been proven to fully suppress the virus transmission where they have been significantly rolled out. You can see the single biggest political issue come back into focus as it has actually gotten worse since the election. It is going to be very prominent in the media for the foreseeable future, as it should be. As someone pointed out very well previously, the optics for the government are appalling seeing family homes scooped out of the FTB market in order to enable funds extract large rents from those same families (or the State on their behalf). A swindle, a scam and a con; that is how the property market looks right now.

yup- we should all feel sick over this. unbelievable - this is allowed to happen. and the government proposing a bill in the autumn. sure thats ages away. we need action now!!!

C14N

yagan wrote: »

Using terms like Lefties means you're positing an emotive stance

I didn't intend for it to be some derogatory term, I just used it as a catch-all for people who are politically on the left and who generally think commodifying housing and having it work on a free market is intrinsically immoral. If you have an alternative term that you don't see as perjorative then I'd be happy to use it.

I was simply saying that this is not my viewpoint. I care about the outcome (i.e. housing that is generally available and affordable) more than the means of how to achieve it. If housing is affordable and also there are landlords and private developers making a profit off it (which I think can happen) then that's fine with me.

awec wrote: »

Pretty sure food is cheap and plentiful not because it's been commoditised but because of government policies pumping money in to agriculture as well as enormous regulation which has a knock on effect through the supply chain.

I don't agree. In part, agriculture subsidies do help make it cheaper, but regulation doesn't. The purpose of regulation is generally to make it safer. In general, while subsidies contribute (and can help stabilise prices in certain areas), I think trade and agrilcultrual innovation has done more to bring down food prices.

Villa05 wrote: »

That majority is slipping and many in that group have children negatively impacted by the current system. I think the majority has gone the other way.l

If it does then I think we could eventually just see a radical change in attitudes toward housing. I wouldn't really have a problem with not ever owning a house if there were policies that ensured rental prices were stable and affordable. The main thing that would drive me to wanting to buy now is simply that renting is such a bad deal in Ireland.

mcsean2163

timmyntc wrote: »

The waffling about who creates the money supply is neither here nor there - the one pertinent fact of the matter is this: any government who has outstanding debts needs to repay or at least service (pay interest on) that debt.
Right now when interest rates are artificially low, then its grand you can refinance away. But in 10 or 20 years time when interest rates could be much higher, your servicing costs go way up for any debt maturing then. Never paying down your debt is the ultimate "kicking the can down the road" solution.

Keeping the national debt low protects us from any shocks in the future - cheap debt is only cheap as long as rates are.

We've the third highest debt per capita in the world but huge foreign direct investment. If anything goes wrong, we're greeced.

Hubertj

Was there sufficient demand from the general public for the houses in these estates or were sales lagging due to affordability? Did the estate in malahide even get to market?

C14N

Hubertj wrote: »

Was there sufficient demand from the general public for the houses in these estates or were sales lagging due to affordability? Did the estate in malahide even get to market?

According to the Business Post, 35 out of 170 had been sold so far. Not sure if that meant the rest were still waiting to be sold, or if many had buyers lined up who just hadn't closed the deal yet though.

.42.

Pro and Con

Pro - should bring professionalism to the rental market .

Con - Removes houses from the people who want to buy a home.

yagan

mcsean2163 wrote: »

We've the third highest debt per capita in the world but huge foreign direct investment. If anything goes wrong, we're greeced.

There's two ways to look at this. The last bust didn't actually affect our multinational sector that actually makes stuff for export, biomed, pharma etc..

And if/when the current mega-whopper market bubble pops people will still need to buy intensive care ventilators and Ireland exports half of the worlds supply of those.

The problem is our over reliance property speculation for employment. During the bertie bubble 15% of the work force was employed directly in construction, with another 7-8% servicing construction.

The multinationals didn't shed jobs during the bust, and are unlikely too in a downturn now. However I don't have an idea of the current numbers employed in this bust, although there seems to be a lot more foreign agency staff working here but getting paid elsewhere (bulgarian site staff being paid in Poland etc..). The unemployment hangover probably won't be as bad as the last bust.

Amadan Dubh

.42. wrote: »

Pro and Con

Pro - should being professionalism to the rental market .

Con - Removes houses from the people who want to buy a home.

The con is huge given the proportion of people who own their homes already is so significant and the stated ambition of FF and FG for people to own their home. The claims that people prefer rentals is made to justify the farcical housing situation we are in.

jetfiremuck

NEEDHOUSENOW wrote: »

thats a tad optimistic

Agreed. You only have to look at the price of timber and its by products to see where this is going. I would safely say that addds an extra 10k +vat to any new house coming to market. This will drive up used house prices in sympathy. Any doubts that inflation and carbon tax creep isnt the elephant in the room .....give it 6 months. The gov are ignoring it.

timmyntc

.42. wrote: »

Pro and Con

Pro - should being professionalism to the rental market .

Con - Removes houses from the people who want to buy a home.

That professionalism would be nice if it was the private rental market - but inevitably these units will all be leased to the council for 15-25year term.

So the council will manage in their typical unprofessional fashion. Anti-social tenants galore with no recourse for their actions.

Ozark707

C14N wrote: »

According to the Business Post, 35 out of 170 had been sold so far. Not sure if that meant the rest were still waiting to be sold, or if many had buyers lined up who just hadn't closed the deal yet though.

Given so few sold is probably an indication that they were overpriced given the shortage in Dublin. Due to the favourable tax treatment of cuckoo funds they can come in and pay a price the developer is happy with. So by virtue of this instead of the developer having to cut prices and make the houses more affordable we are keeping prices up. Quite a result.

lawrencesummers

Preventing foreign ownership is one thing, and while I would agree to it with some exceptions what has to happen before year end is that the tax breaks need to be removed

Not taxing rental income. What a joke.
No capital gains. Another joke.

An Irish landlord who lives and pays their taxes in Ireland pays these taxes, but an institution that doesn’t have any connection to here takes 100% of the money out of the state.


That’s just giving money away and has to change in the next budget. No question.

C14N

NEEDHOUSENOW wrote: »

yeah exactly - in what world do people prefer to rent - rental is a necessity and a convenience - its not a lifetime, long term goal for anyone who wants a decent standard of living.

In many markets, rentals cost less than mortgage payments, and allow more flexibility. You also don't have to pay for the upkeep as a renter. If you were looking at paying a stable rent of €1000 vs mortgage repayments for the same property of €1500, a lot more people would stick with renting for a long time. There are clear advantages in theory, but in practice it's a terrible deal in the current market. Irish attitudes are as you expressed: renting is a temporary arrangement until you get together the money to buy a house. Rentals here are rarely even built with the idea that people would ever raise a family in them long-term. The vast majority are 1 or 2 bedroom units and under 80sqm in size.

antimatterx

1 beds where I live in Dublin have been going for around 220K and 230K over the last year or so. Not bad, but not great eitheir.

There's one that has just gone up today to €270K. That's absolute madness and I really hope it doesn't sell.

standardg60

RichardAnd wrote: »

Bear in mind that about 70% of the population own property. If you're a home-owner, it's more than likely that you would wish your property's value to increase in the event that you need to sell it or simply want to move.

Another thing to consider is that the state itself seems very keen to allow these investment funds to operate here. The government is merely a group of elected officials who come and go; the state itself is a massive entity that doesn't change much from one election to the next. Even if a minister wanted to legislate against this kind of thing, there would likely be an army of civil servants and interests groups who would advice against it.

To me, there seems to be a long term plan to move the population away from ownership of property into rental. This seems to be happening in other Western states too. Why they would want to do this? Well we may each draw our own conclusions.

You're giving the Government too much credit here. There is never 'a plan' other than following any policy which assists re-election.
Housing is the no. 1 issue, so you use the state's credit facility to entice private equity into the construction sector, entering into long term leases which are akin to a Government bond as one investor put it. At the same time you return state revenue to private buyers to pump up the private market.

Law of unintended consequences? The two were supposed to be separate but of course the leases are so lucrative to the funds that instead of waiting to build the BTLs they are also snapping up any available housing to add to their investment. The MOH didn't see this coming and is now promising legislation?

We elect idiots here, and then complain about their incompetency, but they are simply a reflection of ourselves. The culture of being Irish is everyone for themselves, the i'm alright Jack approach, it's inevitable that outsiders will see this and seek to exploit it.

yer man!

The next election will be a burn the house down moment, I never considered Sinn Fein before, I cannot believe I am now contemplating them.