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

PropQueries

Marius34 wrote: »

Or maybe they hope that life in lockdown is not forever.

Many of those apartments were vacant pre-covid. More have become vacant due to covid and that's despite the councils soaking up many of them through HAP, long-term leasing, buying outright etc.

Do people really believe demand for housing in Dublin will return to pre-covid levels given that according to RTE reported 2 weeks ago that post-covid e.g. AIB staff to work 3 days from home.

Even Google has backtracked and is now more firmly on the side of full-time WFH, Hybrid etc. "60% of Google’s staff will work in the office “a few days a week.” Another 20% will be able to relocate to other company sites, while the remaining one-fifth can apply to permanently work from home.". And, I'm of the opinion that this Hybrid model is more a short-term trend that will revert to either full-time in office or full time WFH very quickly as I don't believe it can/will work in practice.

Throw in that tourism is most likely not going to return to pre-covid levels for several years (if ever due to the possible demise of business related travel for carbon footprint reasons etc.), and we will most likely require far less housing in Dublin going forward compared to pre-covid projected levels IMO

And we will most likely build another 20k homes this year on top of last years c. 20k. Throw in probate sales, funds potentially exiting etc. etc. and I think this supply/demand issue may be reversed very soon IMO

Link to RTE AIB WFH: https://www.rte.ie/news/business/2021/0430/1213126-aib-staff-to-work-3-days-from-home/

Villa05

Mad_maxx wrote:

Work at what?

Jobs, it may have escaped the debate but the leader of the most successful economy in Europe chose to take in more than their quota for economic reasons.

awec

Browney7 wrote: »

Phase 1 and 2 of CQ would then be in first set of figures I expect. IRES publish figures also which have a lower level of vacancies than KW. When I looked on daft recently ires had approx 60 ads for property for rent at present.

You can't really rely on Daft adverts for the likes of the big property companies.

They don't advertise every apartment in my experience. Like they may advertise a 2 bed apartment, but they may actually have 3 of the exact same apartment available.

awec

PropQueries wrote: »

Many of those apartments were vacant pre-covid. More have become vacant due to covid and that's despite the councils soaking up many of them through HAP, long-term leasing, buying outright etc.

Do people really believe demand for housing in Dublin will return to pre-covid levels given that according to RTE reported 2 weeks ago that post-covid e.g. AIB staff to work 3 days from home.

Even Google has backtracked and is now more firmly on the side of full-time WFH, Hybrid etc. "60% of Google’s staff will work in the office “a few days a week.” Another 20% will be able to relocate to other company sites, while the remaining one-fifth can apply to permanently work from home.". And, I'm of the opinion that this Hybrid model is more a short-term trend that will revert to either full-time in office or full time WFH very quickly as I don't believe it can/will work in practice.

Throw in that tourism is most likely not going to return to pre-covid levels for several years (if ever due to the possible demise of business related travel for carbon footprint reasons etc.), and we will most likely require far less housing in Dublin going forward compared to pre-covid projected levels IMO

And we will most likely build another 20k homes this year on top of last years c. 20k. Throw in probate sales, funds potentially exiting etc. etc. and I think this supply/demand issue may be reversed very soon IMO

Link to RTE AIB WFH: https://www.rte.ie/news/business/2021/0430/1213126-aib-staff-to-work-3-days-from-home/

You ability to spin the truth is unparalleled.

Google moved away from full remote back to telling the majority of their staff they're going to be going back to the office at least 2 or 3 days a week. i.e. the exact opposite to what you insisted was going to happen.

Browney7

awec wrote: »

You can't really rely on Daft adverts for the likes of the big property companies.

They don't advertise every apartment in my experience. Like they may advertise a 2 bed apartment, but they may actually have 3 of the exact same apartment available.

Agreed

Yeah I looked up their annual report for 2020 and their occupancy is listed as 98.4% at 31 Dec 20. They've listed their total portfolio as 3688 properties

Marius34

PropQueries wrote: »

Many of those apartments were vacant pre-covid. More have become vacant due to covid and that's despite the councils soaking up many of them through HAP, long-term leasing, buying outright etc.

Do people really believe demand for housing in Dublin will return to pre-covid levels given that according to RTE reported 2 weeks ago that post-covid e.g. AIB staff to work 3 days from home.

Even Google has backtracked and is now more firmly on the side of full-time WFH, Hybrid etc. "60% of Google’s staff will work in the office “a few days a week.” Another 20% will be able to relocate to other company sites, while the remaining one-fifth can apply to permanently work from home.". And, I'm of the opinion that this Hybrid model is more a short-term trend that will revert to either full-time in office or full time WFH very quickly as I don't believe it can/will work in practice.

Throw in that tourism is most likely not going to return to pre-covid levels for several years (if ever due to the possible demise of business related travel for carbon footprint reasons etc.), and we will most likely require far less housing in Dublin going forward compared to pre-covid projected levels IMO

And we will most likely build another 20k homes this year on top of last years c. 20k. Throw in probate sales, funds potentially exiting etc. etc. and I think this supply/demand issue may be reversed very soon IMO

Link to RTE AIB WFH: https://www.rte.ie/news/business/2021/0430/1213126-aib-staff-to-work-3-days-from-home/

Other commentator mentioned that those Clancy Quay with 38% of occupancy, has been fully completed only 2020, so not sure if you still speaking about the same apartments.

MacronvFrugals

jill_valentine wrote: »

2020 was just Clancy Quay's last phase. As far as I can tell Phase 1, with 400+ units, has been on the go since 2013, I don't know about Phase 2.

But that's crazy. I mean I understand the market produces weird outcomes sometimes, but that's a fundamentally mad situation. Essentially every occupied unit has a unit each side of them empty? Everything that makes that economic needs re examining.

Foreign investors accounted for 78% of property funding between 2017 and 2019


https://www.rte.ie/news/business/2021/0511/1220957-irish-institutional-property-analysis/

RichardAnd

Bass Reeves wrote: »

It's a he moisture droplet size in Ireland is the issue. Its the smallest in most of the world.every type of preservation has been tried and had failed. Along with that we have a longer wet period of the year than anywhere else in Europe and shorter dry period.

Everything has been tried and has failed. I bought a hen ARK from the UK that lasts 40+ years in the UK and Scandinavian countries. It did not reach its tenth birthday in Ireland.

There was wood houses build in the UK pre 1500 still standing. Do you not think considering that we were ruled by British for so long that wood houses were not build here in that time frame.....where are they now.

Timber cattle sheds are common in certain parts of the UK. The are the unsuitable for Irish weather conditions.

Moisture droplet size is the issue

That's interesting. I've heard of people in the UK making use of wooden buildings that were put up in the middle ages, but I can't think of a single example in Ireland.

The oldest occupied house that I've ever come across was a cottage built after the Confederacy Wars, but I think only the walls were original. It would be fantastic to own a house with such history.

Anyways, back to our present times...

Graham

Marius34 wrote: »

Other commentator mentioned that those Clancy Quay with 38% of occupancy, has been fully completed only 2020, so not sure if you still speaking about the same apartments.

Something not adding up about the empty units figures being bandied around.

In December KW reported 40% of the recently completed Phase 3 let, ahead of their projections.

Browney7

Graham wrote: »

Something not adding up about the empty units figures being bandied around.

In December KW reported 40% of the recently completed Phase 3 let, ahead of their projections.

That 38% is likely based on an older number or else the Business post article back before Xmas I expect.

Marius34

Graham wrote: »

Something not adding up about the empty units figures being bandied around.

In December KW reported 40% of the recently completed Phase 3 let, ahead of their projections.

I don't take those numbers very serious, mostly they come from Media articles, rather than official reports.

jill_valentine

Browney7 wrote: »

That 38% is likely based on an older number or else the Business post article back before Xmas I expect.

So I've gone digging and looked at the report, and you could be right about that number being a bit of a Chinese Whisper, in which case mea culpa for relaying without checking first.

This is the link dropped in thread - https://ir.kennedywilson.com/~/media/Files/K/Kennedy-Wilson-IR-V2/Annual%20Reports/kw-annual-report-2020.pdf

The 38% figure is used in reference to "Clancy Quay Phase 3" so it may actually be referring to Phase 3 specifically. We may not have a figure for the development as a whole.

I'd be very curious about that figure then in that case though, it's a very strange neck of the woods.

Browney7

jill_valentine wrote: »

So I've gone digging and looked at the report, and you could be right about that number being a bit of a Chinese Whisper, in which case mea culpa for relaying without checking first.

This is the link dropped in thread - https://ir.kennedywilson.com/~/media/Files/K/Kennedy-Wilson-IR-V2/Annual%20Reports/kw-annual-report-2020.pdf

The 38% figure is used in reference to "Clancy Quay Phase 3" so it may actually be referring to Phase 3 specifically. We may not have a figure for the development as a whole.

I'd be very curious about that figure then. It's a very strange neck of the woods.

Makes sense, the numbers I posted originally are as at Q1 2021 and reflect phase 3 also so they had some limited activity in Q1

SmokyMo

PropQueries wrote: »

Many of those apartments were vacant pre-covid. More have become vacant due to covid and that's despite the councils soaking up many of them through HAP, long-term leasing, buying outright etc.

Do people really believe demand for housing in Dublin will return to pre-covid levels given that according to RTE reported 2 weeks ago that post-covid e.g. AIB staff to work 3 days from home.

Even Google has backtracked and is now more firmly on the side of full-time WFH, Hybrid etc. "60% of Google’s staff will work in the office “a few days a week.” Another 20% will be able to relocate to other company sites, while the remaining one-fifth can apply to permanently work from home.". And, I'm of the opinion that this Hybrid model is more a short-term trend that will revert to either full-time in office or full time WFH very quickly as I don't believe it can/will work in practice.

Throw in that tourism is most likely not going to return to pre-covid levels for several years (if ever due to the possible demise of business related travel for carbon footprint reasons etc.), and we will most likely require far less housing in Dublin going forward compared to pre-covid projected levels IMO

And we will most likely build another 20k homes this year on top of last years c. 20k. Throw in probate sales, funds potentially exiting etc. etc. and I think this supply/demand issue may be reversed very soon IMO

Link to RTE AIB WFH: https://www.rte.ie/news/business/2021/0430/1213126-aib-staff-to-work-3-days-from-home/

awec wrote: »

You ability to spin the truth is unparalleled.

Google moved away from full remote back to telling the majority of their staff they're going to be going back to the office at least 2 or 3 days a week. i.e. the exact opposite to what you insisted was going to happen.

If you job position is remotely (no pun) business critical, permanent wfh wont happen. And if your employer telling you you can wfh forever I would be concerned about my position in a company and that company's longevity.

There are reports coming out that productivity declined by 20%, while working hours increased by 30% during covid. Those with children affected the most.

Right now its un popular to talk about returning to the office, and it is a tad early for this discussion.

But soon employees will be screaming to be in a office. Obviously with option to wfh 1-2 days per week. But that was already the case for most jobs.

combat14

anecdotally huge numbers of young people cant wait to leave the country - they just cant take high rents and nose bleed property prices here - perhaps emigration will be the valve to relieve some pressure off the market here

Villa05

MacronvFrugals wrote:

Foreign investors accounted for 78% of property funding between 2017 and 2019

Interesting reporting from the former FF guy now representing the investment funds

Funding implies they financed the building of units
Wonder what proportion of that funding was used to buy pre existing housing. Maynooth scheme for example was purchased not financed by the investment funds

PropQueries

Villa05 wrote: »

Interesting reporting from the former FF guy now representing the investment funds

Funding implies they financed the building of units
Wonder what proportion of that funding was used to buy pre existing housing. Maynooth scheme for example was purchased not financed by the investment funds

It has been interesting over the past week where many of the government TD's etc. kept saying that it was unusual for funds to purchase already built properties in the suburbs.

Back in January this year, a German investor purchased 100 apartments in the Greystones Marina development and they were always meant to be for the sale to individual buyers market.

Government spin is one thing, but they were either outright lying or didn't know. I'd personally rather they were lying as otherwise they really aren't on top of their brief and that's far more worrying to me.

Link to Marina Development sale in Irish Times here: https://www.irishtimes.com/business/commercial-property/german-investor-to-acquire-greystones-apartments-for-60m-1.4462425

yagan

I think a major part of the problem is investor funds not knowing their market. I've seen a defence of such funds describing how Singapore has been a long term success model, yet that argument ignores that 80% of housing in Singapore is state owned and highly regulated; empties are disencentised by vacancy charges.

I reckon a lot of the investors like buyers in the bertie years aren't aware of the unregulated property regime that allowed emptied pile up in Ireland.

PropQueries

yagan wrote: »

I think a major part of the problem is investor funds not knowing their market. I've seen a defence of such funds describing how Singapore has been a long term success model, yet that argument ignores that 80% of housing in Singapore is state owned and highly regulated; empties are disencentised by vacancy charges.

I reckon a lot of the investors like buyers in the bertie years aren't aware of the unregulated property regime that allowed emptied pile up in Ireland.

Actually very possible. It seems very familiar to when the USA banks sold many of their subprime loans to the EU banks back pre-crash. Are the USA funds now doing something similar to the EU funds with the property they purchased several years ago?

I get that the 25 year leases are amazing value, but if they don't exist at some future date, I would wonder what value they will place on future build-to-rent apartments that will be for sale? It would be an automatic 50% fall in value, all things being equal IMO

Cyrus

combat14 wrote: »

anecdotally huge numbers of young people cant wait to leave the country - they just cant take high rents and nose bleed property prices here - perhaps emigration will be the valve to relieve some pressure off the market here

yes, they will race to london, sydney, vancouver

and guess what

its worse there

Brussels Sprout

PropQueries wrote: »

It has been interesting over the past week where many of the government TD's etc. kept saying that it was unusual for funds to purchase already built properties in the suburbs.

Back in January this year, a German investor purchased 100 apartments in the Greystones Marina development and they were always meant to be for the sale to individual buyers market.

Government spin is one thing, but they were either outright lying or didn't know. I'd personally rather they were lying as otherwise they really aren't on top of their brief and that's far more worrying to me.

Olive Callan had a joke around this in his show last Friday. He had one of the politicans saying something like "Yeah we know that this has been happening for years but that was only for apartments so we didn't actually care"

Bass Reeves

Hubertj wrote: »

Very enlightening thank you. I’ve heard the debate around this before but never any specifics around why it isn’t feasible.

RichardAnd wrote: »

That's interesting. I've heard of people in the UK making use of wooden buildings that were put up in the middle ages, but I can't think of a single example in Ireland.

The oldest occupied house that I've ever come across was a cottage built after the Confederacy Wars, but I think only the walls were original. It would be fantastic to own a house with such history.

Anyways, back to our present times...

Its not just Timber it effects. The dampness in Ireland is perfidious. When we had public phones the electronic ones struggled here. In other countries they can put Public phone under half canopy's type housing, in Ireland we had them in completely enclosed units and they still struggled. Everything in a cable sense in Ireland from an electrical or Telecommmucation point of view has to be sealed very well in Ireland. A product call Silica Gel which attracts mositure is used here in all types of housings to soak up moisture out of the air.

Even of you put wood up on concrete plinths where the wood meets the concrete will rot. Go to any country in the world and look at a 20-30 year old timber deck, most will be in good condition even if sitting directly onto the ground. We sit them on Concreate blocks and they will still fail in 15-20 years time

Bass Reeves

Cyrus wrote: »

yes, they will race to london, sydney, vancouver

and guess what

its worse there

My eldest is in NZ in Wellington. A house there costs around 1 million NZ$ at present that is about 600K euro.......and most are timber frame

Marcusm

MacronvFrugals wrote: »

Foreign investors accounted for 78% of property funding between 2017 and 2019


https://www.rte.ie/news/business/2021/0511/1220957-irish-institutional-property-analysis/

There is a lot of institutional/fund money from debt funds as opposed to REITs, ie money for the development phase which is paid off when the properties are sold irrespective of whether they are sold individually or in block sales. Not everything should be demonised. The developers/builders will borrow from funds if it gives them a better debt profile.

Claw Hammer

combat14 wrote: »

anecdotally huge numbers of young people cant wait to leave the country - they just cant take high rents and nose bleed property prices here - perhaps emigration will be the valve to relieve some pressure off the market here

It is not so easy to emigrate as it once was.

Villa05

PropQueries wrote:

Government spin is one thing, but they were either outright lying or didn't know. I'd personally rather they were lying as otherwise they really aren't on top of their brief and that's far more worrying to me.

There's alot of spinning going on.

There only buying 1% of the total without mentioning that ony 2% of the total is on the market at anyone time and even less currently also less than a 1/3 of new builds made available to private buyers.
These funds are dominant in the market while the politicians peddle statistical misinformation to defend them

PropQueries

Marcusm wrote: »

There is a lot of institutional/fund money from debt funds as opposed to REITs, ie money for the development phase which is paid off when the properties are sold irrespective of whether they are sold individually or in block sales. Not everything should be demonised. The developers/builders will borrow from funds if it gives them a better debt profile.

Scenario 1: Say at the moment, the council signs a 25 year lease at €2,000 per month and the funds currently require a 3.5% yield to invest. What's the value of each of those apartments today?

Scenario 2: Now, in 3 years time, say ECB rates are 3%, market rents are €1,500 per month and the Government no longer signs 25 year leases.

What's the market value of an identical block of those apartments built next to the apartments in scenario 1 at that time i.e. the same type of block of apartments value today vs 3 years time?

Is the Government's current plan to hope investors keep building apartments doomed to fail as the maths won't add up in scenario 2 if what they keep telling us about the cost of building these apartments in the City is?

Hubertj

Villa05 wrote: »

There's alot of spinning going on.

There only buying 1% of the total without mentioning that ony 2% of the total is on the market at anyone time and even less currently also less than a 1/3 of new builds made available to private buyers.
These funds are dominant in the market while the politicians peddle statistical misinformation to defend them

And when you throw in the misinformation spread on this thread....

fliball123

PropQueries wrote: »

Really? You're comparing the "social welfare" payments during covid as your argument that they're too high?

Cut social welfare? I've no problem with that. But, then we would have to tell everyone under 55 that they no longer have to pay PRSI as why would they pay PRSI? Is there really such great savings to be made? I have no problem with that if that's your solution. But, then, who will pay for the state pensions? Who will pay for the carers? The potential savings are fairly meaningless in a c. €80B per year budget IMO. All it does is make life harder for the people at the bottom and we gain nothing IMO

For example, if HAP is cut and the state stops leasing homes, what will that do to the value of our homes? And, what is the actually "market value" of my home. In 2006, it may have had a "market value" of €1m, in 2011, it may have had a "market value" of €500k and in 2018 it may have had a "market value" of €800k. What will it's "market value" be in 6 months?

And, does the "market value" of my home really mean anything anymore given the likely scenario of a different form of "fair deal" scheme in 10 years time?

The high cost of living in this country has nothing to do with Mary. Our high national debt has nothing to do with Mary. Our high home prices have nothing to do with Mary. Our high taxes have nothing to do with Mary.

If anyone believes that cutting for the bottom rung of society will result in them getting anything in return, I think they would be fooling themselves IMO

I am going on the current spend but using 2019 is just as bad as 2022 when covid is gone the canvas of this country will be different.

We pay enough for our OAP the problem is that money gets used for other areas of spend. Our model should change in that if someone pays tax a % of that tax say 20% should follow that individiual for the rest of their lives, the current system sees a lot of people paying a lot of money for others to benefit and when they need something like a hosptial or a GP they have to pay again. This is so unfair on anyone who is paying into the system. It also means you get some bang for your buck and the other 80% can be used for the greater good.

As for HAP and all other property market manipulation the property market currently is ingrained with government interference. All help to buy and rent should be removed. If this happened you might see both rents and property prices come down. Or property will settle at a price that it should be at.

So over a quarter of what we pay out in this country is paid back out for welfare and this has zero impact on what the amount we pay in tax or what we are borrowing? REALLY

While you maintain Mary does not have an impact on the costs of the country the fact is she does. She will be getting money every week/month in the form of the dole, childrens allowance, they will be housed in an area that she can actually dictate if the people looking at our housing waiting list has a house available in Leitrim you can bet your hole Mary will not be forced to go there and will continue waiting till they get something in a more attractive area. Not only is this wrong it also takes that property away from someone who may be in a low paying service job who needs to be housed locally to where they work in order to make ends meet.

Then the knock on affect of inter generational social welfare dependencies. Lots of info and studies done on this particular topic. Have a look at these there is now a high likely hood that Marys 4/5 kids will also know the welfare system and will look at how well mammy done out of it and may fall into the same welfare trap. Currently welfare is competing with low paying jobs, as can be seen by the changing face of the service industry and low paying jobs, more and more foreign workers are now seen in places like McDonalds, Aldi and Petrol stations etc.

I also think we should be cutting from the top Politicians, REITS and Vultures but also from the bottom to people who are scamming or gaining an unfair advantage on those working to pay for these advantages.

SmokyMo

Villa05 wrote: »

Interesting reporting from the former FF guy now representing the investment funds

Funding implies they financed the building of units
Wonder what proportion of that funding was used to buy pre existing housing. Maynooth scheme for example was purchased not financed by the investment funds

As far as I know there has been only one development that was forward funded.