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

Amadan Dubh

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

Investment funds bought 95% of the apartments completed in 2019 - ninety ****ing five percent of all completed apartments in 2019! What an absolutely disgusting state of affairs.

Only about 8,000 of the 21,000 new homes built in the Republic last year were offered for sale on the open market, according to the Construction Industry Federation.

The federation, which represents most builders, says that the State acquired at least 4,400 new homes for social housing, while investment funds bought 95 per cent of the 3,644 apartments completed here last year.

https://www.irishtimes.com/business/construction/just-8-000-houses-built-last-year-offered-for-sale-on-open-market-says-cif-1.4177876

cnocbui

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

I believe REITs/investors bought up about 95% of all the apartments built in Dublin in 2019 in bulk off-market transactions. Almost none made it to market for individuals to have a crack at.

The Ires Reit has sucked up almost 700 homes, apartments and houses in and around the space of a year. Urbeo has hoovered up 567 homes. Carysfort Capital/Angelo Gordon snarfed up 799. And when we throw in the other hungry home hoovers like Avestus, Patrizia, Tristan Capital, Kennedy Wilson, IPUT and once again, our old friends Irish Life, it totals more than 4,000 new homes in greater Dublin alone that the Murphy/O’Donohoe enabled fund hoovering machine has snorted up in the last year.

About 6,000 new properties were built in Dublin in the same period. Today Irish developers have become the clients of the home hoovers.

Ministers Murphy and O’Donohoe, take a bow.

https://dowlingfinancial.ie/news/home-truths-the-story-of-eoghan-and-the-home-hoovers/

So if funds bought 4000 and 6000 were built, that's 67% of all new stock, they are hoovering up - potentially.

Timing belt

cnocbui wrote: »

I believe REITs/investors bought up about 95% of all the apartments built in Dublin in 2019 in bulk off-market transactions. Almost none made it to market for individuals to have a crack at.

https://dowlingfinancial.ie/news/home-truths-the-story-of-eoghan-and-the-home-hoovers/

So if funds bought 4000 and 6000 were built, that's 67% of all new stock, they are hoovering up - potentially.

Nowhere in the article does it mention one of the main drivers that is causing funds to invest heavily in property...if we didn’t have QE that has driven down the yield of every investment we wouldn’t have funds investing to such an extent. QE is causing investors to look at different investments as they chase yield. Property provides one of the highest yields for the level of risk that an investor needs to take on.

awec

I would be curious to know what percentage of the 95% of those apartments were funded by the funds in the first place, as in they were only built because the funds paid for them. I know the REIT that owned the apartments I used to live in funded the construction of hundreds of apartments that were never intended for public sale.

Villa05

Hubertj wrote:

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

I wish it was, it gets a bit depressing when you see how our country is run to the detriment of most of her citizens

So please point out my misinformation and cheer me up

Hubertj

Villa05 wrote: »

I wish it was, it gets a bit depressing when you see how our country is run to the detriment of most of her citizens

So please point out my misinformation and cheer me up

I wasn’t referring to you specifically, it was a general comment.

Bass Reeves

Villa05 wrote: »

I wish it was, it gets a bit depressing when you see how our country is run to the detriment of most of her citizens

So please point out my misinformation and cheer me up

I think that a bit of an misnomer. I think there is good rewards if you have a bit of get up and go. However if you decide you want an ordinary job and some one else to do the heavy lifting then you are on a hiding to nothing.

Yes we have serious issues with the legal systems and there is large waste in the public services. However the system is there it's really up to the individual to use it. I have felt that for the last twenty years after giving up my socialist years as a youth

Amadan Dubh

awec wrote: »

I would be curious to know what percentage of the 95% of those apartments were funded by the funds in the first place, as in they were only built because the funds paid for them. I know the REIT that owned the apartments I used to live in funded the construction of hundreds of apartments that were never intended for public sale.

Ah yes, the argument that the funds are necessary as the housing would not have been built otherwise. Irish Institutional Property's Pat Farrell earning his crust by getting his "reports" backing this up out in the national media. Well, to start, they have been incentivised to fund their own developments or at least disincentivised to fund developments which would be flogged on the private market when built. A policy which has enabled this state of affairs (and it is a combination of things) should be looked at and changed so that, while they may have funded developments themselves before, they will not be motivated to do the same again but will be incentivised to build to sell. A couple obvious measures are for the State to abandon its social housing leases and HAP in order to hold for itself and get those that need help out of the private market 1/3 of tenancies. Another option is of course to stop the effect of those double taxation treaties preventing the extraction of cash from the Irish economy free of tax in the State. In short, while it can be said the finance is welcomed to fund developments (and it does outsource the risk from the Irish taxpayer in the event of a crash affecting property), it needs to reshaped to ensure it meets with the needs of the country which will involve introducing end goals (ie significant drops in rent prices and maybe not significant but at least meaningful drops in house prices in conjunction with a huge increase in supply).

awec

Amadan Dubh wrote: »

Ah yes, the argument that the funds are necessary as the housing would not have been built otherwise. Irish Institutional Property's Pat Farrell earning his crust by getting his "reports" backing this up out in the national media. Well, to start, they have been incentivised to fund their own developments or at least disincentivised to fund developments which would be flogged on the private market when built. A policy which has enabled this state of affairs (and it is a combination of things) should be looked at and changed so that, while they may have funded developments themselves before, they will not be motivated to do the same again but will be incentivised to build to sell. A couple obvious measures are for the State to abandon its social housing leases and HAP in order to hold for itself and get those that need help out of the private market 1/3 of tenancies. Another option is of course to stop the effect of those double taxation treaties preventing the extraction of cash from the Irish economy free of tax in the State. In short, while it can be said the finance is welcomed to fund developments (and it does outsource the risk from the Irish taxpayer in the event of a crash affecting property), it needs to reshaped to ensure it meets with the needs of the country which will involve introducing end goals (ie significant drops in rent prices and maybe not significant but at least meaningful drops in house prices in conjunction with a huge increase in supply).

I'm not making an argument that anything is necessary.

Just saying there's a big difference between a REIT funding development of their own apartments versus a REIT buying apartments that were intended for public sale.

The former is like me complaining that I can't buy John and Susan's house that they are self building up the road.

cnocbui

awec wrote: »

I would be curious to know what percentage of the 95% of those apartments were funded by the funds in the first place, as in they were only built because the funds paid for them. I know the REIT that owned the apartments I used to live in funded the construction of hundreds of apartments that were never intended for public sale.

Almost none.

awec

cnocbui wrote: »

Almost none.

Do you have the source for this?

RichardAnd

Bass Reeves wrote: »

Yes we have serious issues with the legal systems and there is large waste in the public services. However the system is there it's really up to the individual to use it. I have felt that for the last twenty years after giving up my socialist years as a youth

I went through a lefty phase in my younger years that I have long since left behind. A decade and counting of paying taxes and learning how to make money has taught me much.

Whilst I agree completely that there will always be an opportunity for those willing to chase it, I still find the current state of affairs to be sickening. To me, the state has become an obese monstrosity that is gorging itself on the hard work of the productive in society.

Specifically in relation to the housing market, the state is using tax-payer money to out-bid working people on homes and to provide incentives for international funds to buy up property. The property within Ireland should belong first and foremost to private individuals, not to the state and not to institutions supported thereby.

Amadan Dubh

awec wrote: »

I'm not making an argument that anything is necessary.

Just saying there's a big difference between a REIT funding development of their own apartments versus a REIT buying apartments that were intended for public sale.

The former is like me complaining that I can't buy John and Susan's house that they are self building up the road.

Yes, I see you weren't. I note however that Pat Farrell has cobbled together a report to make this exact argument gotten it published today in the media!

Browney7

Amadan Dubh wrote: »

Ah yes, the argument that the funds are necessary as the housing would not have been built otherwise. Irish Institutional Property's Pat Farrell earning his crust by getting his "reports" backing this up out in the national media. Well, to start, they have been incentivised to fund their own developments or at least disincentivised to fund developments which would be flogged on the private market when built. A policy which has enabled this state of affairs (and it is a combination of things) should be looked at and changed so that, while they may have funded developments themselves before, they will not be motivated to do the same again but will be incentivised to build to sell. A couple obvious measures are for the State to abandon its social housing leases and HAP in order to hold for itself and get those that need help out of the private market 1/3 of tenancies. Another option is of course to stop the effect of those double taxation treaties preventing the extraction of cash from the Irish economy free of tax in the State. In short, while it can be said the finance is welcomed to fund developments (and it does outsource the risk from the Irish taxpayer in the event of a crash affecting property), it needs to reshaped to ensure it meets with the needs of the country which will involve introducing end goals (ie significant drops in rent prices and maybe not significant but at least meaningful drops in house prices in conjunction with a huge increase in supply).

http://www.activatecapital.ie/wp-content/uploads/2020/01/202002-Stoneybatter-Marketing-Collateral-PDF.pdf indeed it looks like the state may have provided funding to Bartra to build apartments in Stoneybatter and then lease back to DCC (Activate capital gets funding from the ISIF - Strategic investment fund).

Indeed the ISIF have been quite active in lending into the market here: https://isif.ie/portfolio/investments-to-date

Jinglejangle69

RichardAnd wrote: »

I went through a lefty phase in my younger years that I have long since left behind. A decade and counting of paying taxes and learning how to make money has taught me much.

Whilst I agree completely that there will always be an opportunity for those willing to chase it, I still find the current state of affairs to be sickening. To me, the state has become an obese monstrosity that is gorging itself on the hard work of the productive in society.

Specifically in relation to the housing market, the state is using tax-payer money to out-bid working people on homes and to provide incentives for international funds to buy up property. The property within Ireland should belong first and foremost to private individuals, not to the state and not to institutions supported thereby.

And then leasing them homes to tenants who of the majority dont work for 50 euro a week.

Villa05

Bass Reeves wrote:

I think that a bit of an misnomer. I think there is good rewards if you have a bit of get up and go. However if you decide you want an ordinary job and some one else to do the heavy lifting then you are on a hiding to nothing.

Agreed its not all bad, but how many times do you have to repeat the same mistakes.
The few are faciltaed by walking on the backs of the many even when that activity is criminal

Villa05

awec wrote:

Do you have the source for this?

Think about it, who's buying from the banks and what that would add up to even with a 50% discount

RichardAnd

Jinglejangle69 wrote: »

And then leasing them homes to tenants who of the majority dont work for 50 euro a week.

That too. As a good female friend said to me only a few weeks ago: "I should have got pregnant at 16!"....

cnocbui

awec wrote: »

Do you have the source for this?

I already mentioned this a few days ago: https://www.boards.ie/vbulletin/showpost.php?p=117105062&postcount=9774

https://www.independent.ie/business/personal-finance/property-mortgages/cuckoo-funds-elbow-young-buyers-out-of-housing-market-37973743.html

From the Irish times link posted by Amadan Dubh above:

The finished development was later sold as a job lot to German investor Realis and will be leased to the local authority for social housing.

And:

Investment funds bought 95% of 3,644 apartments completed last year

Only about 8,000 of the 21,000 new homes built in the Republic last year were offered for sale on the open market, according to the Construction Industry Federation.

The federation, which represents most builders, says that the State acquired at least 4,400 new homes for social housing, while investment funds bought 95 per cent of the 3,644 apartments completed here last year.

https://dowlingfinancial.ie/news/just-8000-houses-built-last-year-offered-for-sale-on-open-market-says-cif/#!

Timmyr

Bass Reeves wrote: »

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

Yep, I'm in Auckland and probably about to pay 1.2m for an old ****ty house
Yes they are timber frame, but that is recommended here due to it being slightly flexible for the earthquakes

Looking to buy this one, if people want an example of the quality and cost available
https://www.realestate.co.nz/3998525/residential/sale/47-webster-avenue-mount-roskill

Browney7

cnocbui wrote: »

I already mentioned this a few days ago: https://www.boards.ie/vbulletin/showpost.php?p=117105062&postcount=9774

https://www.independent.ie/business/personal-finance/property-mortgages/cuckoo-funds-elbow-young-buyers-out-of-housing-market-37973743.html

From the Irish times link posted by Amadan Dubh above:



And:

https://dowlingfinancial.ie/news/just-8000-houses-built-last-year-offered-for-sale-on-open-market-says-cif/#!

Indeed it seems Urbeo bought houses from Cairn Homes in Mariaville in Maynooth in 2019 which pours a bit of cold water that the big bad funds were only buying apartments in the docklands...https://amp.rte.ie/amp/1098136/

L1011

There have been repeated warnings about this not being the appropriate forum for general discussion of welfare rates, welfare recipients and so on. This is the last time it'll be given without sanctions

awec

cnocbui wrote: »

I already mentioned this a few days ago: https://www.boards.ie/vbulletin/showpost.php?p=117105062&postcount=9774

https://www.independent.ie/business/personal-finance/property-mortgages/cuckoo-funds-elbow-young-buyers-out-of-housing-market-37973743.html

From the Irish times link posted by Amadan Dubh above:



And:

https://dowlingfinancial.ie/news/just-8000-houses-built-last-year-offered-for-sale-on-open-market-says-cif/#!

That still doesn't answer the question. Is your argument based on the fact the word "bought" was used? The downling financial article is undated, do you know when it was written?

cnocbui

awec wrote: »

That still doesn't answer the question. Is your argument based on the fact the word "bought" was used? The downling financial article is undated, do you know when it was written?

Varadkar rejects calls to ban residential home investment funds from buying 95% of all new apartments in Ireland as Germany banned the practice completely in 2007 ...

In a report published recently by The Construction Industry Federation (CIF) they have warned that 95% of the apartments built in Ireland in 2019 were purchased by institutions and investors commonly known as “cuckoo funds”.

https://theliberal.ie/varadkar-rejects-calls-to-ban-residential-home-investment-funds-from-buying-95-of-all-new-apartments-in-ireland-as-germany-banned-the-practice-completely-in-2007/

April 28, 2021

Amadan Dubh

Timing belt wrote: »

Nowhere in the article does it mention one of the main drivers that is causing funds to invest heavily in property...if we didn’t have QE that has driven down the yield of every investment we wouldn’t have funds investing to such an extent. QE is causing investors to look at different investments as they chase yield. Property provides one of the highest yields for the level of risk that an investor needs to take on.

With inflation already here and even some hyperbolic media articles on the extent it is due to rise, we could see interest rate rises sooner rather than later to counter inflation and that of course will hurt mortgage holders and benefit the funds as more people go to the rental market. This needs to be protected against as rents are already beyond the ceiling of affordability (increase in rents has slowed substantially). Let's add the mortgage-paying home owners to the disgruntled category of the electorate annoyed at the housing market when these interest rate rises are necessary to curb inflation and then we will have some really interesting and chaotic times in politics.

awec

cnocbui wrote: »

https://theliberal.ie/varadkar-rejects-calls-to-ban-residential-home-investment-funds-from-buying-95-of-all-new-apartments-in-ireland-as-germany-banned-the-practice-completely-in-2007/

April 28, 2021

That's still just repeating what you've already said.

Maybe you're right, not in a position to say otherwise, I was hoping you had found some source that was able to differentiate between the properties they "acquired" that were never intended for public sale at any stage, and those where they swooped in and acquired properties that were supposed to be sold to the public.

For example, off the top of my head I know that Kennedy Wilson built 3 or 4 new blocks of apartments in their Central Park portfolio in Leopardstown in the recent past, these were never at any stage going to be sold to the public and I am curious if these are included in this 95%.

But I think this may be an unreasonable ask on my part.

Amadan Dubh

awec wrote: »

That's still just repeating what you've already said.

Maybe you're right, not in a position to say otherwise, I was hoping you had found some source that was able to differentiate between the properties they "acquired" that were never intended for public sale at any stage, and those where they swooped in and acquired properties that were supposed to be sold to the public.

But I think this may be an unreasonable ask on my part.

I actually understand where you're coming from because, while I can see they were bought from the builders, I can't see where it was the case that the builders did not build other than for the purpose of selling to institutionals en masse.

cnocbui

awec wrote: »

That's still just repeating what you've already said.

Maybe you're right, not in a position to say otherwise, I was hoping you had found some source that was able to differentiate between the properties they "acquired" that were never intended for public sale at any stage, and those where they swooped in and acquired properties that were supposed to be sold to the public.

For example, off the top of my head I know that Kennedy Wilson built 3 or 4 new blocks of apartments in their Central Park portfolio in Leopardstown in the recent past, these were never at any stage going to be sold to the public and I am curious if these are included in this 95%.

But I think this may be an unreasonable ask on my part.

I think you would have to email CIF and ask for a copy of the report, given that it's the source document. I seem to recall from about a year ago, when the report was first commented on in the media, one outlet broke down the sales, but I haven't stumbled upon it recently. Each article seems to offer a new tantalising tidbit from it; like this:

The CIF report also highlighted that just 4 new homes in every 10 newly built homes in 2019 were ever offered for sale on the open market.

https://theliberal.ie/just-days-after-varadkar-rejects-calls-to-ban-international-residential-home-investment-funds-a-global-investment-fund-buys-to-rent-nearly-all-170-homes-in-new-maynooth-housing-estate/

Browney7

cnocbui wrote: »

I think you would have to email CIF and ask for a copy of the report, given that it's the source document. I seem to recall from about a year ago, when the report was first commented on in the media, one outlet broke down the sales, but I haven't stumbled upon it recently. Each article seems to offer a new tantalising tidbit from it; like this:

https://theliberal.ie/just-days-after-varadkar-rejects-calls-to-ban-international-residential-home-investment-funds-a-global-investment-fund-buys-to-rent-nearly-all-170-homes-in-new-maynooth-housing-estate/

Do we in know how the official stats work - if a fund commissions a build of a block of apartments does it pay stamp duty and then appear in CSO statistics? Presumably yes?

Marius34

awec wrote: »

That's still just repeating what you've already said.

Maybe you're right, not in a position to say otherwise, I was hoping you had found some source that was able to differentiate between the properties they "acquired" that were never intended for public sale at any stage, and those where they swooped in and acquired properties that were supposed to be sold to the public.

For example, off the top of my head I know that Kennedy Wilson built 3 or 4 new blocks of apartments in their Central Park portfolio in Leopardstown in the recent past, these were never at any stage going to be sold to the public and I am curious if these are included in this 95%.

But I think this may be an unreasonable ask on my part.

I believe they include Build-To-Rent, and social housing projects.
In Balgriffin/Clongriffin there are over 300 Build-to-Rent apartments completed last year, 150 social housing and around 300 Build-to-Rent apartment to be completed this years. All had contracts signed in 2017/2018 before the ground works commenced.