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

mcsean2163

Timmyr wrote: »

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

That puts things into perspective. A lot of money for a mobile home.

handlemaster

Cal4567 wrote: »

I think this is a very good question. I don't think it will unless SF drive a sea change through the corridors of power, if they have the mandate by the electorate to do so. Just edging FG and having to be propped up by the Greens and the Soc Dems in a broad coalition, to many wouldn't be a mandate. I sense Mary Lou, Pearse Doherty & Eoin O'Broin etc will have a job on their hands. It's by no means impossible, just not easy.

SF have had a long run in the North . Haven't done much there and the taps of Whitehall have been opened all along. Only had to manage the funds. I dont see how they could anything but a mess in the real world.

Villa05

Labour are putting Darragh o briens own bill on investment funds when he was out of Gov through the Dail according to the Indol

PropQueries

Looks like higher inheritance/lower threshold taxes may be firmly on the Government's agenda in the near future with an article in the Irish Times:

"Inheritance: Are we fair in taxation of the fortunate classes?... In 2018, only 0.5 per cent of total tax revenues were sourced from these taxes on average across the countries that levied them, according to the report... In Ireland, the figures are slightly better but not a lot. Last year, the State received €505 million in capital acquisitions tax – the formal name for tax on inheritance and large gifts here."

May be politically unpopular, but the state is going to have to start looking at raising revenues from other sources sooner rather than later as due to the high rents/property prices, the working poor really have nothing left to give. So they're left with just property taxes in some form or other as it's one of the few asset classes that a regular person can't pack up and move to another jurisdiction to avoid paying IMO

Link to article in Irish Times today: https://www.irishtimes.com/business/personal-finance/inheritance-are-we-fair-in-taxation-of-the-fortunate-classes-1.4562347

SmokyMo

How about put tax on derelict properties and tax on vacant properties if more than 2 in possession as low hanging fruit?

JimmyVik

SmokyMo wrote: »

How about put tax on derelict properties and tax on vacant properties if more than 2 in possession as low hanging fruit?

How about we just tax every man woman and child in the country an extra 1% whether it be their doles or their corporate bonus.
While we are asking to be taxed like
Wasnt too long ago you had people looking to put a 1c tax on every sms or IM sent.
I fukin hate the way in Ireland people are always looking to slap a tax on everything.
How about a tax on asking for a tax

Hubertj

https://www.irishtimes.com/business/commercial-property/tiktok-agrees-long-term-lease-on-new-dublin-docklands-office-1.4562076?mode=amp

Can someone please explain this. Experts on this thread were saying that when google pulled out of this lease the building would lie empty for years. I just don’t understand.

JimmyVik

Hubertj wrote: »

https://www.irishtimes.com/business/commercial-property/tiktok-agrees-long-term-lease-on-new-dublin-docklands-office-1.4562076?mode=amp

Can someone please explain this. Experts on this thread were saying that when google pulled out of this lease the building would lie empty for years. I just don’t understand.

Another large office beside mine in the city center that was empty before covid has just been leased too. Not sure by whom yet, as I only heard about it last week and havent been in our office in a year.

PropQueries

Hubertj wrote: »

https://www.irishtimes.com/business/commercial-property/tiktok-agrees-long-term-lease-on-new-dublin-docklands-office-1.4562076?mode=amp

Can someone please explain this. Experts on this thread were saying that when google pulled out of this lease the building would lie empty for years. I just don’t understand.

According to the article: "the Chinese-headquartered social-media company is understood to have agreed terms to lease the property on the basis of a 15-year lease with 10 years term-certain and a rent-free period of around 18 months."

Maybe they're waiting for all those office buildings that will start to re-enter the market over the next few years as many other companies don't re-new their leases like AIB as reported in the Irish Examiner last December:

"AIB earlier this week completed the exit from its former headquarters at Bankcentre, Ballsbridge and will leave adjacent premises at Hume House on 31 December. It is planning to vacate a further three of its six remaining Dublin head office locations as leases come up for renewal over the next few years."

Link to Irish Examiner article on AIB here: https://www.irishexaminer.com/business/companies/arid-40129670.html

awec

PropQueries wrote: »

According to the article: "the Chinese-headquartered social-media company is understood to have agreed terms to lease the property on the basis of a 15-year lease with 10 years term-certain and a rent-free period of around 18 months."

Maybe they're waiting for all those office buildings that will start to re-enter the market over the next few years as many other companies don't re-new their leases like AIB as reported in the Irish Examiner last December:

"AIB earlier this week completed the exit from its former headquarters at Bankcentre, Ballsbridge and will leave adjacent premises at Hume House on 31 December. It is planning to vacate a further three of its six remaining Dublin head office locations as leases come up for renewal over the next few years."

Link to Irish Examiner article on AIB here: https://www.irishexaminer.com/business/companies/arid-40129670.html

So they've signed up for 10 years minimum with a view to 15, and been given 18 months for free, sounds like a good deal all round for everyone.

TikTok obviously don't read the boards property forum or they'd have learnt that offices have gone the way of the dodo, nobody will ever work in one again.

PropQueries

awec wrote: »

So they've signed up for 10 years minimum with a view to 15, and been given 18 months for free, sounds like a good deal all round for everyone.

TikTok obviously don't read the boards property forum or they'd have learnt that offices have gone the way of the dodo, nobody will ever work in one again.

10 years with an 18 month rent-free period. I'm out of this game many many years now, but I don't remember a time back in the day when that that was considered a good deal in the commercial property market.

But, maybe times have changed

SmokyMo

JimmyVik wrote: »

How about we just tax every man woman and child in the country an extra 1% whether it be their doles or their corporate bonus.
While we are asking to be taxed like
Wasnt too long ago you had people looking to put a 1c tax on every sms or IM sent.
I fukin hate the way in Ireland people are always looking to slap a tax on everything.
How about a tax on asking for a tax

you must own a derelict house then

JimmyVik

SmokyMo wrote: »

you must own a derelict house then

Dont own any house myself at the moment, but this call of tax, tax, tax will only end up coming back to bite us all in the arse.
Carrots are what are needed to solve problems, but in Ireland the only answer we seem to have is tax.

Maybe with derelict houses the state could offer to bring it up to livable condition and in return they get to rent it at a fraction of the normal rental price for 10 or 20 years. Or maybe they could just buy it, like they are buying normal houses that ordinary buyers are being outbid on.

RichardAnd

PropQueries wrote: »

May be politically unpopular, but the state is going to have to start looking at raising revenues from other sources sooner rather than later as due to the high rents/property prices, the working poor really have nothing left to give. So they're left with just property taxes in some form or other as it's one of the few asset classes that a regular person can't pack up and move to another jurisdiction to avoid paying IMO

Alternatively, the state could be reduced in size, lessening the need for further taxation and putting money back into the pockets of citizens. A state without the funds to take out 25 years leases would be a good start.

PropQueries

RichardAnd wrote: »

Alternatively, the state could be reduced in size, lessening the need for further taxation and putting money back into the pockets of citizens. A state without the funds to take out 25 years leases would be a good start.

That would be a good start. But will those 25 year leases then just be used even more in the second-hand market with no real benefit to FTBs or renters?

In relation to the state being reduced. Michael McGrath has already stated that it will get bigger and more expensive and that we should just basically get used to it. Back in November, he stated:

"We have also made decisions that will result in a permanently larger public service... That will need to be paid for within an overall framework that is responsible and sustainable... There will come a time, perhaps as early as later next year, when our borrowing costs will be fully determined by the attitude of investors on the markets."

Link to Irish Times article on Michael McGrath: https://www.irishtimes.com/news/politics/michael-mcgrath-we-will-inevitably-have-a-larger-state-coming-out-of-the-pandemic-1.4408766

RichardAnd

PropQueries wrote: »

That would be a good start. But will those 25 year leases then just be used even more in the second-hand market with no real benefit to FTBs or renters?

In relation to the state being reduced. Michael McGrath has already stated that it will get bigger and more expensive and that we should just basically get used to it. Back in November, he stated:

"We have also made decisions that will result in a permanently larger public service... That will need to be paid for within an overall framework that is responsible and sustainable... There will come a time, perhaps as early as later next year, when our borrowing costs will be fully determined by the attitude of investors on the markets."

Link to Irish Times article on Michael McGrath: https://www.irishtimes.com/news/politics/michael-mcgrath-we-will-inevitably-have-a-larger-state-coming-out-of-the-pandemic-1.4408766

I suppose that if the state wasn't able to offer 25 years leases, the investment funds would be less likely to want to buy up property to rent. If the funds were to rent the property directly, they would have all of the overheads of dealing with the property whereas by leasing it to the state, they get all the money with none of the hassle. Thus, if they weren't there to buy the property, we could assume that it would have gone to the open market?

Regarding the ever metastasizing state, it's nothing new, to be fair. States only get bigger and more bloated with each passing year, 'rona or not. I just like to dream heh...

Villa05

awec wrote:

TikTok obviously don't read the boards property forum or they'd have learnt that offices have gone the way of the dodo, nobody will ever work in one again.

Madium term plans to employ 5k people which is great, office space for 2k, maybe WFH will be significant at tiktok

I haven't seen rent free periods in commercial since the rebooting after the last crash. Is this normal?
Is it another accounting trick given the state is a significant renter of office space?

Any opinions on the deal, don't know much on commercial prices. Is it up/down on pre covid leases

PropQueries

Anyone have any insight into the current state of the local commercial property market in the IFSC?

There is an article in the Irish Times today that "UniCredit to quit the IFSC after 26 years".

What caught my attention was:

"The past decade has seen a number of banks in the IFSC hand back their licences as their parents seek to release capital that is “trapped” in various subsidiaries and streamline their own organisations. Wall Street giant Goldman Sachs and a number of German lenders, including DZ Bank, Helaba and Commerzbank, are among those to have returned local licences."

Link to Irish Times article here: https://www.irishtimes.com/business/financial-services/unicredit-to-quit-the-ifsc-after-26-years-1.4562224

What's even more interesting is that Trinity College Dublin acquired an IFSC block for €16m last year.

Link here to Trinity College purchase: https://www.irishtimes.com/business/commercial-property/trinity-college-dublin-acquires-ifsc-block-for-16m-1.4216869

DataDude

JimmyVik wrote: »

Dont own any house myself at the moment, but this call of tax, tax, tax will only end up coming back to bite us all in the arse.
Carrots are what are needed to solve problems, but in Ireland the only answer we seem to have is tax.

I get your point. We are too heavy on taxes in many areas. However, the problem with Carrots is they generally cost money. Carrots for the minority (owners of vacant properties) paid for with the stick for everyone else.

Personally think the inverse with vacant properties is much more desirable. You can either pay the tax, which is grand. Or you sell up, which is great. Win/Win.

If you see the bidding on some fairly shabby properties these days, there's no shortage of people with the money or the will to take these projects on. If someone isn't willing to pay up to bring a property into use - next person up.

awec

Villa05 wrote: »

Madium term plans to employ 5k people which is great, office space for 2k, maybe WFH will be significant at tiktok

I haven't seen rent free periods in commercial since the rebooting after the last crash. Is this normal?
Is it another accounting trick given the state is a significant renter of office space?

Any opinions on the deal, don't know much on commercial prices. Is it up/down on pre covid leases

Yes, I said this last year I think. One of the most difficult hurdles to overcome for companies expanding here is trying to get space for the increased headcount.

What an increase in WFH allows is an increase in headcount above their current capacity without having to absorb enormous capital costs straight away.

Bass Reeves

There is going to be no one pill cures all solution to this issue. You will need a carrot and stick approach. We need a vacant site tax but talks of 10% of value is ludicrous. It should be targeted at urban area's where demand for housing is highest. Where houses are vacant and are not in habitable condition tax relief on there upgrading should be considered to bring them to a minimum standard for habitation. This could be offset against future rental income or existing rental income from elsewhere. Tier it so as to encourage immediate uptake. Same with vacancy tax set a minimum rate now to raise in 2-3years time . Set it at 2% but a full rebate if site is developed and in use within 2years. This would encourage development on smaller sites.

I have always taught that the way vacancy over commercial premises has developed in Ireland is crazy. It is because of a mixture of insurance and H&S. Give tax relief to businesses or LL's to bring them up to rental standards against rental income.

Set conditions that where tax relief is availed of properties must remain in use for 5-10 years. Allow sale of properties to FTB or those on housing lists as fulfilling these conditions. Set maximum refurbishment values to prevent abuse.

Just one thing I forgot this will not solve the construction labour issue

JimmyVik

DataDude wrote: »

I get your point. We are too heavy on taxes in many areas. However, the problem with Carrots is they generally cost money. Carrots for the minority (owners of vacant properties) paid for with the stick for everyone else.

Personally think the inverse with vacant properties is much more desirable. You can either pay the tax, which is grand. Or you sell up, which is great. Win/Win.

If you see the bidding on some fairly shabby properties these days, there's no shortage of people with the money or the will to take these projects on. If someone isn't willing to pay up to bring a property into use - next person up.

They only carrot available at the moment is to REITs and they are piling into the market. Maybe grow some more carrots and spread them around. REITs are eating them all.

awec

Bass Reeves wrote: »

There is going to be no one pill cures all solution to this issue. You will need a carrot and stick approach. We need a vacant site tax but talks of 10% of value is ludicrous. It should be targeted at urban area's where demand for housing is highest. Where houses are vacant and are not in habitable condition tax relief on there upgrading should be considered to bring them to a minimum standard for habitation. This could be offset against future rental income or existing rental income from elsewhere. Tier it so as to encourage immediate uptake. Same with vacancy tax set a minimum rate now to raise in 2-3years time . Set it at 2% but a full rebate if site is developed and in use within 2years. This would encourage development on smaller sites.

I have always taught that the way vacancy over commercial premises has developed in Ireland is crazy. It is because of a mixture of insurance and H&S. Give tax relief to businesses or LL's to bring them up to rental standards against rental income.

Set conditions that where tax relief is availed of properties must remain in use for 5-10 years. Allow sale of properties to FTB or those on housing lists as fulfilling these conditions. Set maximum refurbishment values to prevent abuse.

I think one of the biggest hurdles to this is that many (most?) of these empty floors above retail or commercial units have no entrance to them, other than through the ground floor unit.

timmyntc

awec wrote: »

I think one of the biggest hurdles to this is that many (most?) of these empty floors above retail or commercial units have no entrance to them, other than through the ground floor unit.

Some dont even have stairs - worked in a shop once where there was just a stira type ladder going from ground floor up to 1st floor.
And 2nd floor was just a regular ladder

As central as you could get, could easily be turned into a 2bed apartment too if it had proper access (& stairs)

Bass Reeves

awec wrote: »

I think one of the biggest hurdles to this is that many (most?) of these empty floors above retail or commercial units have no entrance to them, other than through the ground floor unit.

An awful lot do. It may be a common entrance, some may have rear access. You be surprised at solution that will be found if a chance that you can invest and make a decent return. Bigger issue's are fire and building regulations that is where the cost is

awec

timmyntc wrote: »

Some dont even have stairs - worked in a shop once where there was just a stira type ladder going from ground floor up to 1st floor.
And 2nd floor was just a regular ladder

As central as you could get, could easily be turned into a 2bed apartment too if it had proper access (& stairs)

Yea and any access in and out of these would have to comply with fire safety etc.

It's not as straightforward as people think.

Timing belt

Amadan Dubh wrote: »

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.

Central banks will taper the QE before raising the ECB rate. It will have the same effect as an interest rate rise as bond rates will rise along with inter-bank rates which will lead to higher mortgage rates with the exception of trackers. The increase in rates will result in making property less attractive as there will be alternatives to invest in and get yield (assuming a substantial increase in rates)

Bass Reeves

awec wrote: »

Yea and any access in and out of these would have to comply with fire safety etc.

It's not as straightforward as people think.

That is why you need a carrot as investor needs to see a return. As well most of these can never be sold without commercial premises so LL will always have to rent them.

As an aside with a while now I see a lot of these commercial premises vacant as LL's cannot get tenants. This might encourage LL's to return them completely to residential units

Amadan Dubh

Hubertj wrote: »

https://www.irishtimes.com/business/commercial-property/tiktok-agrees-long-term-lease-on-new-dublin-docklands-office-1.4562076?mode=amp

Can someone please explain this. Experts on this thread were saying that when google pulled out of this lease the building would lie empty for years. I just don’t understand.

Great to see TikTok being legitimised after all despite the pathetic attempts by Facebook etc to try to block its access to the US via lobbying of Trump. Competition is the heart of capitalism. It is a direct rival to Facebook so anything that can hurt Facebook is a positive in my book!

Villa05

Bass Reeves wrote:

There is going to be no one pill cures all solution to this issue. You will need a carrot and stick approach. We need a vacant site tax but talks of 10% of value is ludicrous. It should be targeted at urban area's where demand for housing is highest. Where houses are vacant and are not in habitable condition tax relief on there upgrading should be considered to bring them to a minimum standard for habitation. This could be offset against future rental income or existing rental income from elsewhere. Tier it so as to encourage immediate uptake. Same with vacancy tax set a minimum rate now to raise in 2-3years time . Set it at 2% but a full rebate if site is developed and in use within 2years. This would encourage development on smaller sites.

Solid solution, far cheaper than current apartment building costs quoted and reinvigorates town/City centres
I bet that prices quoted for apartment building would drop significantly were this proposal implemented successfully

Would add CPO for properties where owner is not engaging, seen quite a few council notices on properties to establish who the owner is