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

Bass Reeves

Hubertj wrote: »

https://www.myhome.ie/residential/brochure/12-zion-road-rathgar-dublin-6/4499162

Would you need another €1m to renovate and extend this? Could be a cracking gaff if done properly.

I hope whoever buys it has the money when renovating it to retain its original features. Some superb original features such as, staircase, cornices and fire places. Brickwork in the front looks immaculate.

Amadan Dubh

https://www.irishtimes.com/opinion/reits-are-not-the-enemy-and-emotion-is-not-a-policy-1.4563313?mode=amp

Reits are not the enemy and emotion is not a policy

If we turn our back on them we better be ready for the implications of adding €20bn to our national debt

criminately hoovering up all sorts of housing stock,” says another.

You’d be forgiven for feeling alarmed when you read these sorts of comments. I know I am because it is one of my biggest sources of professional pride to have led the campaign for the introduction of Real Estate Investment Trusts (Reits) into Ireland, which was achieved in early 2013.

We are reaching an Orwellian point of promoting the idea that capital that produces jobs is good, while capital that produces housing is bad and therefore should be forbidden or penalised by penal rates of taxation. And this concern applies to other kinds of property investment funds, not just Reits.

Let’s not forget that a political discourse that depends on bashing Reits or the avian label du jour will not lay one brick or house one family, and that’s surely what counts.

It really says a lot that the only supporters of the regime as is are those directly benefitting from it.

But it is infuriating how they are somehow legitimised by the media giving them a platform rather than interviewing them and critiquing the points raised. This is just gaslighting of the public to allow the lobbyists spout their side of the story unchallenged; "we're not the bad guys, we're actually the good guys".

Note that the author in this piece directly profits from the current state of affairs (ie the housing crisis).

Wanderer78

^^^the bulk of the debts required to pull us out of this mess must sit on the public balance sheet, the private sector is simply unable to, as folks are locked out of these markets. we have to stop defaulting to the private sector for such critical needs, as its causing great harm to our economy and society

Hubertj

Amadan Dubh wrote: »

https://www.irishtimes.com/opinion/reits-are-not-the-enemy-and-emotion-is-not-a-policy-1.4563313?mode=amp



It really says a lot that the only supporters of the regime as is are those directly benefitting from it.

But it is infuriating how they are somehow legitimised by the media giving them a platform rather than interviewing them and critiquing the points raised. This is just gaslighting of the public to allow the lobbyists spout their side of the story unchallenged; "we're not the bad guys, we're actually the good guys".

Note that the author in this piece directly profits from the current state of affairs (ie the housing crisis).

I think the author makes some good points. I don’t see a problem with REITs in the Irish market provided that they do not corner the market and purchase properties which would otherwise have been offered for sale to the general public. The problem is not their existence or presence. From a tenants perspective others on here have commented that REITs are better landlords in terms of repairs and addressing other issues in a timely manner.

tom1ie

Hubertj wrote: »

https://www.myhome.ie/residential/brochure/12-zion-road-rathgar-dublin-6/4499162

Would you need another €1m to renovate and extend this? Could be a cracking gaff if done properly.

Crazy price considering the work to be done to it.
Rewire, replumb, insulate,try and make it airtight to bring it up to standard.

PropQueries

Amadan Dubh wrote: »

https://www.irishtimes.com/opinion/reits-are-not-the-enemy-and-emotion-is-not-a-policy-1.4563313?mode=amp



It really says a lot that the only supporters of the regime as is are those directly benefitting from it.

But it is infuriating how they are somehow legitimised by the media giving them a platform rather than interviewing them and critiquing the points raised. This is just gaslighting of the public to allow the lobbyists spout their side of the story unchallenged; "we're not the bad guys, we're actually the good guys".

Note that the author in this piece directly profits from the current state of affairs (ie the housing crisis).

To be fair, I think he does makes some decent points. As he says in the opinion piece: "There have only ever been four Reits in Ireland, and only one – Ires Reit – can be said to be a major player in the Irish residential market." and that Round Hill Capital of recent Maynooth fame isn't a Reit.

Back in 2016, the outgoing chief executive of Ires Reit at that time said that: "It’s a great market... We’ve never seen rental increases like this in any jurisdiction that we’re aware of... I truly feel badly for the Irish people.". So, he was being up front and honest at that time.

Ires Reit didn't ask the state the turbo charge rents and house prices over the past 5 years through HAP, long-term leases, not directly building social homes etc.

I think they would have been happy enough without these Government subsidies but I would think at this stage, along with many other landlords (big and small) they now most likely depend on them to keep existing rents and valuations high.

What I think is interesting is the €20 Billion figure he states and that "then we better be ready for the implications of adding €20 billion to our national debt and the need to service that debt when interest rates rise, perhaps sooner rather than later if bond markets are spooked by our spending."

Sounds like a lot of money until you look at yesterday's IMF extreme predictions that we could potentially lose c. €6 Billion per year from the global tax reforms i.e. that's c. €30 Billion every 5 years.

The state really does need a plan B and the only real option that could potentially resolve the issue quickly and with little cost to the state is getting all that vacant, underused or potential housing stock into the market by any means possible IMO

tom1ie

Hubertj wrote: »

I think the author makes some good points. I don’t see a problem with REITs in the Irish market provided that they do not corner the market and purchase properties which would otherwise have been offered for sale to the general public. The problem is not their existence or presence. From a tenants perspective others on here have commented that REITs are better landlords in terms of repairs and addressing other issues in a timely manner.

REITS are a good idea as long as they only make a reasonable profit as opposed to massive profits off the back of renters.
However rents are too high due to the likes of HAP putting a high artificial floor on rents hence REITS will make large profits.

Amadan Dubh

PropQueries wrote: »

To be fair, I think he does makes some decent points. As he says in the opinion piece: "There have only ever been four Reits in Ireland, and only one – Ires Reit – can be said to be a major player in the Irish residential market." and that Round Hill Capital of recent Maynooth fame isn't a Reit.

Back in 2016, the outgoing chief executive of Ires Reit at that time said that: "It’s a great market... We’ve never seen rental increases like this in any jurisdiction that we’re aware of... I truly feel badly for the Irish people.". So, he was being up front and honest at that time.

Ires Reit didn't ask the state the turbo charge rents and house prices over the past 5 years through HAP, long-term leases, not directly building social homes etc.

I think they would have been happy enough without these Government subsidies but I would think at this stage, along with many other landlords (big and small) they now most likely depend on them to keep existing rents and valuations high.

What I think is interesting is the €20 Billion figure he states and that "then we better be ready for the implications of adding €20 billion to our national debt and the need to service that debt when interest rates rise, perhaps sooner rather than later if bond markets are spooked by our spending."

Sounds like a lot of money until you look at yesterday's IMF extreme predictions that we could potentially lose c. €6 Billion per year from the global tax reforms i.e. that's c. €30 Billion every 5 years.

The state really does need a plan B and the only real option that could potentially resolve the issue quickly and with little cost to the state is getting all that vacant, underused or potential housing stock into the market by any means possible IMO

I think you've hit the nail on the head, that they now have an expectation and dependence even on certain levels of rent being achieved, which is part of the problem. So I wonder how supportive they would be of a government policy seeking to bring average rents down 30-40% in conjunction with supply increasing significantly!

Hubertj

Amadan Dubh wrote: »

I think you've hit the nail on the head, that they now have an expectation and dependence even on certain levels of rent being achieved, which is part of the problem. So I wonder how supportive they would be of a government policy seeking to bring average rents down 30-40% in conjunction with supply increasing significantly!

And if such a ridiculous policy was implemented resulting in a large number of private landlords being unable to afford their mortgages? Populism is great but real solutions are required.

The_Conductor

Hubertj wrote: »

And if such a ridiculous policy was implemented resulting in a large number of private landlords being unable to afford their mortgages? Populism is great but real solutions are required.

Honestly- I think the cost of debt should not be an allowable cost for tax purposes- for anyone. Go for a flatrate tax on gross rental income- and let folk pay off their mortgages or whatever they'd like to do with the balance- but debt as an allowable cost- has to be hit on the head, across all sectors, for once and for all.

Hubertj

The_Conductor wrote: »

Honestly- I think the cost of debt should not be an allowable cost for tax purposes- for anyone. Go for a flatrate tax on gross rental income- and let folk pay off their mortgages or whatever they'd like to do with the balance- but debt as an allowable cost- has to be hit on the head, across all sectors, for once and for all.

I’m not too knowledgeable on tax allowances for landlords but your suggestion makes sense. I was responding to the posters suggestion policy should drive rents down 40%. That wouldn’t solve anything, in my opinion.

PropQueries

Hubertj wrote: »

And if such a ridiculous policy was implemented resulting in a large number of private landlords being unable to afford their mortgages? Populism is great but real solutions are required.

If a landlord has an unaffordable mortgage, it's most likely due to Celtic Tiger gambling debts.

In many cases, the rent levels during the Celtic Tiger years would never have been enough to meet both principal and interest payments. Their gamble at that time was to leverage up, buy and then sell onto the next investor/unfortunate family home buyer.

It didn't work out and they've had incredible help over the past several years through state/bank forbearance, ever lower interest rates, HAP etc. etc.

It's time to let any landlord with unaffordable mortgages from the Celtic Tiger years go IMO

It's not like their property disappears with them. We have to move on.

JimmyVik

The_Conductor wrote: »

Honestly- I think the cost of debt should not be an allowable cost for tax purposes- for anyone. Go for a flatrate tax on gross rental income- and let folk pay off their mortgages or whatever they'd like to do with the balance- but debt as an allowable cost- has to be hit on the head, across all sectors, for once and for all.

Flat rate tax which is the same for everyone renting properties, be it a REIT or an ordinary owner. Treat them all the same, but fairly. Maybe 25% on rental income after expenses.

awec

PropQueries wrote: »

If a landlord has an unaffordable mortgage, it's most likely due to Celtic Tiger gambling debts.

In many cases, the rent levels during the Celtic Tiger years would never have been enough to meet both principal and interest payments. Their gamble at that time was to leverage up, buy and then sell onto the next investor/unfortunate family home buyer.

It didn't work out and they've had incredible help over the past several years through state/bank forbearance, ever lower interest rates, HAP etc. etc.

It's time to let any landlord with unaffordable mortgages from the Celtic Tiger years go IMO

We have to move on.

This is still just populism.

Ireland needs landlords. The more the small landlords leave the market, the larger the share of the rental market the big funds will obtain. You've been pretty vocal about how terrible this is already.

You can't have your cake and eat it.

JimmyVik

awec wrote: »

This is still just populism.

Ireland needs landlords. The more the small landlords leave the market, the larger the share of the rental market the big funds will obtain. You've been pretty vocal about how terrible this is already.

You can't have your cake and eat it.

The roblem now is that the state depends on the REITs and they know it.
As part of negotiations for the state renting so many properties there was probably something in the conversation like "Let us have all those properties and We will pay you over the odds for these properties and you wont even be taxed on them, and we will make sure you arent taxed while we are in power."

PropQueries

awec wrote: »

This is still just populism.

Ireland needs landlords. The more the small landlords leave the market, the larger the share of the rental market the big funds will obtain. You've been pretty vocal about how terrible this is already.

You can't have your cake and eat it.

We need solvent landlords. Not zombie landlords. And the number of small landlords leaving the market has been grossly over-estimated as many sold due to finally coming out of negative equity etc. etc.

Would the percentage of small landlords leaving the market over the past several years still be in the single digits?

derekgine3

I see the protest for Palestine rally in Dublin planned for this Saturday has been cancelled, while i do agree with the sentiment that Israel is complete scum and needs to be stopped we could really do with a mass rally against Gov/Cuckoo funds that is the root cause of this housing crisis.

awec

PropQueries wrote: »

We need solvent landlords. Not zombie landlords. And the number of small landlords leaving the market has been grossly over-estimated as many sold due to finally coming out of negative equity etc. etc.

Would the percentage of small landlords leaving the market over the past several years still be in the single digits?

Oh I think this is one area where you and I are in complete agreement.

DataDude

Hubertj wrote: »

I’m not too knowledgeable on tax allowances for landlords but your suggestion makes sense. I was responding to the posters suggestion policy should drive rents down 40%. That wouldn’t solve anything, in my opinion.

Could you expand on that? I would have thought driving rents down 40% would solve a lot for an awful lot of people. I'd have said it was one of the primary problems that needs to be solved?

Cal4567

Amadan Dubh wrote: »

https://www.irishtimes.com/opinion/reits-are-not-the-enemy-and-emotion-is-not-a-policy-1.4563313?mode=amp



It really says a lot that the only supporters of the regime as is are those directly benefitting from it.

But it is infuriating how they are somehow legitimised by the media giving them a platform rather than interviewing them and critiquing the points raised. This is just gaslighting of the public to allow the lobbyists spout their side of the story unchallenged; "we're not the bad guys, we're actually the good guys".

Note that the author in this piece directly profits from the current state of affairs (ie the housing crisis).

What he said above. Oh, the media. Gotta love em. Have to expect more of this soft sell stuff over the next few weeks while a solution is sought.

I'd hazard a guess over the next short while we'll also start hearing of more leasing schemes the councils have entered into or are about to, but they will be pitched that there's no other alternative.

At least the opposition won't let up on it although government wil push the vaccine roll out as a great success to try and keep us all on side.

Hubertj

DataDude wrote: »

Could you expand on that? I would have thought driving rents down 40% would solve a lot for an awful lot of people. I'd have said it was one of the primary problems that needs to be solved?

I’d be very surprised if many private landlords are enjoying a 40% premium on rent over mortgage. Intentional policy of make their mortgage unaffordable? Sounds like populist boll*x to punish the evil landlord class. I don’t see how that solves the issue of their being insufficient supply in the market. If there is sufficient supply consumers have more more choice to find a better deal in the market. That will result in rents falling. A better solution is a vacancy tax which kicks in after 2 months (or whatever the average duration of vacancy is). Then we would see if there are the magical hundreds of thousands of vacant units hiding in plane sight around the country (excluding the luxury developments in d2 and d4 everyone knows about).

timmyntc

awec wrote: »

This is still just populism.

Ireland needs landlords. The more the small landlords leave the market, the larger the share of the rental market the big funds will obtain. You've been pretty vocal about how terrible this is already.

You can't have your cake and eat it.

The idea that we need to keep rents high to "protect" the small landlord - absurd.

All landlords, big or small take a risk when they take on debts to pay for their property. If the rent doesnt cover the mortgage, tough ****. You either pay for it out of your own pocket (you are getting an asset after all) or you sell up.

So long as its not bought by an investment fund and kept empty, then there will be no loss of housing/rental stock.


People being forced to sell because their investment is no longer profitable is a sign of a functioning market. Not all speculators will make profit, some have to lose out.

JimmyVik

Hubertj wrote: »

I’d be very surprised if many private landlords are enjoying a 40% premium on rent over mortgage. Intentional policy of make their mortgage unaffordable? Sounds like populist boll*x to punish the evil landlord class. I don’t see how that solves the issue of their being insufficient supply in the market. If there is sufficient supply consumers have more more choice to find a better deal in the market. That will result in rents falling. A better solution is a vacancy tax which kicks in after 2 months (or whatever the average duration of vacancy is). Then we would see if there are the magical hundreds of thousands of vacant units hiding in plane sight around the country (excluding the luxury developments in d2 and d4 everyone knows about).

Problem is that by putting a ceiling on rent increases the government have put a floor on rents.
You can advertise a property as long as you want for €2500 pm but if nobody takes it not much you can do about that unless you want to put the price down. If you dont put it down it will take longer to rent. PErsonally I think some this October there will be lots of takers for these rentals/
But I dont see how the government can slap a vacancy tax on it if they dont want to put the price down for fear of getting caught by the same governments rent controls for the foreseeable.

DataDude

Hubertj wrote: »

I’d be very surprised if many private landlords are enjoying a 40% premium on rent over mortgage. Intentional policy of make their mortgage unaffordable? Sounds like populist boll*x to punish the evil landlord class. I don’t see how that solves the issue of their being insufficient supply in the market. If there is sufficient supply consumers have more more choice to find a better deal in the market. That will result in rents falling. A better solution is a vacancy tax which kicks in after 2 months (or whatever the average duration of vacancy is). Then we would see if there are the magical hundreds of thousands of vacant units hiding in plane sight around the country (excluding the luxury developments in d2 and d4 everyone knows about).

A.) Unless you bought at particularly bad times (e.g. 2004 -2007) and at a very high LTV, I would say it's almost certain that you would have at least that, if not more given that mortgage interest rates are c.2.5% and investment yields are >5%.
B.) Taking out debt to invest in an asset is risky. There is no inherent right for that investor to achieve a return that exceeds both the cost of their debt and repays their capital. Rental yields remain remarkably attractive at >5% when compared to other assets, hence the pouring in of international capital. So there are two options, we look to force down rents or apartment prices continue to rocket? I don't think we should be pandering to the poor landlord who is very sad his yield is going to fall from 5% to 3% (still an excellent return in todays terms, even if it doesn't cover his mortgage) in this scenario.

JimmyVik

timmyntc wrote: »

The idea that we need to keep rents high to "protect" the small landlord - absurd.

All landlords, big or small take a risk when they take on debts to pay for their property. If the rent doesnt cover the mortgage, tough ****. You either pay for it out of your own pocket (you are getting an asset after all) or you sell up.

So long as its not bought by an investment fund and kept empty, then there will be no loss of housing/rental stock.


People being forced to sell because their investment is no longer profitable is a sign of a functioning market. Not all speculators will make profit, some have to lose out.

And they are selling. But worse, there are no ordinary investors entering the market now. Its only REITs and councils on the government tit. And they arent interesting in sucking on smaller tits than the government funded ones.

awec

timmyntc wrote: »

The idea that we need to keep rents high to "protect" the small landlord - absurd.

All landlords, big or small take a risk when they take on debts to pay for their property. If the rent doesnt cover the mortgage, tough ****. You either pay for it out of your own pocket (you are getting an asset after all) or you sell up.

So long as its not bought by an investment fund and kept empty, then there will be no loss of housing/rental stock.


People being forced to sell because their investment is no longer profitable is a sign of a functioning market. Not all speculators will make profit, some have to lose out.

Who said we had to do this?

RichardAnd

timmyntc wrote: »

The idea that we need to keep rents high to "protect" the small landlord - absurd.

All landlords, big or small take a risk when they take on debts to pay for their property. If the rent doesnt cover the mortgage, tough ****. You either pay for it out of your own pocket (you are getting an asset after all) or you sell up.

So long as its not bought by an investment fund and kept empty, then there will be no loss of housing/rental stock.


People being forced to sell because their investment is no longer profitable is a sign of a functioning market. Not all speculators will make profit, some have to lose out.

Agreed. The argument that rents needs to be kept high to protect people is bizarre to me. If rents are low, it is because the demand simply isn't there to support higher rents. If the rent becomes so low as to make the renting of the property unprofitable, then the landlord can liquidate the asset and move on. The less of the rental property isn't a problem because if he can only rent it for a song, then the demand for rental property isn't high.

If the landlord makes a loss, what is the problem? Going into business entails a level of risk.

.42.

derekgine3 wrote: »

I see the protest for Palestine rally in Dublin planned for this Saturday has been cancelled, while i do agree with the sentiment that Israel is complete scum and needs to be stopped we could really do with a mass rally against Gov/Cuckoo funds that is the root cause of this housing crisis.

Its not the root cause

Hubertj

DataDude wrote: »

A.) Unless you bought at particularly bad times (e.g. 2004 -2007) and at a very high LTV, I would say it's almost certain that you would have at least that, if not more given that mortgage interest rates are c.2.5% and investment yields are >5%.
B.) Taking out debt to invest in an asset is risky. There is no inherent right for that investor to achieve a return that exceeds both the cost of their debt and repays their capital. Rental yields remain remarkably attractive at >5% when compared to other assets, hence the pouring in of international capital. So there are two options, we look to force down rents or apartment prices continue to rocket? I don't think we should be pandering to the poor landlord who is very sad his yield is going to fall from 5% to 3% (still an excellent return in todays terms, even if it doesn't cover his mortgage) in this scenario.

You make some good points and I’m not in a position to disagree on the numbers as I don’t have any myself. However, look at it from an investment perspective. Landlords are needed, only an idiot would think otherwise. If policies are intentionally introduced to make an investment unattractive why would another investor take that risk? What happens further down the line when another wave of populism leads policy makers to make more bad decisions?

timmyntc

awec wrote: »

Who said we had to do this?

See below in response to a proposal to decrease rents up to 40%.

Hubertj wrote: »

And if such a ridiculous policy was implemented resulting in a large number of private landlords being unable to afford their mortgages? Populism is great but real solutions are required.

awec wrote: »

This is still just populism.

Ireland needs landlords. The more the small landlords leave the market, the larger the share of the rental market the big funds will obtain. You've been pretty vocal about how terrible this is already.

You can't have your cake and eat it.

As if landlords unable to afford mortgage on their (extra) rental property is a justification for maintaining the status quo - yeah no. You have to accept that some people will lose out. Any landlords who cant afford the mortgage after a drop in rents should sell. They took a risk, it didnt pay off. Life goes on.

The state should not be trying to keep these people in business.