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

PropQueries

According to the Irish Times: “ESB plan to convert museum into luxury apartments criticised by city councillors”

Just like when RTÉ sold part of their site at Donnybrook for c. €100m back in 2017, isn’t this just another example of a state body using or selling what is state owned land (owned by me) for the exclusive benefit of relatively few ESB employees?

Shouldn’t the state just take this site for social housing purposes given that the ESB now have no interest in using it? The state will gladly take my front garden (actual real private property paid for by me) to build a bus route etc.

Link to article here: https://www.irishtimes.com/culture/heritage/esb-plan-to-convert-museum-into-luxury-apartments-criticised-by-city-councillors-1.4479543

Villa05

Timing belt wrote:

You would need to see a drop in rents of about 30% for rent to be on par with a mortgage repayment (assuming 30 yrs @ 3%) so there should still be demand to buy for people wanting to live in Dublin and they may have more choices as supply comes online and return it to a more normally functioning housing market with the exception of DLR/Wicklow that will find it more difficult to sell at current prices as these areas have already maxed out on property prices.

Every bubble needs a decent hot air system to blow it up

schmittel wrote:

Bit speechless reading that. Hubert's assessment of councillors IQ seems to be spot on.

In fairness it always seems to be DCC that come out with these hair brained plans while the surrounding councils seem to be far more efficient and deliver affordable housing albeit in low numbers @ value for money for taxpayer

If this thread has proven anything. DCC should not be left to look after your back garden nevermind the centre of our capital city

Hubertj

Villa05 wrote: »

Every bubble needs a decent hot air system to blow it up




In fairness it always seems to be DCC that come out with these hair brained plans while the surrounding councils seem to be far more efficient and deliver affordable housing albeit in low numbers @ value for money for taxpayer

If this thread has proven anything. DCC should not be left to look after your back garden nevermind the centre of our capital city

I wouldn’t ldnt confine acts of stupidity and incompetence to Dublin City council.

PropQueries

Here's an interesting investment property for sale in Ahascragh, Co. Galway.

It was initially looking for €680,000 (price in the original brochure), then it was €490,000. Now it has dropped it's price to €390,000.

I does seem to show that noone knows how to value anything, propertywise, in Ireland anymore IMO

Link to MyHome here: https://www.myhome.ie/residential/brochure/main-street-ahascragh-ballinasloe-galway/4257369

Villa05

Hubertj wrote:

I wouldn’t ldnt confine acts of stupidity and incompetence to Dublin City council.

Neither would I, but they appear to be putting severe pressure on the measuring scale

Cyrus

PropQueries wrote: »

Here's an interesting investment property for sale in Ahascragh, Co. Galway.

It was initially looking for €680,000 (price in the original brochure), then it was €490,000. Now it has dropped it's price to €390,000.

I does seem to show that noone knows how to value anything, propertywise, in Ireland anymore IMO

Link to MyHome here: https://www.myhome.ie/residential/brochure/main-street-ahascragh-ballinasloe-galway/4257369

surely an investment property is valued in relation to its yield?

im not sure no one knows how to value anything any more, id argue more expensive stuff outside the more desirable areas is harder.

Villa05

PropQueries wrote:

I does seem to show that noone knows how to value anything, propertywise, in Ireland anymore IMO

It's not that long ago when nearly one side of the main the main street in Charleville, co Cork sold for less than that at an allsop auction

JimmyVik

PropQueries wrote: »

This is a completely new initiative from DCC and I don't believe anyone could have foreseen this.

According to the Irish Times: "Dublin City Council to consider using public parks for Traveller housing schemes"

DCC also said "We will face opposition to proposals and we would welcome strong political leadership to support new development proposals brought before Councillors for approval."

I don't think anyone can now now seriously disagree with building social homes on Phoenix Park if this latest proposal goes through IMO. And, I'm not saying that in jest.

Link to Irish Times article here: https://www.irishtimes.com/news/social-affairs/dublin-city-council-to-consider-using-public-parks-for-traveller-housing-schemes-1.4479511

I doubt they will be putting halting sites in public parks.



But I have it on good authority from a friend in the know that they are looking to buy a site for sale in North Dublin (well a large house on about an acre of land), to move the halting site from the airport to. Some people who think that the house with a huge garden for sale beside them are going to be getting a lot of new neighbors, instead of one family moving in.

PropQueries

Cyrus wrote: »

surely an investment property is valued in relation to its yield?

im not sure no one knows how to value anything any more, id argue more expensive stuff outside the more desirable areas is harder.

Fully agree with that. And, that's where the state comes in relation to property valuations in Ireland. If the state aren't interested in renting a particular property, even in the cities, what's the potential yield and hence the valuations?

I think this explains all the empty new built apartments and houses in Dublin. If the state won't rent them or subsidise the rent through HAP etc., the demand simply isn't there for the rents they're seeking, so the potential yields and valuations are all out of whack IMO

The state should realise by now that they're the only real customer in town and should act accordingly in their negotiations IMO

Cyrus

PropQueries wrote: »

Fully agree with that. And, that's where the state comes in relation to property valuations in Ireland. If the state aren't interested in renting a particular property, even in the cities, what's the potential yield and hence the valuations?

I think this explains all the empty new built apartments and houses in Dublin. If the state won't rent them or subsidise the rent through HAP etc., the demand simply isn't there for the rents they're seeking, so the potential yields and valuations are all out of whack IMO

The state should realise by now that they're the only real customer in town and should act accordingly in their negotiations IMO

Are there lots of empty new build houses in Dublin ?

Villa05

The senior public servant that repeatedly and strongly advised against the shared ownership scheme appears to be moving to the department of health


Just saying!

PropQueries

Villa05 wrote: »

The senior public servant that repeatedly and strongly advised against the shared ownership scheme appears to be moving to the department of health


Just saying!

Unfortunate as he was one of the few smart ones there IMO

PropQueries

schmittel wrote: »

Not sure about the precise taxation position, but the article I linked yesterday highlights a notable difference.



The difference in government attitude and thus policy is why investors can get twice the yield in Ireland as they do in Germany.

https://www.irishtimes.com/opinion/david-mcwilliams-a-solution-to-irish-house-price-silliness-1.4476967?localLinksEnabled=false

This article is now free to read on David McWillliams's website.

One point he made that I thought was interesting was: "For example, when rents start rising in the German capital, the Berlin authorities impose rent controls. This sends a clear signal to everyone that the State will not tolerate rents that rise far above income – such rents serve only to enrich landowners while penalising everyone else."

Link to David McWilliams's article here: http://www.davidmcwilliams.ie/a-solution-to-irish-house-price-silliness/

Villa05

PropQueries wrote:

One point he made that I thought was interesting was: "For example, when rents start rising in the German capital, the Berlin authorities impose rent controls. This sends a clear signal to everyone that the State will not tolerate rents that rise far above income – such rents serve only to enrich landowners while penalising everyone else."

A simple no cost solution to affordabilty

Sends a signal to land speculators/hoarders as well.
A city's wealth is derived from its people not property. Policy should reflect that.

Taxpayers funds provide much of the infrastructure that allows cities to function, yet private funds can hold the taxpayer to ransom for affordable housing while they are the greatest beneficiary of taxpayer funded infrastructure

Organised theft

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

Hubertj

Villa05 wrote: »

A simple no cost solution to affordabilty

Sends a signal to land speculators/hoarders as well.
A city's wealth is derived from its people not property. Policy should reflect that.

Taxpayers funds provide much of the infrastructure that allows cities to function, yet private funds can hold the taxpayer to ransom for affordable housing while they are the greatest beneficiary of taxpayer funded infrastructure

Organised theft

Yes further regulation and meddling in the market will fix things.

Villa05

Jabari Flabby Dice wrote:

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

Money printing perhaps the cause, which Germans would be strongly against
Notable also that Germany opened up to the refugee crisis a number of years ago

The principle of the measures remain, keep land prices in check and it will be far easier to keep housing affordable

Hubertj

Villa05 wrote: »

The senior public servant that repeatedly and strongly advised against the shared ownership scheme appears to be moving to the department of health


Just saying!

Clearly this is part of the conspiracy. Move him and give him a pay rise to keep him quiet. All in the public eye. Scandalous

PropQueries

Jabari Flabby Dice wrote: »

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

Nothing to do with Berlin privatising their social housing?

"Since 1991, Berlin has sold over 200,000 public homes. Most have since fallen into the hands of a few major corporate giants like Deutsche Wohnen, which alone owns around 110,000 units in the city."

People there should genuinely ask where all this money from the privatisation went. I've been to Berlin and it obviously didn't go into the city's infrastructure IMO

The common thread here appears to be that selling all the taxpayers assets to a few big investors to keep funding pay rises and pensions for a city's civil service isn't a good idea. If they sold them to the occupants at the time at least the city would have benefited somewhat IMO

Which begs the questions. The government and media here have been pushing the German model of housing for the past several years. It seems noone spotted what they really meant was privatisation of social housing to a few big investors and at significant long-term cost to the taxpayer. Looks like we were really sold a pup by both the state and Irish media IMO

Link to article here: https://citymonitor.ai/housing/affordable-housing/berliners-want-to-expropriate-250000-homes-heres-what-stands-in-their-way

Timing belt

Jabari Flabby Dice wrote: »

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

Another article on the topic with no pay wall
"Some things in Berlin are grimly familiar – an acute housing shortage and a political system failing to resolve it. Berlin, like Dublin and the rest of Ireland, also has a strikingly low population density. "

https://www.thejournal.ie/readme/anmeldung-5194958-Sep2020/

hometruths

Jabari Flabby Dice wrote: »

The Berlin rental market has been a complete mess over the last few years. Rent controls have no solved all their problems and they aren't going to.

https://www.irishtimes.com/news/world/europe/berlin-s-rent-cap-could-fall-victim-to-law-of-unintended-consequences-1.4411756
https://www.bloombergquint.com/global-economics/berlin-rent-freeze-cuts-prices-but-it-s-harder-to-find-a-flat

An unintended consequence of the rent controls has been an increase in supply for sale:

In September, the number of Berlin homes for sale was up 13% from the year before, and the increase for those built before 2014 was 23%, ImmoScout reports. Traditionally, Berlin has been a city of tenants, with more than 80% of the population renting. If the trend of buying homes continues, that number will shift toward the national average of about half.

Seems preferable to an increase in the number of vacant properties.

Hubertj

schmittel wrote: »

An unintended consequence of the rent controls has been an increase in supply for sale:



Seems preferable to an increase in the number of vacant properties.

I would be more concerned with medium term consequences. Will regulation lead to a decrease in construction leading to shortages down the line, then back to square 1..?

hometruths

Timing belt wrote: »

Another article on the topic with no pay wall
"Some things in Berlin are grimly familiar – an acute housing shortage and a political system failing to resolve it. Berlin, like Dublin and the rest of Ireland, also has a strikingly low population density. "

https://www.thejournal.ie/readme/anmeldung-5194958-Sep2020/

Grimly familiar indeed:

This is a war between settled Berliners and the young people from near and far who want to establish themselves.

Since the former by definition outnumber the latter at the ballot box, there is no motivation for politicians to reverse course. So, the more this damages Berlin’s economy, the more entrenched it becomes.

hometruths

Hubertj wrote: »

I would be more concerned with medium term consequences. Will regulation lead to a decrease in construction leading to shortages down the line, then back to square 1..?

For sure but the article suggests that the government to have an eye on the medium term:

City officials say the freeze was intended to give renters “breathing room” while Berlin seeks to increase construction to at least 20,000 new homes annually, more than four times the level in 2010. That goal is now in sight as developers in the city last year built 18,999 new homes.

I suspect the government would build the units themselves if they felt the need for it.

Point being they are OK with saying we need some short term pain here to fix longer term problems. Even acknowledging that seems to be better than the situation we're in.

MacronvFrugals

Isnt the fact that investors are running desperately to property for yields a symptom of a wider problem?

The 0% QE taps have made housing markets the world over miserable places, parasitic is a word that fits quite well...

JimmyVik

What we need are 6 - 8% interest rate again.
This low interest mortgage environment is the main reason for house prices being so high if you ask me.

Hubertj

schmittel wrote: »

For sure but the article suggests that the government to have an eye on the medium term:



I suspect the government would build the units themselves if they felt the need for it.

Point being they are OK with saying we need some short term pain here to fix longer term problems. Even acknowledging that seems to be better than the situation we're in.

Strategic thinking by public servants. Who’d a thunk it? I presume they are accountable for their actions (or lack of)...

hometruths

Hubertj wrote: »

Strategic thinking by public servants. Who’d a thunk it? I presume they are accountable for their actions (or lack of)...

Not as accountable as they used to be! (by their superiors)

Timing belt

JimmyVik wrote: »

What we need are 6 - 8% interest rate again.
This low interest mortgage environment is the main reason for house prices being so high if you ask me.

Rates have been falling for 30-40 years so even if they bring rates back to 0% it will crash the stock market, houses prices, companies with debt, governments with debt.... it wouldn't even be a car crash it would be a pile up on the motorway.

JimmyVik

Timing belt wrote: »

Rates have been falling for 30-40 years so even if they bring rates back to 0% it will crash the stock market, houses prices, companies with debt, governments with debt.... it wouldn't even be a car crash it would be a pile up on the motorway.

Credit for house buying is too cheap.

MacronvFrugals

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

I'm assuming mountains of empty properties and hundreds of thousands still in negative equity?

If so it was truly a Faustian bargain!

Timing belt

JimmyVik wrote: »

Credit for house buying is too cheap.

I agree but they can't change it without crashing everything.

Timing belt

MacronvFrugals wrote: »

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

I'm assuming mountains of empty properties and hundreds of thousands still in negative equity?

Banks would have failed ECB stress tests and would have needed another bailout which would have been more tax rises and expenditure cuts. By offloading the debt to investors they got them to bailout the banks but at a cost.

MacronvFrugals

Timing belt wrote: »

Banks would have failed ECB stress tests and would have needed another bailout which would have been more tax rises and expenditure cuts. By offloading the debt to investors they got them to bailout the banks but at a cost.

Thanks Timing,

This combined with Draghi's "Whatever it takes" really did cause a free for all, does anyone else ever get the feeling we(EU) never truly recovered from 2008-2010?

PropQueries

Timing belt wrote: »

Rates have been falling for 30-40 years so even if they bring rates back to 0% it will crash the stock market, houses prices, companies with debt, governments with debt.... it wouldn't even be a car crash it would be a pile up on the motorway.

But isn't that how the west advanced over the past few hundred years i.e. creative destruction.

We now know that the central banks can print cash so maybe it's time to raise interest rates to 5% (inflation or no inflation) and get us back on track.

Let these zombie companies go bust. The central banks can then print money for a guaranteed income for all e.g. €200 per week. Enough to live miserably on, but enough to live but not enough to satisfy 95% of the population. This will get the west back on track again IMO.

hometruths

MacronvFrugals wrote: »

Honest question, what would have happened if the FG/Lab government didn't invite REITs/Investors to Ireland?

I'm assuming mountains of empty properties and hundreds of thousands still in negative equity?

The idea that thousands of people needed to be rescued from negative equity/falling house prices is why we're in the mess we have today.

The best two cures for negative equity are give it time to recover, or if that is not an option, take the hit asap. Instead we tried to speed up the recovery time and tried to ensure that nobody had to take the pain.

If FG/Lab had pursued policies that accepted negative equity as unfortunate but necessary fall out of a housing boom and bust both the housing market and their own political capital would be in better shape now.

Timing belt

MacronvFrugals wrote: »

Thanks Timing,

This combined with Draghi's "Whatever it takes" really did cause a free for all, does anyone else ever get the feeling we(EU) never truly recovered from 2008-2010?

It depends on what you define as recovered. Has the financial condition of the banks and insurance companies in Europe improved so it less likely that they go bust... yes because QE enabled them to rebuild their balance sheets cheaply.

Has it improved for the no the normal consumer... not really.. interest rates are lower and the banks have cash to lend but they can't find customers to lend to because they either already have to much debt or are outside the banks risks appetite. All this while asset prices rise making everything more unaffordable.

Villa05

Hubertj wrote:

Clearly this is part of the conspiracy. Move him and give him a pay rise to keep him quiet. All in the public eye. Scandalous

Sometimes your posts are as useful as an ashtray on a motorbike

Timing belt

schmittel wrote: »

The idea that thousands of people needed to be rescued from negative equity/falling house prices is why we're in the mess we have today.

The best two cures for negative equity are give it time to recover, or if that is not an option, take the hit asap. Instead we tried to speed up the recovery time and tried to ensure that nobody had to take the pain.

If FG/Lab had pursued policies that accepted negative equity as unfortunate but necessary fall out of a housing boom and bust both the housing market and their own political capital would be in better shape now.

I agree with you on this, just look at USA and how they did it...but you need to remember that if they took the 'hit asap' in Ireland it would have had a major impact on the banks which at the point in time were owned by the government. If someone in negative equity walks away it is the bank that is left holding the loss which means the government underwriting the debt at a time when they had the IMF on their backs.

MacronvFrugals

Dublin City Council is told to be ‘very careful’ when rezoning industrial land for housing

The council has surveyed the potential of underused industrial estates to provide land for housing. As part of the review of all low-intensity industrial areas, a number of industrial sites have already been rezoned for more intensive residential developments.

https://www.businesspost.ie/houses/dublin-city-council-is-told-to-be-very-careful-when-rezoning-industrial-land-for-housing-e5690d67

Timing belt

PropQueries wrote: »

But isn't that how the west advanced over the past few hundred years i.e. creative destruction.

We now know that the central banks can print cash so maybe it's time to raise interest rates to 5% (inflation or no inflation) and get us back on track.

Let these zombie companies go bust. The central banks can then print money for a guaranteed income for all e.g. €200 per week. Enough to live miserably on, but enough to live but not enough to satisfy 95% of the population. This will get the west back on track again IMO.

More than just Zombie companies would go bust.... you are taking about total sectors of the economy going bust and massive wealth destruction.

hometruths

Timing belt wrote: »

I agree with you on this, just look at USA and how they did it...but you need to remember that if they took the 'hit asap' in Ireland it would have had a major impact on the banks which at the point in time were owned by the government. If someone in negative equity walks away it is the bank that is left holding the loss which means the government underwriting the debt at a time when they had the IMF on their backs.

You also need to remember that the losses at the banks/government level were realised anyway when they sold loan portfolios for cents in the euro.

What the government did was realise the losses by selling the loans, and then create an environment where the security for those loans could not be enforced, resulting in a decade of grossly misallocated capital.

If that capital had been reinvested and allocated efficiently we'd all be much better off.

PropQueries

MacronvFrugals wrote: »

Dublin City Council is told to be ‘very careful’ when rezoning industrial land for housing




https://www.businesspost.ie/houses/dublin-city-council-is-told-to-be-very-careful-when-rezoning-industrial-land-for-housing-e5690d67

Did they give a reason on why they should be careful? If solving the supposed housing shortage really is their primary concern and they've already signaled they intend to use our public parks for housing, what do they really have to lose at this stage?

MacronvFrugals

schmittel wrote: »

The idea that thousands of people needed to be rescued from negative equity/falling house prices is why we're in the mess we have today.

The best two cures for negative equity are give it time to recover, or if that is not an option, take the hit asap. Instead we tried to speed up the recovery time and tried to ensure that nobody had to take the pain.

If FG/Lab had pursued policies that accepted negative equity as unfortunate but necessary fall out of a housing boom and bust both the housing market and their own political capital would be in better shape now.

The people (mostly young) that took the pain will deliver SF a majority very soon unless FF/FG sort housing out.

I'm early/mid 20s and there is a very odd wave of discontent among this age group its difficult to quantify

Cyrus

MacronvFrugals wrote: »

The people (mostly young) that took the pain will deliver SF a majority very soon unless FF/FG sort housing out.

I'm early/mid 20s and there is a very odd wave of discontent among this age group its difficult to quantify

the people in early to mid 20s didnt take the pain though.

MacronvFrugals

PropQueries wrote: »

Did they give a reason on why they should be careful? If solving the supposed housing shortage really is their primary concern and they've already signaled they intend to use our public parks for housing, what do they really have to lose at this stage?

It seems they're worried about speculation Props -

Dr Dáithí Downey, head of housing policy and research with Dublin City Council, said the council needed to proceed cautiously with further plans to rezone lands, however, to avoid speculation of land prices.

“We have to be very careful not to trigger any kind of major assetisation or any kind of major speculation on the land use that we have,” Downey told a public forum discussing the new Dublin City Development Plan last week.

hometruths

MacronvFrugals wrote: »

The people (mostly young) that took the pain will deliver SF a majority very soon unless FF/FG sort housing out.

I'm early/mid 20s and there is a very odd wave of discontent among this age group its difficult to quantify

A few years ago I would have ranted and raved about this, soapboxed about how the young have short memories, and generally argued against the idea that you should vote SF.

But at this stage I completely understand and would probably think the same if I was your age!

It seems that, internally at least, FF may have sensed they way the wind is blowing:

Mr Ó Broin said on Tuesday morning: “It’s clear that there’s a shift in Fianna Fáil’s position in relation to Sinn Féin and I welcome that.” His remarks came on RTÉ Radio One’s Today with Claire Byrne Show. He also said that in his view the “crucial thing on the other side of the general election is are parties going to talk about doubling capital investment to deliver large volumes of social and affordable homes for working families”.

If true this is a welcome development. Nightmare scenario is FF and FG paint themselves into a corner re SF, then SF are biggest party in next election and their only option to form a government is with PBP etc. That is truly terrifying!

MacronvFrugals

schmittel wrote: »

But at this stage I completely understand and would probably think the same if I was your age!

It seems that, internally at least, FF may have sensed they way the wind is blowing:

I dont think its just internally anymore schmittel, from yesterday's Irish Times

FF TDs would not exclude Sinn Féin coalition after next election

While some party members expressed concerns about Sinn Féin’s policies, almost every Fianna Fáil TD who responded to queries from The Irish Times expressed a willingness to sit down with Sinn Féin after the next election.

Some TDs also said they believed the party made a mistake in not doing this after the 2020 general election.

Those who are open to the possibility include senior party members such as Jim O’Callaghan as well as Ministers of State Robert Troy and James Browne.

https://www.irishtimes.com/news/politics/ff-tds-would-not-exclude-sinn-f%C3%A9in-coalition-after-next-election-1.4478483

hmmm

SF's plan to fill the place with council housing estates isn't the answer. We tried that before and it was a disaster, it's not going to be different this time.

What needs to happen is reform of the planning system, remove the influence of NIMBYs and other objectors, and build where people want to live. The demand is there, the supply isn't.

HansKroenke

PropQueries wrote: »

So there we go. We have the solution to the supposed lack of land problem for building houses in the city. It's called Phoenix Park

I think the better solution is to get rid of golf clubs inside the M50 and use that land for parks and housing / new villages within Dublin.