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

Cyrus

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

this gets trotted out a lot,

which are the countries where people treat houses as basic necessities? Where the main cities dont have more expensive houses than the more rural parts of the country?

Cyrus

MacronvFrugals wrote: »

Some interesting points raised regarding retail and tourism going forward in today's IT -


Zombie businesses lurk beneath State supports for economy







https://www.irishtimes.com/business/economy/zombie-businesses-lurk-beneath-state-supports-for-economy-1.4482353?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fzombie-businesses-lurk-beneath-state-supports-for-economy-1.4482353

domestic retail is in big trouble for sure, that was coming but this has accelerated it a lot.

other sectors benefit though, the transport businesses are booming, the more creative cafe's and restaurants are doing ok and will do very well when people can eat on site. Domestic hospitality will boom once people can travel again but are reluctant to abroad.

there will be winners and losers.

Billythekid19

Cyrus wrote: »

this gets trotted out a lot,

which are the countries where people treat houses as basic necessities? Where the main cities dont have more expensive houses than the more rural parts of the country?

Nobody is denying that to live in capital cities all over the world you need to pay a premium
A 4 bed detached house 10km from say cork or Galway city will easily still set you back half a million quid. This isnt the case 10km from capital cities like Copenhagen , Vienna or Berlin.

JimmyVik

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

Bet you anything if they lowered CGT to 15 - 20% you would see plenty of sales.
If you stood to make €50K on a sale and would have to hand a third of it to revenue, you might just say screw that, i wont bother selling it.

Villa05

Cyrus wrote:

Where the main cities dont have more expensive houses than the more rural parts of the country?

Are they the ones that are highly developed with very limited supply of land?
There is nothing wrong with people treating housing as more than a basic requirement. There is a market for that

There also needs to be a market for where it is exactly a basic requirement,

We are in trouble because housing is now a luxury product

MacronvFrugals

Cyrus wrote: »

domestic retail is in big trouble for sure, that was coming but this has accelerated it a lot.

other sectors benefit though, the transport businesses are booming, the more creative cafe's and restaurants are doing ok and will do very well when people can eat on site. Domestic hospitality will boom once people can travel again but are reluctant to abroad.

there will be winners and losers.

I don't think the government shares your confidence

Government drive to 'upskill and reskill' people in the hospitality sector


https://www.thejournal.ie/reskill-hospitality-5352581-Feb2021/

Cyrus

Billythekid19 wrote: »

Nobody is denying that to live in capital cities all over the world you need to pay a premium
A 4 bed detached house 10km from say cork or Galway city will easily still set you back half a million quid. This isnt the case 10km from capital cities like Copenhagen , Vienna or Berlin.

this is 20km from berlin?

https://tranio.com/germany/adt/1930171/

Lyngby 12 km outside of Copenhagen, this is 875k and looks like a sh!thole

https://home.dk/boligkatalog/lyngby-taarbaek/2800/huse-villaer/egegaardsvej_24a_1530000671.aspx

So again, i ask the same question.

Cyrus

Villa05 wrote: »

Are they the ones that are highly developed with very limited supply of land?
There is nothing wrong with people treating housing as more than a basic requirement. There is a market for that

There also needs to be a market for where it is exactly a basic requirement,

We are in trouble because housing is now a luxury product

only in parts of the country.

PropQueries

JimmyVik wrote: »

Bet you anything if they lowered CGT to 15 - 20% you would see plenty of sales.
If you stood to make €50K on a sale and would have to hand a third of it to revenue, you might just say screw that, i wont bother selling it.

That means it’s probably an investment property and not their normal dwelling. A cheaper and easier way is for the state to put an opportunity cost (i.e. a proper tax e.g an annual 5% tax like Washington D.C.) on what this really is i.e. speculation and hoarding.

Tax reliefs should be primarily aimed at new builds as they add to supply. There’s no benefit to the state, economy or society from granting lower taxes or tax reliefs on an investment property that was built pre-bust IMO.

Villa05

Cyrus wrote:

Domestic hospitality will boom once people can travel again but are reluctant to abroad.

I'd doubt it, Ireland is a high cost destination so it will take time to rebuild the market.
The locals fed up with high costs will be taking their holidays elsewhere

A situation exacerbated by artificially high priced property doing yet more damage to the economy

PropQueries

MacronvFrugals wrote: »

I don't think the government shares your confidence

Government drive to 'upskill and reskill' people in the hospitality sector


https://www.thejournal.ie/reskill-hospitality-5352581-Feb2021/

Even pre-Covid this was a growing concern. As more and more retail shut up shop and were being replaced with cafes etc., it just added to the number of cafes etc. competing for the same number of customers which negatively impacted them all.

This was a very big issue in the shopping centres in the UK pre-Covid.

JimmyVik

PropQueries wrote: »

That means it’s probably an investment property and not their normal dwelling. A cheaper and easier way is for the state to put an opportunity cost (i.e. a proper tax e.g an annual 5% tax like Washington D.C.) on what this really is i.e. speculation and hoarding.

Tax reliefs should be primarily aimed at new builds as they add to supply. There’s no benefit to the state, economy or society from granting lower taxes or tax reliefs on an investment property that was built pre-bust IMO.

I love how the Irish love to solve every problem by slapping a tax on it instead of an incentive. Its no wonder property and rent costs are going through the roof.
Especially given that the greatest success story in the history of the state is what was done with corporate tax.

hometruths

Hubertj wrote: »

Listened to David McWilliams and some interesting perspectives in it alright. Good for people to listen to.

I don't like his schtick but he makes a lot of sense on this subject. Essentially his view is when it comes to property we have become a nation of greater fools, as we are buying and selling property to each other at ever increasing prices, whilst failing to realise we are actually all worse off.

He's absolutely right.

Cyrus

Villa05 wrote: »

I'd doubt it, Ireland is a high cost destination so it will take time to rebuild the market.
The locals fed up with high costs will be taking their holidays elsewhere

A situation exacerbated by artificially high priced property doing yet more damage to the economy

Im talking about the locals, people may be reluctant to go abroad but they will holiday in ireland, try booking any popular irish hotel for june or july, it was the same last summer.

people have money for holidays, they have had very little else to spend it on.

hometruths

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

The opposite is equally true which is why the situation can change very quickly.

If people see prices falling, they'll think I better sell my 500k house now, because it might only be worth 475k in twelve months time.

Which is why I think the idea of a max 5% mini correction/soft landing is unlikely. If prices do drop 5% it will be enough to trigger a much larger drop. IMO.

Cyrus

schmittel wrote: »

The opposite is equally true which is why the situation can change very quickly.

If people see prices falling, they'll think I better sell my 500k house now, because it might only be worth 475k in twelve months time.

Which is why I think the idea of a max 5% mini correction/soft landing is unlikely. If prices do drop 5% it will be enough to trigger a much larger drop. IMO.

prices were falling in parts of the market from 18-20 slowly, how do you explain that?

PropQueries

JimmyVik wrote: »

I love how the Irish love to solve every problem by slapping a tax on it instead of an incentive. Its no wonder property and rent costs are going through the roof.
Especially given that the greatest success story in the history of the state is what was done with corporate tax.

A tax on vacant investment properties uses the exact same logic as the reason for imposing water charges. It's apparently in limited supply, so a cost must be imposed so the user understands that there's a cost to the wider society and economy of not using it efficiently.

The low taxes on MNC, REITs etc. actually have logic as they wouldn't have set-up here or built those apartments in the first place without such incentives. There's no need to incentivise an owner of an investment property (through lower taxes, reliefs etc.) that was built pre-bust to sell as he can't pick up the property and move it to a lower tax country so an annual vacant tax would definitely work in that case. The MNCs and REITs can pack up and move or invest in building elsewhere.

It's why the plan going forward will be to raise taxes on property, inheritance taxes etc. as the owners can't pack up and leave with their asset. Michael McGrath stated yesterday that he intends to employ c. 70,000 additional public servants on a permanent over the next 2 years. He also said this will need to be paid for. He didn't clarify on how this permanent additional yearly expenditure will be paid for though.

hometruths

Cyrus wrote: »

prices were falling in parts of the market from 18-20 slowly, how do you explain that?

I suspect it can be explained because demand was falling, unless you have some sort of greater insight I am missing?

cnocbui

Billythekid19 wrote: »

McWilliams made a great point in that podcast. Along with covid, part of the reason people aren't selling their houses in 2021 is because prices are rising. Why sell my 500k house now when I can sell it for 525k in 12 months if the rising market continues.
It says more about our greed than anything else really. We see houses as investments as opposed to other countries who treat them as basic necessities.

Wouldn't agree with that in the slightest. The Irish are probably among the least domicile mobile people in the OECD. Australians and Kiwis would treat housing as an investment vehicle to far higher extent than the Irish.

My late brother in law, back in Oz, was an electrician/paramedic, and he had his own home, two investment properties on interest-only mortgages and was looking to buy a third. The number of interest only loans in Oz is terrifying.

McWilliams doesn't speak for me. I am currently trying to sell one property, and as soon as it looks like a sale will progress to completion, I'll be putting my home on the market also. I welcome the trend of rising prices with open arms.

Cyrus

schmittel wrote: »

I suspect it can be explained because demand was falling, unless you have some sort of greater insight I am missing?

bravo

and why did they fall slowly rather than trigger larger falls as you suggested may happen now?

Villa05

JimmyVik wrote:

I love how the Irish love to solve every problem by slapping a tax on it instead of an incentive. Its no wonder property and rent costs are going through the roof. Especially given that the greatest success story in the history of the state is what was done with corporate tax.

I await the success stories of allowing rents and investment funds collect rent and profits tax free

Cyrus wrote:

Im talking about the locals, people may be reluctant to go abroad but they will holiday in ireland, try booking any popular irish hotel for june or july, it was the same last summer.

Aided by the travel ban I'm sure. Is there figures available on the level of cancellations for last year

June/July is open season on families with kids. What happens when everywhere is open

Cyrus

cnocbui wrote: »

Wouldn't agree with that in the slightest. The Irish are probably among the least domicile mobile people in the OECD. Australians and Kiwis would treat housing as an investment vehicle to far higher extent than the Irish.

My late brother in law, back in Oz, was an electrician/paramedic, and he had his own home, two investment properties on interest-only mortgages and was looking to buy a third. The number of interest only loans in Oz is terrifying.

McWilliams doesn't speak for me. I am currently trying to sell one property, and as soon as it looks like a sale will progress to completion, I'll be putting my home on the market also. I welcome the trend of rising prices with open arms.

im still waiting for a location that treats houses as basic necessities, as the copenhagen and berlin example didnt hold up.

people also need to realise mcwilliams lives in a 7 figure house on the southside so he doesnt speak for most of them either :P

Cyrus

Villa05 wrote: »

I await the success stories of allowing rents and investment funds collect rent and profits tax free



Aided by the travel ban I'm sure. Is there figures available on the level of cancellations for last year

June/July is open season on families with kids. What happens when everywhere is open

yes aided by the travel ban no doubt. but people will holiday wherever they can, if thats local, they will do that.

when every where is open we will have foreign tourists coming back.

hometruths

Cyrus wrote: »

bravo

and why did they fall slowly rather than trigger larger falls as you suggested may happen now?

because they did not reach a tipping point. What's your point?

Villa05

schmittel wrote:

I don't like his schtick but he makes a lot of sense on this subject. Essentially his view is when it comes to property we have become a nation of greater fools, as we are buying and selling property to each other at ever increasing prices, whilst failing to realise we are actually all worse off.

schmittel wrote:

He's absolutely right.

All other arguments fall flat on their face when you realise that.

All the noise on this thread and all around us is just a distraction from that core point. Just fear and greed when in reality we are all suckers

cnocbui

PropQueries wrote: »

That means it’s probably an investment property and not their normal dwelling. A cheaper and easier way is for the state to put an opportunity cost (i.e. a proper tax e.g an annual 5% tax like Washington D.C.) on what this really is i.e. speculation and hoarding.

Tax reliefs should be primarily aimed at new builds as they add to supply. There’s no benefit to the state, economy or society from granting lower taxes or tax reliefs on an investment property that was built pre-bust IMO.

Oh, ffs! What is the difference between an investment property for sale and a new builf for sale? They both add to the pool of houses for sale.

The question was rehtorical, I'm not actually interested in one of your twisted logic replies.

Cyrus

schmittel wrote: »

because they did not reach a tipping point. What's your point?

the point i'm making is obvious.

hometruths

Cyrus wrote: »

i dont think i need to spell it out?

Please do, I am not as smart as you give me credit for.

MacronvFrugals

Cyrus wrote: »

the point i'm making is obvious.

Get over yourself!

Cyrus

MacronvFrugals wrote: »

Get over yourself!

after you :rolleyes:

Cyrus

MacronvFrugals wrote: »

I don't think the government shares your confidence

Government drive to 'upskill and reskill' people in the hospitality sector


https://www.thejournal.ie/reskill-hospitality-5352581-Feb2021/

“The sector has temporarily had to close and I want to ensure we use this time to support the sector in preparing for when they can resume business. The hospitality and tourism sectors are vital to the Irish economy and we must support it to recover and grow.”

Looks like they do share my confidence.

PropQueries

cnocbui wrote: »

Oh, ffs! What is the difference between an investment property for sale and a new builf for sale? They both add to the pool of houses for sale.

The question was rehtorical, I'm not actually interested in one of your twisted logic replies.

The difference is as follows:

1. To encourage an investor from outside the country to build new houses in Ireland that do not yet exist, tax incentives can work. Carrots can work here, but not sticks as we don't have his investment yet.

2. To incentivise someone who already is resident here and we already have his investment and he owns a vacant investment property, the state can use either tax incentives (carrot) or a vacant property tax (stick). Both Carrots and Sticks can work in this case.

Given the limited resources of the state, using tax incentives in 1 above may be a good idea but using tax incentives in 2 makes absolutely no sense. The stick is a much better use of the states resources in 2.

hometruths

Cyrus wrote: »

the point i'm making is obvious.

Have you ever heard of the Dunning-Kruger effect?

SmokyMo

Cyrus wrote: »

im still waiting for a location that treats houses as basic necessities, as the copenhagen and berlin example didnt hold up.

people also need to realise mcwilliams lives in a 7 figure house on the southside so he doesnt speak for most of them either :P

Singapore?

Hubertj

Villa05 wrote: »

All other arguments fall flat on their face when you realise that.

All the noise on this thread and all around us is just a distraction from that core point. Just fear and greed when in reality we are all suckers

Definitely a lot of noise in this thread especially from those who think the solutions are so simple

PropQueries

Hubertj wrote: »

Definitely a lot of noise in this thread especially from those who think the solutions are so simple

I think the solution is very simple.

1. Remove all taxation on profits for the building of all three-bed semi detached units that are sold for under €150k. A lower tax on all units that are sold for under €200k etc. That's the carrot.

2. Make it compulsory (backed up with significant fines) to register all vacant properties in the state and they must declare are they for rent, a second home, holiday home, being refurbished etc. so they can be easily checked. (Stick)

3. Slap a vacant property tax of 5% (similar to Washington D.C.) and applied monthly (5% / 12) on all vacant properties in the state until they are permanently occupied. (Stick)

4. Slap a 10% annual tax on all sites with planning permission. Also applied on a monthly basis from the moment they are granted planning permission until they are built upon and sold. (Stick)

5. Apply a similar tax on all land that is zoned residential in high demand areas but they haven't yet applied for planning permission. (Stick)

6. Back up all the above with the possibility of a compulsory purchase order.

cnocbui

PropQueries wrote: »

I think the solution is very simple.

1. Remove all taxation on profits for the building of all three-bed semi detached units that are sold for under €150k. A lower tax on all units that are sold for under €200k etc. That's the carrot.

2. Make it compulsory (backed up with significant fines) to register all vacant properties in the state and they must declare are they for rent, a second home, holiday home, being refurbished etc. so they can be easily checked. (Stick)

3. Slap a vacant property tax of 5% (similar to Washington D.C.) and applied monthly (5% / 12) on all vacant properties in the state until they are permanently occupied. (Stick)

4. Slap a 10% annual tax on all sites with planning permission. Also applied on a monthly basis from the moment they are granted planning permission until they are built upon and sold. (Stick)

5. Apply a similar tax on all land that is zoned residential in high demand areas but they haven't yet applied for planning permission. (Stick)

Karl Marx has rissen from the dead, unfortunately.

PropQueries

cnocbui wrote: »

Karl Mark has rissen from the dead, unfortunately.

And he lives in Washington D.C. apparently

hometruths

PropQueries wrote: »

I think the solution is very simple.

1. Remove all taxation on profits for the building of all three-bed semi detached units that are sold for under €150k. A lower tax on all units that are sold for under €200k etc. That's the carrot.

2. Make it compulsory (backed up with significant fines) to register all vacant properties in the state and they must declare are they for rent, a second home, holiday home, being refurbished etc. so they can be easily checked. (Stick)

3. Slap a vacant property tax of 5% (similar to Washington D.C.) and applied monthly (5% / 12) on all vacant properties in the state until they are permanently occupied. (Stick)

4. Slap a 10% annual tax on all sites with planning permission. Also applied on a monthly basis from the moment they are granted planning permission until they are built upon and sold. (Stick)

5. Apply a similar tax on all land that is zoned residential in high demand areas but they haven't yet applied for planning permission. (Stick)

6. Back up all the above with the possibility of a compulsory purchase order.

I'd agree with most of that but apply it to RPZs. Taxing empties or holiday homes in Longford and Caherdaniel would be counterproductive.

I'd also scrap the rent caps in RPZs - let the market fix the rent.

woejus

cnocbui wrote: »

Karl Mark has rissen from the dead, unfortunately.

His brother Peter will be along shortly to give all landlords a haircut. A haircut... I'll get me coat

cnocbui

PropQueries wrote: »

I think the solution is very simple.

1. Remove all taxation on profits for the building of all three-bed semi detached units that are sold for under €150k. A lower tax on all units that are sold for under €200k etc. That's the carrot.

...

I'll take 4. When can you deliver?

Hubertj

schmittel wrote: »

I'd agree with most of that but apply it to RPZs. Taxing empties or holiday homes in Longford and Caherdaniel would be counterproductive.

I'd also scrap the rent caps in RPZs - let the market fix the rent.

Ah caherdaniel, I look forward to it in august. 7 days of sunshine last year

hometruths

Hubertj wrote: »

Ah caherdaniel, I look forward to it in august. 7 days of sunshine last year

Cracking spot. Airbnbs and holiday homes have their place for sure - it's just not in D2.

fago

Anyway back to statistics. CSO PPR report reflects a recovery in final Q 2020

Dipping into the figures a bit more the recovery seems to be driven by new builds, with 2nd hand relatively static YoY.

New build annual increase 2%, existing .2%

https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexdecember2020/newandexistingdwellings/

Perhaps 2nd hand starting to reflect the higher renovation costs which I know has caused sales to fall through.

decreds

Cyrus wrote: »

bravo

and why did they fall slowly rather than trigger larger falls as you suggested may happen now?

Probably due to the fact we weren't in the middle of a pandemic and staring down the barrel of the biggest recession in history.

MacronvFrugals

If ever in any doubt never forget vested interests control more levers of power than we'd ever like to admit in this state.

PAC to probe temporary school accommodation following €56m spend over two years


https://www.irishexaminer.com/news/politics/arid-40225622.html

Cyrus

schmittel wrote: »

Have you ever heard of the Dunning-Kruger effect?

so which is it, you arent as smart as i think you are or im not as smart as i think i am,

make up your mind

and if you want to question my intelligence just come out and do it rather than try to be snide like that.

Cyrus

SmokyMo wrote: »

Singapore?

have you seen property prices in singapore? presume you are being faecitious

Cyrus

decreds wrote: »

Probably due to the fact we weren't in the middle of a pandemic and staring down the barrel of the biggest recession in history.

well that remains to be seen now doesnt it, tales of our demise have been circulating since march last year yet the world hasnt ended yet.

and id argue we are at the tail end of the pandemic.

combat14

and the warning about the sustainability of the state"s future debt repayments sagely commence


Historically low interest rates will not last forever - Makhlouf
Central Bank governor says State must plan its return to a more sustainable footing


https://www.irishtimes.com/business/economy/historically-low-interest-rates-will-not-last-forever-makhlouf-1.4483026?mode=amp