Irish Property Market chat II - *read mod note post #1 before posting*

Zenify

Cyrus wrote: »

Why were houses in Dublin more expensive prior to funds ?

I'm not arguing that land in Dublin shouldn't cost more than the middle of nowhere. I completely understand that is should cost more because of housing demand. I'm only arguing that it costs so much because of artificial demand caused by stupid tax incentives, state purchases, REITs etc etc....

Beigepaint

yagan wrote: »

Greed. It's policy sculpted by landlord TDs.

If it happens - it’s policy.
If it doesn’t happen - it’s policy.

Let’s not allow politicians play dumb anymore.
Paddy has bumbled too long.

cnocbui

PropQueries wrote: »

Yes. Of course it should IMO. We're an extremely low population density island off an island off europe. I don't see how any standard 3-bed anywhere in Ireland costs any more than c. €150k IMO

Ther's far more land in Australia per person than in Ireland, but the median house price there in Sydney is up $100,000 in just three months to $1.3 M - or €832,000.

Auckland's average is €670,000

Vacouver's average is €874,000

London's average is €678,273

Edinburgh's average is £274,972

But you think a house in Dublin - a capital city - should cost €275,000?

You are not being realistic.

Beigepaint

cnocbui wrote: »

Ther's far more land in Australia per person than in Ireland, but the median house price there is up $100,000 in just three months to $1.3 M - or €832,000.

Auckland's average is €670,000

Vacouver's average is €874,000

London's average is €678,273

Edinburgh's average is £274,972

But you think a house in Dublin - a capital city - should cost €275,000?

You are not being realistic.

All bubbles driven by foreign investors. The market is unrealistic.

John1648

Dear Board.ie contributors, here comes a kind request to you to critique such a small investment idea:

I am a cash buyer, looking at buying a property in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

The calculation is like this: 1300 EUR monthly rent, purchase price - 180 000 EUR.

I am currently looking at an apartment in Citywest area (Carrigmore Crescent), 2 mins from LUAS, next to the shopping centre, 1-bedroom, 42 sqm, in pretty good shape, furnished.

Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?
I currently reside abroad, so would not pay the PRSI.

My calculations would go like this:

Apartment Rented for 1300 a month.

Rental Income per year 15600.

Expenses:

Mgmt Charges 1050
Letting and property management fees: 1550
Tax advisory costs: 250

Total allowed deductible expenses 2850.
Local property tax: 250
Income: 12750

Income Tax at 20pc (minus the allowance of 1650) is 900; PRSI 0 pc; , USC 0.5 pc is 80

Overall Profit: 15600-1050-250-1550-250-900-80 is 11770.

Does it make sense?

Many thanks!

John

Balluba

Zenify wrote: »

I've never been to a protest before. I've never been motivated enough, but I'm ready to take to the streets as soon as we are allowed!

Hopefully we can get a movement going because we all know whatever measures they come up with next week will be insufficient.

I too will get out and March when a protest is organised and not just to highlight the first time buyers problem. There are many different kinds of people who can not afford a house at the moment. Young singletons cannot afford to buy on one salary. Older singletons cannot afford to buy because of reduced capacity to borrow due to age. There are older people who sold country homes who wish to live near their children in Dublin but can not raise the extra money needed.
Also there are couples who have separated possibly still in negative equity who struggle to buy again.

cnocbui

Beigepaint wrote: »

All bubbles driven by foreign investors. The market is unrealistic.

And Dublin isn't, vis a vis REITs? 78% of property funding in Dublin was foreign, between 2017 and 2019. Dublin was the third most attractive city in Europe for foreign investors in 2018. Globalisation has been great for the 0.01 percenters. NZ is mostly closed to foreign property investors.

Zenify

Balluba wrote: »

I too will get out and March when a protest is organised and not just to highlight the first time buyers problem. There are many different kinds of people who can not afford a house at the moment. Young singletons cannot afford to buy on one salary. Older singletons cannot afford to buy because of reduced capacity to borrow due to age. There are older people who sold country homes who wish to live near their children in Dublin but can not raise the extra money needed.
Also there are couples who have separated possibly still in negative equity who struggle to buy again.

Some of my single friends have decided to leave the country after lockdown and I will be out on their behalf too. Property owners should also protest on behalf of their future/present children. We need to unify all together.

I think we have finally reached a stage where even the majority of property owners want lower prices.

Bass Reeves

Balluba wrote: »

I too will get out and March when a protest is organised and not just to highlight the first time buyers problem. There are many different kinds of people who can not afford a house at the moment. Young singletons cannot afford to buy on one salary. Older singletons cannot afford to buy because of reduced capacity to borrow due to age. There are older people who sold country homes who wish to live near their children in Dublin but can not raise the extra money needed.
Also there are couples who have separated possibly still in negative equity who struggle to buy again.

Young singletons could never buy houses. Why did older singletons not buy houses from 2012-2016 when there was rakes of cheap property around. For many they wanted the 250k 3 bedroom in D4. For older people never sell until you buy in a rising market. I know a older couple that bought a house near where there adult daughters levels in 2013 it cost 110k. It was rented from 2013-2029. In late 2019 started doing up the house. New windows and doors, kitchen, put in solar panels, new stove , re wired and plumbed the house etc. The father roped in two of his son-in-laws to relandscape the outside, install a new patio and sort out 2-3 other things. Cost them over 100k.
They are selling there own house at present and expect it to make over 300k. That's the way you do it

Villa05

Cyrus wrote:

Is unaffordability at new levels ?

With reports during the week that Less and Less people under 35 are able to purchase despite increased skills and educational attainment.

They are then funnelled into the rental market, with rent levels at record highs

I'm not sure why you question it

Cyrus wrote:

What country is there where land sells for the same price regardless of location?

This is not the point I was making.

Why would you be entering taxpayer funded long term leases for housing at record high prices when you can deliver that housing yourself for a fraction of the price through your ownership of the most expensive input

Resolution is within the power of the state yet they have chosen to use taxpayers money to disadvantage the very citizens that are paying it and make the issue worse.

Balluba

Bass Reeves wrote: »

Young singletons could never buy houses. Why did older singletons not buy houses from 2012-2016 when there was rakes of cheap property around. For many they wanted the 250k 3 bedroom in D4. For older people never sell until you buy in a rising market. I know a older couple that bought a house near where there adult daughters levels in 2013 it cost 110k. It was rented from 2013-2029. In late 2019 started doing up the house. New windows and doors, kitchen, put in solar panels, new stove , re wired and plumbed the house etc. The father roped in two of his son-in-laws to relandscape the outside, install a new patio and sort out 2-3 other things. Cost them over 100k.
They are selling there own house at present and expect it to make over 300k. That's the way you do it

I disagree because I bought a house years ago when I was single and so did most of my friends.
2012 -2014 is gone and so is the option to buy a home at a reasonable price.
We are where we are. Houses in Dublin are now unaffordable to many kinds of people. That is why I will March

PropQueries

cnocbui wrote: »

Ther's far more land in Australia per person than in Ireland, but the median house price there in Sydney is up $100,000 in just three months to $1.3 M - or €832,000.

Auckland's average is €670,000

Vacouver's average is €874,000

London's average is €678,273

Edinburgh's average is £274,972

But you think a house in Dublin - a capital city - should cost €275,000?

You are not being realistic.

Well it depends on what a person believes drove prices in Dublin upwards from 2012 onwards and whether someone believes those same forces could work in a similar manner in reverse.

1. Google etc. coming to Dublin.
2. Ever lower interest rates.
3. AirBnB
4. Funds entering and buying up much of that post-crash over-supply.

Point 1 could reverse depending on the outcome of the upcoming global tax reforms.
Point 2 could reverse depending on how the central banks react to inflation.
Point 3 should already be reversing.
Point 4 could reverse based on points 1 and 2 above.

Now, throw in the possible impact of remote working etc. on top of that (we should have more insight on that by September IMO) on the demand for housing in the city and given that there’s also no shortage of land to build on in Dublin and I don’t think it’s beyond the realms of possibility for house prices in Dublin to fall to the current selling prices of c. €200k for new build a-rated 3 bed semis in Co. Wexford or even well below that.

Average 3 bed prices in three of the four council areas in Dublin in 2011 were under €300k and I think c. €350k in South Dublin.

Gradius

Productivity and creativity are the bread and butter of every economy. They are the golden eggs.

The commodification of housing has been the equivalent of slaying the golden goose.

It has significantly eroded birth rates, family creation, creativity, mobility, productivity, and even facility. Some of these factors will only become more obvious over time, but it's baked in at this point.

Who will be buying your 500k+ investments/homes in 20 years? It won't be the majority of people, those who have been bled dry through rent and mortgages. Nor will their children be propping up your pension investments, because a lot of those theoretical children won't exist.

Disaster looms, no matter how you cut it. Anyone thinking this kind of economic Titanic will keep sailing must surely realise their predictions are based on lots of "despite" rather than "because".

The country is a bloody joke.

PropQueries

janandbren wrote: »

Thoughts on story broke this morning by Killian Woods on the business post? The state itself investing in the cuckoo funds? Though I'm completely shocked by it myself, I feel this board where I have to admit is my first time posting, has replaced all my reading of social media so I appreciate all of the wide range of opinions from you all! Came straight on here to see the chat but maybe I'm too early?

In a follow up to that SBP article today, the Irish Times is reporting:

“Meanwhile, the Department of Finance has defended investments made by the Irish Strategic Investment Fund (ISIF) in a company which purchased significant numbers of homes in Co Kildare.

The ISIF put €60 million into a firm called Urbeo in 2018, which, according to a report in the Business Post went on to purchase more than 200 units in two housing estates in Maynooth.”

Quite amazing, the state basically gives them the money or at least helps the fund to outbid local FTBs and then would more likely than not (based on their passed behaviour) would probably be renting those same houses back at probably market breaking rents IMO

Link to Irish Times here: https://www.irishtimes.com/news/ireland/irish-news/large-percentage-of-new-builds-may-be-reserved-for-first-time-buyers-under-new-plan-1.4566560

Gradius

Murph85 wrote: »

Good post above, this is one serious mess/ disgrace. The government are going.g to wish for the good old days of covid again. This will drag on for years and even with the best will and a lot of time, it would be a challenge to change. Gene Kerrigan has a good article in the irish indepent today. Refers to ffg as profits before people alliance, bang on ! He also says what I posted a few pages back, the housing crisis isn't causing them sleepless nights, it's the political ramifications that are...

Ffg pandering to the high voting elderly , lol. It's the hu dress of thousands of young, that will never vote for you again, that they should have been more concerned about..

Quite true about the sleepless nights. Politicians by their very nature have always been populist. However, now they have essentially become crack-addled social media "influencers", ie bending over backwards to appease a ludicrously insignificant cohort of people that are barely connected to reality, while completely throwing all else to the wind.

Also, to add to my previous point on the expensive, negative consequences of commodifying housing there is the very real impact of mental health.

Increased stress and worry must surely be dominated by housing in this country. It can't be measured, but it's there. Again, factors that subtract from productivity and creativity.

Trading bricks between one another ad infinitum, all in the hope of using those bricks to leech off the decreasing pool of people that are genuinely productive.

Egypt isn't the only country with great pyramids.

Graham

Mod Note

several off-topic posts deleted.

Please read the mod note in post 1 before posting again.

Gradius

<SNIP>

Mad_maxx

PropQueries wrote: »

Yes. Of course it should IMO. We're an extremely low population density island off an island off europe. I don't see how any standard 3-bed anywhere in Ireland costs any more than c. €150k IMO

New Zealand is far less densely populated than Ireland and far more isolated geographically yet house prices on average are a good 40% more expensive than in Ireland despite wages being higher in Ireland

view the world as it is rather than as you would wish it to be

PropQueries

Mad_maxx wrote: »

New Zealand is far less densely populated than Ireland and far more isolated geographically yet house prices on average are a good 40% more expensive than in Ireland despite wages being higher in Ireland

view the world as it is rather than as you would wish it to be

That’s what I’m doing. Seeing the world as it really is. I know nothing about New Zealand but I also don’t believe for a moment that that over-supply in Ireland from the boom years has been soaked up IMO

Marius34

John1648 wrote: »

Dear Board.ie contributors, here comes a kind request to you to critique such a small investment idea:

I am a cash buyer, looking at buying a property in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

The calculation is like this: 1300 EUR monthly rent, purchase price - 180 000 EUR.

I am currently looking at an apartment in Citywest area (Carrigmore Crescent), 2 mins from LUAS, next to the shopping centre, 1-bedroom, 42 sqm, in pretty good shape, furnished.

Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?
I currently reside abroad, so would not pay the PRSI.

My calculations would go like this:

Apartment Rented for 1300 a month.

Rental Income per year 15600.

Expenses:

Mgmt Charges 1050
Letting and property management fees: 1550
Tax advisory costs: 250

Total allowed deductible expenses 2850.
Local property tax: 250
Income: 12750

Income Tax at 20pc (minus the allowance of 1650) is 900; PRSI 0 pc; , USC 0.5 pc is 80

Overall Profit: 15600-1050-250-1550-250-900-80 is 11770.

Does it make sense?

Many thanks!

John

I think Dublin residential property market is a good place to invest savings, if you don't have your own business. Although it's not for everyone, and problem with tenants might be a major issue.
But I think you calculation is not right for final profits. If Rental is not main source of income, I guess you would NOT get allowance of 1,650.
Your "Overall Profit" still likely to be taxed in country of residence as an Income, Profit or Dividend rate.

Timing belt

Browney7 wrote: »

This isn't new news. Information has been there if people were bothered to look

https://www.boards.ie/vbulletin/showthread.php?p=115421513

https://www.boards.ie/vbulletin/showthread.php?p=117138002

Great stuff from the business post calling out this economic illiteracy

I wouldn’t be surprised if the SBP article came about after a journalist say your posts on here... fair pay for highlighting it 5 days ago

Bass Reeves

PropQueries wrote: »

That’s what I’m doing. Seeing the world as it really is. I know nothing about New Zealand but I also don’t believe for a moment that that over-supply in Ireland from the boom years has been soaked up IMO

And where is it so has someone hidden it under there jumper

PropQueries

Bass Reeves wrote: »

And where is it so has someone hidden it under there jumper

It’s all “hidden” in plain site in most official data.

Thankfully the SBP published an article about all those empty apartments in Dublin back in Feb 2020 (pre-covid) or many would be blaming all those empty apartments in Dublin on Covid IMO

It’s also like people blaming the current high cost of building on “materials” or the “new building regulations” and then Oral Hegarty today tweets about new build a-rated 3 bed houses in Co. Wexford asking c. €200k

Marius34

PropQueries wrote: »

It’s all “hidden” in plain site in most official data.

Thankfully the SBP published an article about all those empty apartments in Dublin back in Feb 2020 (pre-covid) or many would be blaming all those empty apartments in Dublin on Covid IMO

It’s also like people blaming the current high cost of building on “materials” or the “new building regulations” and then Oral Hegarty today tweets about new build a-rated 3 bed houses in Co. Wexford asking c. €200k

And when those apartments were fully completed? Were they empty for over a year?

Mad_maxx

PropQueries wrote: »

That’s what I’m doing. Seeing the world as it really is. I know nothing about New Zealand but I also don’t believe for a moment that that over-supply in Ireland from the boom years has been soaked up IMO

Population increase of half a million since 2011 and nearly all to the main cities

Sarn

Mad_maxx wrote: »

Population increase of half a million since 2011 and nearly all to the main cities

I was just about to post similar. Population in Ireland has increased by about 700k since 2006.

Villa05

Mad_maxx wrote:

New Zealand is far less densely populated than Ireland and far more isolated geographically yet house prices on average are a good 40% more expensive than in Ireland despite wages being higher in Ireland

Mad_maxx wrote:

view the world as it is rather than as you would wish it to be

Unfortunately we are not allowed debate your claim
Balanced posts containing links to people's experience in several countries have been deleded

PropQueries

Mad_maxx wrote: »

Population increase of half a million since 2011 and nearly all to the main cities

Well, all I know is that of the c. 180k population increase between 2011 and 2016, c.100k was due to an increase in people living longer i.e. the over 65s and not in need of housing.

We also had significant negative net inward migration over that period and still had a ‘housing shortage’ despite the significant oversupply from the boom years. We still haven’t breached 5 million today as far as I know.

I’ll go with my gut instinct and the official data and guesstimate there is no housing shortage and given that the funds purchased c. €200 billion in distressed banking assets between 2012 and 2016, that they will begin offloading in bulk this year and we’ll begin to see how much of that vacant property they really do own.

I think anyone inside and outside Dublin can see, as I have, how much vacant property there really is at the moment IMO

My thinking would also be that that significant backlog in probate sales (and it’s significant IMO) will begin to re-enter the market in the next few months and resolve all housing problems IMO.

Timing belt

PropQueries wrote: »

Well, all I know is that of the c. 180k population increase between 2011 and 2016, c.100k was due to an increase in people living longer i.e. the over 65s and not in need of housing.

We also had significant negative net inward migration over that period and still had a ‘housing shortage’ despite the significant oversupply from the boom years. We still haven’t breached 5 million today as far as I know.

I’ll go with my gut instinct and the official data and guesstimate there is no housing shortage and given that the funds purchased c. €200 billion in distressed banking assets between 2012 and 2016, that they will begin offloading in bulk this year and we’ll begin to see how much of that vacant property they really do own.

I think anyone inside and outside Dublin can see, as I have, how much vacant property there really is at the moment IMO

My thinking would also be that that significant backlog in probate sales (and it’s significant IMO) will begin to re-enter the market in the next few months and resolve all housing problems IMO.

On one hand you have over 65 living longer and the other you have them dying and entering probate...logic sounds like a square circle unless I am missing something

L1011

PropQueries wrote: »

My thinking would also be that that significant backlog in probate sales (and it’s significant IMO) will begin to re-enter the market in the next few months and resolve all housing problems IMO.

What significant backlog in probate sales?