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

BlueSkyDreams

https://www.boards.ie/discussion/comment/120656910#Comment_120656910

Yes, good points.

The eviction process is the number 1 issue to sort out.

The govt are very liberal and i would say centre left & dont seem to have an appetite to protect landlords here.

There is also next to zero chance of SF tightening landlord protections on this front, if they do get in.

I still think that if push comes to shove, most STL LLs still wont rent out their property for LTR under the current conditions, even with a more cutting VPT.

They will move someone from family in "officially", they will make the home uninhabitable and claim it needs work done, they will just pay the VPT, or they may even sell it.

If they do sell it, it is still unlikley to come onto the rental market.

So the core renter group are still left with little pickings, once the STL homes in their town have gone through the above filtrations.

I think the real answer lies in incentives, not punishment.

Sure, hit people with a high VPT, i agree with you.

But help them be a landlord at the same time. Make them want to choose LTR, rather than stacking the cards so that they do everything in their power to avoid it.

That old saying still rings true, where there's a will, there's a way.

LLs will find a way to do what they want to do with their own property.

So make LTR attractive to them.

On another note, I hope SF dont get in. I really dont see how they will increase housing output and am yet to see any valid counter argument.

PommieBast

https://www.boards.ie/discussion/comment/120655378#Comment_120655378

Devil is in the detail, though I expect enough sob stories would be rolled out that it ends up being ineffective.

wassie

https://www.boards.ie/discussion/comment/120656930#Comment_120656930

Youy arent wrong when you say public acceptance is the issue.

Ultimately laws need to changed by politicians who are voted in by the public, namely:

• Residential Tenancies Act 2004 affords the protection of non-paying tenants
• Family Home Protection Act 1976 affords the protection on non-paying borrowers.

fliball123

https://www.boards.ie/discussion/comment/120655161#Comment_120655161

I sold up a 2nd property at the tail end of last year I have the cash waiting to buy so I waiting for any signs that the market will start going back up and and I have planning for an extension which I will be putting on the long finger as I don't really need it , its more vanity and necessity as I believe I will be able to get the job done at a lower price point in say 12/18 months.

Sierra Oscar

https://www.boards.ie/discussion/comment/120657243#Comment_120657243

Surely inflation is significantly eating into your cash savings month on month? Will this not undermine any savings made by a hypothetical drop in house prices in a year or more? Inflation is running at 8% at the moment and is forecast to run at 6% next year.

This is arguably the worst time to hold cash in well over a decade.

Meanwhile, mortgage holders who were lucky enough to lock in at low interest rates are now seeing their mortgages being eroded significantly by the impacts of inflation - coupled with wage increases.

fliball123

https://www.boards.ie/discussion/comment/120657346#Comment_120657346

Well its all about how you handle your cash and in a recession cash is king, its a gamble my reckoning is that we are going to hit a recession by the end of the year which will last maybe 12/18 months and if the global economy continues in its current vain as in UK and Germany are in recession, we may well see the US hit one as well then interest rates globally will have to be lowered as this will be the only mechanism to allow liquidity back into the system, by that time I am expecting property prices to drop at least another 5% if not 10% so I will have cash ready to go and I will buy another 2 properties using a partial mortgage for one of them at a much lower interest rate point, by then I am hoping that the sh1t show that is the rental regulations will be sorted and with the demand for rentals.

RichardAnd

https://www.boards.ie/discussion/comment/120657404#Comment_120657404

Dropping rates to near 0 (and less in some cases) was the "solution" to the 2008 financial crisis. Many argue, and I'm inclined to agree, that the fundamental causes of that collapse were never fully resolved. Rather, the states of the west printed money in the trillions to inflate economies back to growth. Indeed, how many of the ills of the West today can be traced to chasing the infinite growth genie? Inflation, mass immigration, declining services, soaring housing costs, etc....

I don't exactly know what is going to happen, but as things stand, a deflationary recession would not necessarily be a bad thing. The state was less dangerous when it was broke!

fliball123

https://www.boards.ie/discussion/comment/120658023#Comment_120658023

Not saying they will drop to zero but at some point in the future they will drop in order to fight the coming recession so I think we are in agreement as the global central banks seem to have no other mechanism to control inflation and money flow and money tapering on a global scale.

RichardAnd

https://www.boards.ie/discussion/comment/120658178#Comment_120658178

I think that that's what worked before, so it's not unreasonable that it will be tried once again. However, we really don't know what will happen.

Murph3000

https://www.boards.ie/discussion/comment/120657346#Comment_120657346

If food, energy, services etc. inflation is at 8 percent.....how does that effect savings being used to purchase a house, assuming house prices are dropping. You get better bang for your buck in this scenario, regardless of "inflation".

I understand what you are trying to say but not sure if you have thought true.

Its also worth noting that no risk rates on deposits are rising all the time. Its the worst time to hold debt in the last decade and could be getting worse. Just something to think about.

Murph3000

https://www.boards.ie/discussion/comment/120655459#Comment_120655459

I know a person with multiple houses.

2 are being used for airbnb, barely ever used.

One has no interest by airbnbers so has been relisted. It just sits there, has been going up in value for last decade, so why not.

People dont care about the Countries housing problems, they look after themselves. Its not something I would do as I have a lot of honor but I can see why.

Timing belt

https://www.boards.ie/discussion/comment/120659139#Comment_120659139

You do realise that debt erodes during an inflationary period…just something to think about.

Murph3000

https://www.boards.ie/discussion/comment/120659227#Comment_120659227

Yes, very good.

The value of money erodes over time. There has been no period in history where the value of money has gone up.

Everything goes up over time...property, stocks, oil. But if you are buying something on credit, rates must be considered.

BlueSkyDreams

https://www.boards.ie/discussion/comment/120659151#Comment_120659151

Some view a house an asset.

Some view a house as a home.

herbalplants

Shadow banking, Ireland has plenty of it.

https://www.reuters.com/markets/europe/ecb-warns-hit-top-european-banks-if-funds-run-into-trouble-2023-05-30/

Sierra Oscar

https://www.boards.ie/discussion/comment/120659139#Comment_120659139

I'm not entirely sure you've thought it through, to be honest. Yes, inflation is running higher in certain areas - that's always the case and is why it's averaged out across an entire economy. Regardless, inflation is driving upwards pressure on wages which in turn will impact every single market - including the property market. It's probably why we haven't seen as large a fall in property prices than many on here predicted (we're well over a year on from the invasion of Ukraine by the way, the property market was supposed to have collapsed by now).

wassie

Credit availability is a major factor - We havent seen the full effect of ECB interest rates rises yet as Irish Banks have been extermely slow in passing on higher ECB interest rates to borrowers. That is changing now and this will have a dampening effect on prices.

Ozark707

https://www.boards.ie/discussion/comment/120659745#Comment_120659745

Is it changing though? I thought they had barely passed the rate hikes (apart from trackers etc)?

Dav010

Posters are consistently bleating on about owners opting for short let renting rather than long term tenancies, as if Airbnb is the root of all evil. The simple fact is that if the Government addressed the concerns of landlords rather than focusing on short lets, LLs wouldn’t be exiting the tenancy sector. It’s easy to blame the owners, but if owners suspect SF are going to make conditions even worse for Landlords, then it is hardly a surprise that more owners decide to terminate tenancies.

https://archive.ph/DwN0H

growleaves

https://www.boards.ie/discussion/comment/120659272#Comment_120659272

Home Sweet Asset

wassie

https://www.boards.ie/discussion/comment/120660309#Comment_120660309

You make a good point. Typically a short term let attracts a higher rate of return than a standard lease due to the risk associated with increased chances of vacancy periods (hence no income generation). But the problems associated with unfavourable tax treatment of SLLs and issue in evicting bad tenants, along with the shortage of holiday accomodation then that equation no longer holds true.

bureau2009

ECB says house prices in the euro zone may be heading to a "disorderly" decline as high mortgage rates make purchasing unaffordable for households and unattractive for investors.

Villa05

Our intellectual property tax scam is getting alot of attention nationally and internationally lately. Expect that to increase if we are entering a global slowdown recession plus elections in the most affected country.

Spend the excess on infrastructure and housing to increase our competitiveness rather than spending that makes these far more expensive than they need to be

https://twitter.com/Brad_Setser/status/1661045625721421825?t=iqJERGS7pizyMJGl37nHVg&s=09

https://thecurrency.news/articles/119043/irelands-gift-to-salesforce-a-1-2bn-taxable-loss-2/

hometruths

https://www.boards.ie/discussion/comment/120660965#Comment_120660965

They're worried that "regions with a strong presence of institutional investors may, therefore, be more vulnerable as investor demand falls and the cycle turns."

Institutional investments made via real estate investment funds may amplify the RRE cycle, which raises the importance of developing policies to reduce structural vulnerabilities in such funds. Real estate investment funds play a prominent role among institutional investors. They are subject to a structural liquidity mismatch when they offer daily redemptions to their investors while holding illiquid real estate assets. This makes them particularly vulnerable to the effects of large-scale investor redemptions, which could lead to reduced demand or forced asset sales by funds. Where this results in further real estate price corrections and subsequent additional redemptions, adverse feedback loops can develop, amplifying the initial RRE market shock and its implications for the financial resilience of banks, households and exposed firms.

That doesn't sound like a soft landing.

By euro area standards we have a very strong presence of institutional investment in our residential property market.

https://www.ecb.europa.eu/pub/financial-stability/fsr/focus/2023/html/ecb.fsrbox202305_02~6a5f8ca12b.en.html

AdamD

https://www.boards.ie/discussion/comment/120661027#Comment_120661027

Its been getting that attention for a decade, genuinely.

DownByTheGarden

https://www.boards.ie/discussion/comment/120656767#Comment_120656767

If they simply addressed that side of the equation the whole problem would go away. Nobody wants to be letting their property on AirBnb over renting it long term. The problem is that renting long term is so risky that people just cant do it for fear of being ruined.

Allow a landlord to get their property back with no trouble and you have solved the supply problem. Or at least you would have before som many just decided to sell up because they thouight the problem would never be sold. Im in the latter camp.

DownByTheGarden

Listen to O'Broin here multiple times showing how thick he is. Yet he doubles down on it and says the other person is factually incorrect.

Imagine someone as stupid as this running the show.

I dont know what worse, that he is a minister in waiting or that he really thinks he is correct here.

Its at 10 mins. See if you can spot the clanger. Should be easy.

https://www.rte.ie/radio/radio1/clips/22256253/

hometruths

https://www.boards.ie/discussion/comment/120661393#Comment_120661393

I suspect it may alleviate the problem, but it won't make it disappear.

The only way to make the whole problem go away is to ensure that the financial returns from Airbnb are lower than the returns from long term letting.

Bass Reeves

https://www.boards.ie/discussion/comment/120656606#Comment_120656606

Vacancy tax is virtually impossible to implement where a LL has only a single rental. Most STL's are only rental property by a LL. With some it's there only property in Ireland which they do not want to LTL.

As well the EU has shot down the present STL legislation the government planned

Bass Reeves

https://www.boards.ie/discussion/comment/120655348#Comment_120655348

Planning premissions are already of limited duration anyway. Bringing in legislation to limit them further will not really change anything. Most sitting on development land are sitting on zoned land with out planning.

However the really issue is are we building at present labour capacity or not. I do not know of any unemployed construction workers. That would indicate that either a change in construction techniques or a reduction in regulation. Not even sure if that will change output drastically