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

Timmyr

https://www.boards.ie/discussion/comment/117745396#Comment_117745396

Yea its good for us, but just shows how messed up it is here

Cookie_Monster

https://www.boards.ie/discussion/comment/117702183#Comment_117702183

25% increase in year to June in NZ. Our build isn't even finished and its valued 20% higher last week for the bank than when we started, lol.

agoodpunt

https://www.boards.ie/discussion/comment/117745101#Comment_117745101

if you dont get paid do you still go to work? we always have some crazy comparsions to rental market am sure this has been made before.

Amadan Dubh

https://www.boards.ie/discussion/comment/117743866#Comment_117743866

So he sold it for more than the outstanding balance on the mortgage, which is not a loss at all. In fact, it is a gain, with the gain being the difference between the balance outstanding on the mortgage and what he sold it for. His personal issues are undesirable of course but irrelevant to the fact he made a financial gain, not a loss and to paint it as a loss is incorrect.

Jmc25

https://www.boards.ie/discussion/comment/117745927#Comment_117745927

The difficulties in evicting non paying tenants is a real problem and something needs to be done there. To be fair not many people would disagree with that and there have been some horror stories.

That issue won't be solved with a tax cut.

JimmyVik

https://www.boards.ie/discussion/comment/117746311#Comment_117746311

Oh maybe he should have spoken to you. :)

If only you had bought it from him he wouldnt have had to have all those sleepless nights and his wife crying herself to sleep.

And you could have made that phantom profit.

There are loads of landlords around who cant make it work. If I were you, with your superior skills at the landlord game I would buy them all up cheap and retire to the Seychelles in a few years.

Jmc25

https://www.boards.ie/discussion/comment/117744191#Comment_117744191

Driving them out by maintaining pretty much the same rate of tax as when they entered it?

There's loads of issues for small landlords - not least of all the difficulties in evicting non paying tenants. They're well documented on this forum.

Small landlords are leaving the market at a time of record high rents. In some cases the rents are double what they were 10 years ago. If this isn't enough of a financial incentive to keep them in the market then a tax cut won't be either.

The tax cut will disproportionately benefit those landlords who had no intention of leaving the market anyway.

JimmyVik

https://www.boards.ie/discussion/comment/117747035#Comment_117747035

If it was enough it might encourage other to enter the business.

I doubt it though. Damage has been done.

yagan

Haven't been able to keep up with this thread recently as I'd been busy helping a returning relative find a house in the south west, but made some interesting observations on the way. The budget was above the average price and they had no interest in new builds in estates so it was nearly all established homes with a good sized garden and a BER of no less than C.

Initially when general covid restrictions allowed viewings there was a rush on viewings, time slots were extremely tight, but now they seem to have slackened off entirely, zero problems getting a viewing.

One estate agent through which we viewed a few houses even said last week that in that segment interest has almost dried up. They did have a few international buyer buy covid bolthole sight unseen but they tended to be really expensive coastal properties.

I did ring one developer who was building an exclusive low density development aimed at around the 600K mark and two months ago they only had one unbooked house in the current phase. But when I rang last week it was back to five available and "going fast" in their words, although fast in reverse in reality.

I won't be surprised if we see in that price segment a good second and third quarter sales splurge before a fourth quarter lull.

Mad_maxx

https://www.boards.ie/discussion/comment/117745880#Comment_117745880

Is the NZ bubble as crazy as the one we had up to 2007 ?

The Student

https://www.boards.ie/discussion/comment/117747035#Comment_117747035

Reducing tax may go some way to stem the exit of small landlords. It is highly unlikely that the pro tenant legislation is going to change.

Rental income may have increased but the rpz, the difficulty in evictions and the extended notification periods for termination of leases have all favoured tenants at the detriment of landlords.

Anything anti tenant from a political perspective is political suicide and unless landlords get "something" they will continue to leave.

cubatahavana

Three apartment blocks in cabinteely sold for social/adorable housing. Two blocks in beechpark and one in Johnstown road (with another being built in front of it that probably will end up the same)

https://cabinteelylife.com/2021/08/14/entire-apartment-development-at-beechpark-cabinteely-purchased-by-social-and-affordable-housing-fund/?fbclid=IwAR02q5TCZPGYeMUjIqqu7MFmdb6VIyhiEDf_jhEQJV5u2JaG7Dr7V7FWA8w

Eclectic Econometrics

"€500m for developers to coax them back to building"

"Half-a-billion euro is to be provided directly to developers by Government in a bid to get them to overcome concerns about making housing schemes a commercial success.

The move, never before attempted in the history of the State, will subvent builders in creating homes in both cities and towns across Ireland.

It comes as property experts warn that the large-scale return of workers to offices from next month will trigger a deeper crisis in the availability of housing, particularly in the rental sector."

Go to the Independent .IE for the story.

I still can't post links again on this new s(h)ite.

TheSheriff

https://www.boards.ie/discussion/comment/117756547#Comment_117756547

Just heard this on the news.... Speechless. I think those waiting the last few years for a correction will be waiting many more...

Mr Hindley

https://www.boards.ie/discussion/comment/117755728#Comment_117755728

Ah, FFS. I drive past these every week and had been telling myself 'well, at least that's some more properties coming onto the market soon, that should help'. I try to be calm and rational and see all sides of the argument, but this does just make you wonder why those of us expecting to work hard and pay for our own homes bother.

cubatahavana

https://www.boards.ie/discussion/comment/117757015#Comment_117757015

I agree with social policies to help people that cannot purchase a home, but I think as well that people that are looking to buy apartments as a first step into the ladder, are fecked with these policies. Have a friend earning 100k that cannot afford to buy an apartment on her own in a place near her work. If a sole purchaser on 100k cannot afford to buy an apartment in a good-ish area, but over 200 apartments are in the same-ish area going to social, there is something wrong.

cnocbui

With developers aware that 500 million is avaiable, it will be like the childrens hospital and every other thing the government does with extreme incompetence; so I guess that will mean 500 3 bedroom houses will be built, and then later there can be an enquiry with incredibly restrictive terms of reference to ensure no individuals are named or identified as being to blame, and millions more will be poured into the pockets of barristers and ex senior civil servants and retired judges to carry out this show enquiry.

https://www.boards.ie/discussion/comment/117757237#Comment_117757237

How can she not afford an apartment?

I earn less then that and I wouldn't have a problem buying an apartment in Dublin.

TheSheriff

https://www.boards.ie/discussion/comment/117757237#Comment_117757237

What area is this? Not aware of any areas where an apartment cannot be got for 350k??

cubatahavana

https://www.boards.ie/discussion/comment/117757836#Comment_117757836

Of course, when you’re looking for a property, you set some goals. There are apartments for 350 in the area, but they’re either small, not modern, or built a long time ago with worse building standards. Most of those prices as well are asking prices, not what property is being sold at. I’m not here to comment on the standards that she wants for her apartment, but to say that over 200 apartments built to a very high standards in cabinteely have been removed from the market for first time buyers swiftly

jmlad2020

https://www.boards.ie/discussion/comment/117757400#Comment_117757400

She probably spends all her money renting a city centre pad, buys throwaway clothes and makeup maybe?

If I was on that sort of money I can guarantee I'd be saving at least 70% a year. But then again I'm just a Bloke🥴

AlmightyCushion

https://www.boards.ie/discussion/comment/117758657#Comment_117758657

100k is roughly 60k after tax and that's assuming you aren't contributing to a pension which you really should be especially on that income. So, that's 18k a year, 1500 a month. If you share a place that could be doable enough but not if you rent on your own.

cubatahavana

https://www.boards.ie/discussion/comment/117758657#Comment_117758657

Not going to enter in arguments about what she spends as and what she doesn’t because that is only her business. Your approach looks terribly sexist, though.

Again, the main issue is that 200+ apartments in a prime location have been wiped from the market for benefit of the funds

Amadan Dubh

https://www.boards.ie/discussion/comment/117756547#Comment_117756547

As an aside from the main point, the Indo pushing a myth that a large scale return to offices is happening next month, I wonder why? We can barely sit inside a cafe and a bar, yet they will be getting rid of mask mandates and social distancing in the next 3 weeks? It seems that January 2022 at the earliest is when large scale return to offices will happen, if it ever does. Irish Times have also changed the headline on their article from Saturday to put out a narrative that somehow offices are returning en masse in 3-7 weeks.

https://www.irishtimes.com/opinion/cliff-taylor-property-crunch-coming-in-the-autumn-1.4646434

It's ludicrous not just from a covid point of view but also the government is risking the population physically confronting them on the streets with protests of the housing situation keeps getting worse. They will not be abandoning the message that workers should continue to wfh if possible if it would risk a surge in demand for rentals.

Edit: actually this morning there was an indication on the easing of restrictions published on the IT. It says that the government will only look to publish the revised roadmap at the end of August which means it won't come into effect until a few weeks later. This quote is why a mass return to the office is unlikely, maybe a very staggered, slow return through the autumn and winter in a best case scenario would happen.

https://www.irishtimes.com/news/politics/covid-19-relaxation-of-social-distance-rules-under-consideration-1.4647842?mode=amp

Officials also considered setting a physical distance of one metre in workplaces, indoor public spaces and healthcare settings until spring 2022. Masks for shops and public transport and in healthcare settings are set to be retained until at least next spring.

yagan

Just saw the State Street announcement about not returning to their midtown Manhattan premises which they'll now sublet.

The bottom line is that the city cluster model as we knew it is going into permanent contraction. This will affect cities like Dublin with stock built specifically targeting the multinational financials who may now only need a full time presence workforce a fraction of its former operation.

For the financials WFH is a huge cost saver.

Amadan Dubh

Yeah, there's definitely a "premium" to be paid for having workers in an office versus at home, sometimes playing out as "workers who WFH likely to earn less". Doesn't hold much water to argue WFH commands a lower salary, as the employee going to the office is the one commanding a premium on the salary to cover his cost of commutting, maybe higher living cost for being in the big city, insurance, security, cleaning, electricity in the building, teas and coffees even or else rent to be paid to cover it all. It's hard to predict how the chips will fall but I think hybrid for those that want it is going to be the closest to a five day in office week that employees will get to. For many, as we can see from the surveys, they would prefer even just 1 or 2 days in the office maximum per week, if not full time wfh.

I've noticed how the estate agents publish these "state of the commercial market" reports and to me the past year or so it is very much about trying to polish a turd; with phrases such as "better than expected" and "outlook is good with enquiries up". It really shows that the narrative put out in the media and by those involved in the industry tells it as they want it to be rather than how it actually is. I can absolutely see how "no one saw the crash coming". It's a case of head in the sand and hoping the warning signs just disappear essentially rather than trying to adapt before the crash.

PommieBast

https://www.boards.ie/discussion/comment/117764245#Comment_117764245

General impression I get is that people would like to be back in the office, but they do not want to go back to spending 5-10 hours a week commuting. Based on what I was seeing just before I left, commuting into Dublin is going to be even worse post-Covid than it was pre-Covid, so any premium for having people onsite 5 days a week is going to rise.

Dublin's commercial space was a glut even before Covid, in part due to supposed preparation for a Brexit relocation bonanza that never really materialised. And it is not just estate agents who are wishfully thinking of a return to the old normal.

Marius34

Some old news, from May 2021. Only now see it myself

https://www.gov.ie/en/press-release/0b75f-minister-donohoe-announces-stamp-duty-measure-for-bulk-purchasers-for-homes/

"The Minister for Finance, Paschal Donohoe TD, will bring a Financial Resolution to the Dáil tomorrow (Wednesday) evening, which will impose a stamp duty charge of 10% on the multiple purchase of 10 or more residential houses"

If I get it right, Funds/Reits are basically out from the "House" market, and only viable option is Apartments. I remember I saw someone posting that Funds buying developments of "Houses", I'm curious if it happened any case after the announcement of Stamp Duty.

fliball123

https://www.boards.ie/discussion/comment/117763885#Comment_117763885

While there may be some WFH there will be for the next 5 years or so a hybrid approach most companies will keep an office/HQ also the major cities around the globe have benefited with vastly more money spent on infrastructure and housing as apposed to other cities in the same country. Case in Point Dublin vs Leitrim or New York Vs Alabama or London vs Newcastle. So while you may see some clear out these big city hubs will remain a place people want to live. It may be the chicken or egg came first story but companies setting up in say Dublin or London must of set up there for a reason first off, same goes people living in these areas there must of been some advantage or attraction to move there. It will be interesting to see if the WFH model takes off and becomes the new norm.

JimmyVik

https://www.boards.ie/discussion/comment/117765870#Comment_117765870

Didnt stop DCC buying up 3 entire apartment blocks in Cherrywood the other day.

AlmightyCushion

https://www.boards.ie/discussion/comment/117766003#Comment_117766003

The key word is houses. It doesn't apply to apartments which is just plain stupid. There is also an exemption if the properties are going to be let to the council which is also very stupid.

yagan

https://www.boards.ie/discussion/comment/117765890#Comment_117765890

Perinternet having city offices to bring the workforce together made sense. But early adaptors have being subcontracting for Irish companies while living abroad for years now. Management culture can stagnate until an external shock forces change, and the pandemic has revealed massive cost savings that's shaking up the entire corporate landscape.

The internet has become mainstreet for shopping and downtown for business.

From the few team gigs I've done that required 9-5 presenteeism my entire workload could be completed in a few hours and the rest of the time was merely looking busy.

Marius34

https://www.boards.ie/discussion/comment/117766003#Comment_117766003

As comment above. It's Apartments in Cherrywood, not Houses.

cnocbui

A lot of London offices look like they may never be re-occupied again as they don't meet the new energy rules.

https://www.cnbc.com/2021/08/16/10percent-london-offices-at-risk-of-becoming-obsolete-under-new-energy-rules.html

AdamD

https://www.boards.ie/discussion/comment/117765870#Comment_117765870

So anyone interested in buying an apartment continues to get screwed

Marius34

https://www.boards.ie/discussion/comment/117766572#Comment_117766572

It seems so at least for the new builds, not sure about second hand apartments.

JimmyVik

https://www.boards.ie/discussion/comment/117766572#Comment_117766572

Exactly.

Funneling all he people who wopuld have bought apartments into the housing market to cause more competition there too.

Amadan Dubh

https://www.irishtimes.com/business/economy/developer-plans-to-sell-122-baldoyle-social-housing-units-for-46-4m-1.4649498

The Shoreline Partnership has put a price tag of €46.4 million on 122 apartments it is proposing to sell to Fingal County Council for social housing.

That is according to planning documents lodged with Shoreline’s Strategic Housing Development (SHD) for the €464 million, 1,221 unit apartment scheme it is planning for Baldoyle in north Dublin.

The developers have put a €554,842 price tag on the three-bed apartments and a €427,887 cost on the two-bed apartments it is planning to sell to the council.

The cost of one-bed apartments to the council is to be €282,323. 

The Shoreline Partnership is owned by Avestus, which has directors with some dubious NAMA dealings, as highlighted by Mick Wallace under privilege in 2018; but I'm sure this Baldoyle apartment deal represents a good deal for the State and in no way did the institutional investors have any involvement in shaping the policies which have lead to the State purchasing properties from these same institutional investors.

https://www.irishexaminer.com/news/arid-30887198.html

Speaking under privilege, Mr Wallace said the company Avestus took over Quinlan Private in 2010.

"The three principal directors, Olan Cremin, Thomas Dowd and Peter Donnelly, had borrowed heavily during the boom, mainly from Anglo Irish Bank, and owed €489m when the crash came,” he said.

The €489m went across to NAMA and NAMA assembled a portfolio with €352m of this debt, naming it Project Nantes. The three boys went off to America to find someone to put up the money and found a company called Clairvue. They then set up a shell company in Luxembourg called Clairvue Nantes and installed another director of Avestus, Mark Donnelly, as a director of the Luxembourg company. He had been a director of Avestus since 2010 and became a director of Clairvue in 2012,” he said.

“The company bought Project Nantes for €26.6m, with a discount bringing the price to under 10% of the original value. This sale is in breach of the NAMA Act for multiple reasons. It was off-market, at a knock-down price and, worst of all, the purchaser was connected to the debtor which is illegal under section 172 of the NAMA Act,” he concluded.

Marius34

Sentiments changing:

"70% of Irish consumers expect house prices to rise over the next three years, according to a new survey by KBC Bank Ireland. Just 12% said they expect to see prices drop, while 5% see prices being broadly flat"

I'm afraid this may create a Bubble in coming years.

https://www.rte.ie/news/business/2021/0818/1241558-most-consumers-expect-house-prices-to-continue-rising/

Amadan Dubh

The bubble is already here and this is exactly the type of survey which backs up my current position that feelings have trumped data and fundamentals among the property market participants. Buyers want to buy now to avoid missing out on higher prices and sellers think they could hold off another couple years, especially if it seems like prices will keep rising. Like inflation, price rises are then self-fulfilling. It would appear that, right now, "no one can see it coming" (it being prices falling).

tigger123

https://www.boards.ie/discussion/comment/117777474#Comment_117777474

I genuinely don't understand the line of thinking that says we're in a bubble. How are we in a bubble? Or how is a crash on the horizon?

Demand for housing is far outstripping the supply side, and has done for years.

What turn of events would lead to a crash in prices?

cnocbui

https://www.boards.ie/discussion/comment/117777602#Comment_117777602

3 miracles in a row.

Some people believe in miracles.

PommieBast

https://www.boards.ie/discussion/comment/117777602#Comment_117777602

If demand actually followed supply like it does in a properly functioning market, I would expect lower prices.

cnocbui

https://www.boards.ie/discussion/comment/117777684#Comment_117777684

You have that backwards; supply needs to follow demand.

dor843088

Prices are nowhere near bubble territory.

TheSheriff

https://www.boards.ie/discussion/comment/117777474#Comment_117777474

This really is not true.

You've convinced yourself it is as a potential future buyer.

tigger123

https://www.boards.ie/discussion/comment/117777684#Comment_117777684

Completely agree with you, but we haven't had a properly function housing market for years at this stage, and won't have one for a long time either.

Marius34

https://www.boards.ie/discussion/comment/117778815#Comment_117778815

Logic by some convinced crashers in here.

If people think the property prices will fall, like in 2020. That means Crash is coming.

If people think opposite like in the recent article. That means Crash is coming.

enricoh

https://www.boards.ie/discussion/comment/117777602#Comment_117777602

Government are spending money like water at the minute. They are the main player in the housing market according to the taoiseach.

They are more or less the rental market these days. And if you've been outbid on a house there's a fair chance it was government money that outbid you. With changes to corporation tax coming will the money keep rolling in? Ireland has very high debt pre covid any change of sentiment and our interest bill won't be long rising.

tigger123

https://www.boards.ie/discussion/comment/117779707#Comment_117779707

Any house I bid on in recent years (and I bid on a lot), while I may have been bidding against the Government, I was also bidding against a lot of FTBs, just like me. So even removing the Government from the market, there is still very strong demand for housing. And its a demand that far outstrips supply. While it is a player, I don't believe the Government is propping up the housing market.