Are landlords selling up?/asking prices not met.

NotInventedHere

I am currently looking to trade up. I live in Clondalkin. and hope to stay there. Anyhoo I am viewing quite a number of properties and one thing I have noticed is the number of rental properties for sale. Also a number of properties in this area have been on sale for quite a while and are not achieving their asking price. This is not an isolated phenomonon(?). My friend who is looking for an apartment in the city centre recently had the highest bid on a number of properties, but they were withdrawn, again for not reaching the asking price. Has anybody else seen this? Is it becomining a trend?

hmmm

If this is really happening, then it would be an interesting parallel to areas of the UK over the past year. Sellers were unwilling to sell their properties because they "expected" the properties to eventually sell at what they considered to be an appropriate price, even while there were no buyers. Looking at the statistics, house prices were not falling, althought the reality was somewhat different. Eventually prices drop and the sellers adjust to the new reality.

Supercell

I'm wondering the same also, the lastest house price growth released today ( Pace of house price growth almost halved ) is very much slowed down on what has gone before, am wondering if the 100% mortgages are going to be the straw that brakes the camels back.

Two things are for sure...

1) Many people who rent will now be looking for properties
2) Interest rates will not stay at 2% indefinitely

I'm really wondering if I shouldn't hold of for anouther few years now as my income is rising faster than the current house price inflation and imho there is a sizeable chance that within the next 3-5 years interest rates will rise and the rental market could be in freefall.

Captain Trips

I have seen 2 beds in IFSC for 430 being pulled down to 410 and still no offers. Same goes with temple bar apts with several (e.g., Crow Lane) still on the market and not selling at the guide (350k).

It is worrying to underbid a property just for the hell of it and 2 weeks later noone has bid higher. The seller of course, won't sell and the estate agents want their cut obviously.

All in all, it's definitely slowed and the massive growth of the past years has stabilised a lot. No more 50k/year gains in value!

Probably a good thing and also with the 100% offers it will encourage more individuals to buy and less having to rent from landlords with 10+ apts. Overall it will help a more stable society and not a two-tier system like 10 years ago of owners vs. renters and no possibility to move up.

More craziness is the south quay/hanover quay area. It's basically Pearse Street and they want 365k without parking for a 1 bed ) +40k for parking. No market can sustain that and judging by the DAFT rental asking prices you can see landlords are getting desperate: advertising a 2 bed in hanover quay for €1800/month!!

the_syco

I live in Leixlip, Co. Kildare. The houses here are still being bought. And being built. Anther 500 left to build at least. They go pretty quickly. Basicly, you can get more for less out here. for 350,000 you can get a decent house, & a decent garden.

Me thinks people are in the phase of buying outside of Dublin. The last phase was buy near to Dublin, high rise flats, etc. Now, the people who lived in high density area's, flats, etc, are moving to lower density area's, IMO.

MorningStar

Longfield wrote:

I'm wondering the same also, the lastest house price growth released today ( Pace of house price growth almost halved ) is very much slowed down on what has gone before, am wondering if the 100% mortgages are going to be the straw that brakes the camels back.

Just don't trust news reports on reports. As I pointed out yesterday two different media reports on the same report gave opposing views. You really need to read the report yourself.
Your views on what will happen maybe right but what are you basing them on? If you are going to try and wait out the market you should get yourself really informed rather than trust the views of a reporter who read a whole report in an hour and then shoots out an article. The reporter may be an expert but he is not looking at how it will effect you.
I think everybody agrees that house prices will shoot up over the next 2 years due to the SSIAs . If I was buying soon I'd buy this year but that's me and I am not really close to your situation.
If what is being said about ex-rental is true I'd be surprised because I have not seen anysigns. Some property always is on the market at the wrong price and sometimes people project hopes. When you are looking at the market at a particular price range you tend to see many houses that are in the same situation so it can be misleading.
In saying that appartments in general don't increase in value as much as other property and they also tend to be the first thing to reduce in price when the market slows.
There are a good few new landlords Last 10 years) that don't know how to budget correctly who could be panicing but their aren't as many as people think from what I see. How many new landlords do you know? Generally people talk about the idea but don't follow through from my experience but I might be in the wrong circles

positron

the_syco wrote:

Me thinks people are in the phase of buying outside of Dublin.

That's exactly what I did last month, but here's some statistics:

http://www.rte.ie/business/2005/0803/houses.html

House prices in Dublin rose by 0.9% in June, compared with 0.3% outside the capital, bringing growth for the first six months t0 3.5% and 2.3% respectively. But prices in the commuter counties (Louth, Meath, Kildare and Wicklow) fell by 0.1% in the month, though they are still running 3% ahead in the first six months.

Well, to me its about more space, and a better commute (an hour in train compared to more than 90 mins driving), and the blissfully calm weekends!

MorningStar

positron wrote:

Well, to me its about more space, and a better commute (an hour in train compared to more than 90 mins driving), and the blissfully calm weekends!

You should look at a thread before posting up a link as that one was already posted.

I see why people move out but while you can get the train many can't and your house price represented that. Bear in mind though as some friends of mine discovered as the areas further out get busyy along the track you may not be able to get on the train. In fact you may be the reason somebody else can't further down the line. Your current bliss may not be sustainable and there are many people commuting for 4 hours a day and raising their children in cars

Bluehair

Are landlords selling up? Smart ones are.

It's all about yield and increasingly there's better money to be had elsewhere. A lot of amateur (read 1 or 2 property) landlords are also finding that it's far from being the easy money they had thought it was and are selling up to.

MorningStar

Bluehair wrote:

Are landlords selling up? Smart ones are.
.

Is their any actual evidence? To suggest that the smart one are is a little strange to me. It's very like saying smart shop owners sell up when retail sales go down. Being a landlord is a business, very few buisnesses sell up the minute there is a change in the market. Novice landlords are possibly that nieve but I don't think they are all like that and the landlords that own the majority of the rental property are certainly not novices. It's very hard to get actuall figures on landlords in ireland due to the terrible registration system and lack of enforcement but why everybody assumes all landlords just do it for property value increases is beyond me. THese type of people are really speculators and there really aren't that many of them as far as I can tell. What are people basing the view on? I have heard it so many times here yet not one person has ever provided any kind of facts. It sounds like wild speculation to me based on nothing more than articles in the media.

Bluehair

MorningStar wrote:

Is their any actual evidence? To suggest that the smart one are is a little strange to me. It's very like saying smart shop owners sell up when retail sales go down.

Hardly an acurate comparison but to entertain you it would be like shop owners selling up when their cost base can't sustain much lower prices in a market where there is serious concern at a potential drop in prices.

'Articles in the media' will always report well after the event and I don't hold much stead in reports from the likes of Perm TSB recently who have vested interests in the market.

Being a landlord is indeed a business and it's all about making a profit. For a long time now that profit has been derived from capital growth. Even the most eager commentators are talking up a 'soft landing' now and admiting that the years of double digit increases are well behind us.

Speculators are the market from what I can see. I'll admit this is purely anecdotal evidence but I never cease to be amazed at the number of amateur landlords I know many of whom are slowly beginning to realise that it's not really as simple as 'rent-mortgage=profit every month'.

There's an awful lot of things that have to go just right for property to continue any kind of upwards growth in this country looking forward and a whole lot of things any one of which could put a serious damper on the market.

I'm conservative I'll admit but while you can leverage debt to maxamise profit with property most people don't seem to realise that you are therefore exposed to potentially dreadful loses too.

I've just recently sold up (for a very healthy profit) and will be renting for the next few years while I make up my mind whether or not to emmigrate.

MorningStar

Bluehair wrote:

Being a landlord is indeed a business and it's all about making a profit. For a long time now that profit has been derived from capital growth. Even the most eager commentators are talking up a 'soft landing' now and admiting that the years of double digit increases are well behind us.

Speculators are the market from what I can see.

The landlords in this country are mostly pension companies renting office space. After that it's a bit hard to tell but you can determine it by thinking about what is rental property now and what was. Basically most old rental stays rental property as the expensive of converting/redecorating can devalue what tends to have an investment price. Most of the older landlords just add to their portfolio. THe increase in the rental market was primarily driven by these landlords who borrowed on their existing investements rather than people borrowing on their home. For every home borrowing landlord I would say there were 3 to 4 borrowing on existing rental property. It just makes sense that people used to the market reacted more quickly with more capital. It's hard to tell but logically and from my experience the small time investors are only about 10% at most of the rental market. THey just don't have the buying power or experience to take on the more seasoned investors who are on the slow burn profit. Some did sell one property and buy 2 or 3 in the next good rental area. Very few use capital gain as profit because you need to sell pay capital gains etc... A good investement is €350k with a monthly return of €1400. Not bad for a pension and the property over time will be a better return than most over a 10-20 year period.

It's all kind of anecdotal but how many old time landlords do you know? You might know 5 people who rent out property but that's small fry. I know many people who own 10 and more. They have a lot more effect on the market than the amount of small fry. How many people do you know who built appartment blocks or own them? It's all anecdotal but people seem to be talking about amatur legue and thinking it effects the premiership

Beruthiel

I don't see any slow down
I bought a house in feb for €245
there is a house for sale in my street right now, for the same type of house, asking price is €265.

positron

MorningStar wrote:

You should look at a thread before posting up a link as that one was already posted.

I read that link, and I wanted to quote that specific bit from it, notice the usage of quote, bold etc. I believe that is copywrited article, and hence the link right next to it.

I see why people move out but while you can get the train many can't and your house price represented that. Bear in mind though as some friends of mine discovered as the areas further out get busyy along the track you may not be able to get on the train. In fact you may be the reason somebody else can't further down the line. Your current bliss may not be sustainable and there are many people commuting for 4 hours a day and raising their children in cars

Err, (ignoring the tone in your post), the comfortable train commute may not be sustainable, but its still is and will be far better than the hour and half spend driving to City centre (on a good day, from Blanch, just 12 miles!!) - which will only get worse going forward. I can't speak for others, but at least in my case, this works well, and I don't see how its going to get any harder than the Blanch-City Centre commute in coming years (unless there is some huge investment in suburban train/luas facilities, like dart/luas to Blanch etc!

Cheers!

garred

Personally I want to sell up soon and invest in the foreign property. There are a lot more people buying property to let and with the 100% mortgage, people can afford to buy, naturally not everyone but certainly a lot of the rental market.
Went to a few new developments at the weekend and the amount of to let signs is staggering.
Its my personal opinion. People might go on about backing up with facts but facts at the end of the day seem to be opinions based on figures.

MorningStar

positron wrote:

the comfortable train commute may not be sustainable, but its still is and will be far better than the hour and half spend driving to City centre (on a good day, from Blanch, just 12 miles!!) - which will only get worse going forward.

Cheers!

No tone meant. Nothing happens in isolation would be my view. Friends of mine said as you are now that it's still better. They have been proven wrong and moved back towards the city as a result. If you can't get on the train you have to drive is what my friends discovered. If a car commute keeps getting worse so does everything else. You could be right over time but I rather my 15 minute cycle to work and if I worked directly in the city it would be no more than 30. There are benifits to living in either areas but the further you live from where you work time will just increase on your commute as time goes by unless something very dramatic happens. The property also does not increase at the same rate.

I see why people buy far out but some are doing so with a lack of insight rather than a lack of choice. No reflection on you but some people move out then start complaining about the services and the roads. It's hard not to see it as being a cause of their own choices rather than just bad planning. Effectively the worse things are in the far commuter belt will keep prices up closer to the city

Tazz T

According to the Indo today the 100% mortgage isn't going to have much of an impact on the market. Between 5 and 6% will be affected. This is due to the minimum salary requirements - 68k for a single buyer and over 70K for a couple.

When landlords start selling, that's a warning sign - as happened in the 80s in London. All of a sudden there's a surfeit of properties in the market, prices fall and other landlords panic sell. I don't think SSIAs will make a huge difference to the market either. 20 grand isn't going to make a lot of difference when you're buying a house these days. I'm using mine to pay off debt and hopefully fund a much cheaper purchase overseas.

BTW I'm not a homeowner at the moment, although I was in the UK.

Sponge Bob

Am I surprised the market peak has been reached , NO!
Am I surprised it took this long , YES!

MorningStar

Tazz T wrote:

According to the Indo today the 100% mortgage isn't going to have much of an impact on the market. Between 5 and 6% will be affected. This is due to the minimum salary requirements - 68k for a single buyer and over 70K for a couple.
20 grand isn't going to make a lot of difference when you're buying a house these days.

BTW I'm not a homeowner at the moment, although I was in the UK.

€70k for a couple is not much above the average wage.
€20k isn't the big problem it's the €40k+ from a couple and some paretns have saved the money for the kids too. Many couple will have €60k+ as FTB and existing owners will have €40k to imporve their house or upgrade some have more as the invested under their children's names which can mean as much as €80k. It's all opinion but many views are some what limited and unaccustomed to certain thinking. People who are used to money often put things in their childrens' name for example. The majority of the SSIAs are going to middle class and up people they will probably invest it in their homes or as many are doing buying houses renting them out and then plan to give them to their children. SSIAs are going to effect the market is one of the few things practicly every expert agrees on.

soma

I also live in clondalkin, I've also noticed the plethora of to-let signs in apartment blocks. Have you seen the block down near bewleys/statoil..? it's like a mini forest of signs, mind you - it's one of the ugliest looking new apt blocks I've seen in dublin and that is saying something.

Do you know what, I can almost see the market diverging in the next 2 years: houses continue to rise, apartments fall in value. A indicator could be that the 100% morts are not available to those wishing to purchase 1 bed apts, i.e. those institutions have little faith in those type of properties holding their value.

soma

quick follow up, I just did a search on daft there, no parameters other than "2 bed apt to rent, furnished, anywhere in dublin" and got 1082 results.

Is it just me or is that a hell of alot of apartments..?

A couple of years ago it was tough to rent a good apt - I remember couples turning up for a viewing and there'd literally be 7 or 8 other couples there too.

MorningStar

soma wrote:

Do you know what, I can almost see the market diverging in the next 2 years: houses continue to rise, apartments fall in value. A indicator could be that the 100% morts are not available to those wishing to purchase 1 bed apts, i.e. those institutions have little faith in those type of properties holding their value.

I think you have a point there. There seems to be an ever increasing problem with new building techniques not blocking sound. It's going to be a bigger problem in appartments than houses too. People are begining to dislike appartments for more than just the lack of garden and the traditional complaints. I think at some point certain types of houses will also loose value due to construction techniques too. It was noticable in the late 80s but when house price started to rise people stopped noticing the problems.
I think the logic on 1 bed appartments is that if things go bad people won't have the back up of renting a room out more so than the potential property value.

soma

Two other immediate & future problems I see with apts:

1) Management fees are becoming a real issue. I know several people paying between 1600-2000/yr, which really is alot of money (equivalent to several months of rent), and blows away any benefits to the purchase like mort interest relief.

2) False advertising of the above fees, people are paying 1k in year one, and 2k thereafter! :mad:

3) Management companies (mainly those who are just puppets for the original builders) doing a terrible job. (I know of one who was 40k in debt after year 1).

NotInventedHere

The apartments on the boot road seemed to have problems since the start. Another problem for apartment owners is that the Local Authorities are purchasing some of these one bedroom apartments for there housing stock. This is not anecdotal. I heard this from a director of Housing in a LA. The purchase them through solicitors.

Tazz T

soma wrote:

quick follow up, I just did a search on daft there, no parameters other than "2 bed apt to rent, furnished, anywhere in dublin" and got 1082 results.

Is it just me or is that a hell of alot of apartments..?

A couple of years ago it was tough to rent a good apt - I remember couples turning up for a viewing and there'd literally be 7 or 8 other couples there too.

I remember that. When I moved back from London I was amazed how difficult it was to get an apartment. I remember being at a viewing queued behind about 10 other people for a dive. The guy in front of me said he'd been looking for 3 months.

MorningStar

soma wrote:

Two other immediate & future problems I see with apts:

1) Management fees are becoming a real issue. I know several people paying between 1600-2000/yr, which really is alot of money (equivalent to several months of rent), and blows away any benefits to the purchase like mort interest relief.

I agree it will become a problem but just on your first point. You do get insurance and bin charges in that fee at least. If they actually did all the jobs they are meant it might be a fair price

Zaph0d

MorningStar wrote:

...THe increase in the rental market was primarily driven by these landlords who borrowed on their existing investements rather than people borrowing on their home. For every home borrowing landlord I would say there were 3 to 4 borrowing on existing rental property. It just makes sense that people used to the market reacted more quickly with more capital. It's hard to tell but logically and from my experience the small time investors are only about 10% at most of the rental market. THey just don't have the buying power or experience to take on the more seasoned investors who are on the slow burn profit. Some did sell one property and buy 2 or 3 in the next good rental area...

It's all kind of anecdotal but how many old time landlords do you know? You might know 5 people who rent out property but that's small fry. I know many people who own 10 and more. They have a lot more effect on the market than the amount of small fry. How many people do you know who built appartment blocks or own them? It's all anecdotal but people seem to be talking about amatur legue and thinking it effects the premiership

This government survey of landlords, taken 5 years ago, seems to contradict your view that few landlords are single property small fry.
http://www.housingunit.ie/publications/newsletter_3.pdf

The most significant findings are as follows: 70 per cent of respondents first became landlords in the 1990s with 57 percent of this group first investing between 1995 and 1999.These landlords have led the expansion of the PRS in the 1990s but the small nature of landlord investment is demonstrated by the finding that firstly 96 per cent of landlords describe themselves as ‘individuals’ and 61 percent of this group hold only one property for letting.Typically this group of landlords purchased the second property as an investment vehicle, with the actual letting ofthe property and therefore the provision of accommodation being of somewhat secondary importance

When I first read this a few years ago I thought the findings were fairly obvious. Most people I knew had decided to buy a second property or not sell their old house when moving. All of them must have had one eye on what estate agents call 'strong capital appreciation'.

ionapaul

Check out www.askaboutmoney.com for all the threads going 'My partner and I are planning to trade up, should we keep our existing residence as a rental property?' - even if there are not a huge amount of these 'amateur' landlords on the ground, many MANY Irish people now have swallowed the get-rich-quick as a landlord idea and are becoming heavily involved (and endebted) in a business / investment they mightn't have much fundamental knowledge of. I also know a few friends in their late 20s who have bought a PPR here, and recently have bought abroad in Eastern Europe, markets they know absolutely nothing about! Crazy. There seems a mania for property in this country, despite most agreeing that equities deliver a better ROI in the long term. The building trade will only be happy when each and every Irish person owns their own home and has a property or two to invest out!

I agree that apartments are where the real bite will be felt when or if prices start to decline. Those €350,000 two bedrooms in the Liberties look like awful investments...

MorningStar

Zaph0d wrote:

This government survey of landlords, taken 5 years ago, seems to contradict your view that few landlords are single property small fry.
http://www.housingunit.ie/publications/newsletter_3.pdf

When I first read this a few years ago I thought the findings were fairly obvious. Most people I knew had decided to buy a second property or not sell their old house when moving. All of them must have had one eye on what estate agents call 'strong capital appreciation'.

I will gladdly stand corrected but can you tell me which page and what the report is based on. I will say my friends are now registered businesses so are probably avided in such surveys. If it avoids office property it is then it kind of misses another huge section of the landlord market.

It could be we are just in different circles. I do think a lot of people hold onto their last property but that is really only certain areas where it is viable. A family home is often very baddly suited to renting. If this is what people are doing then they aren't really relying on market increases for profit in the manner you described.

soma

ionapaul wrote:

I agree that apartments are where the real bite will be felt when or if prices start to decline. Those €350,000 two bedrooms in the Liberties look like awful investments...

Well, at least those apartments (altho I dont now the specifics here..) are close to the city centre. It's the apartments in the not-so-great dublin suburbs and commuter counties that I'd be most wary of. I mean a quarter million to live in a box in clondakin, tallaght or finglas..? huh..?

PS Im not against apts per se, if they built them like the ones on the continent which are more like actual homes that'd be alot better.

MorningStar

soma wrote:

PS Im not against apts per se, if they built them like the ones on the continent which are more like actual homes that'd be alot better.

I agree appartments now seem to be like student accomadation rather than homes. I own an appartment off Mount Street built in the 80s. It has three bed rooms, a huge living room and seperate kitchen. Generally they were all pretty decent sizes before the boom where they became clever use of space and then to now, cram them in. I don't know why anybody would buy an appartment in places like Ashbourne is a real mystery to me. The town houses in a country location seems equally crazy. You can increase density without being so simply minded.