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

Amadan Dubh · 04-12-2021 1:01am

In the 2016 census I think it was something like 80% of 25-34 year olds did not own their own home. I would imagine it isn't that much lower than 80% in 2021 if you extended that from 25-39.

What that means in relation to your questions is that (1) there aren't a lot of 20/30 somethings buying houses (2) they are generally FTBs and therefore priced out of the likes of Sandymount (3) given this demographic are likely to be renters and renting is a very impermenant, transient state to be in in Ireland, those in their 20s and 30s would in general be prioritising socialising over settling and Sandymount doesn't really attract that mindset.

04-12-2021 3:48pm

https://www.boards.ie/discussion/comment/118266370#Comment_118266370

I rented in Ballsbridge for a while and I don't really agree with your assessment. I loved living there, absolute ton of bars and restaurants on my doorstep, was about a 15 min walk from Stephen's Green, and is this motorway you speak of... Baggot St? Errr, no. It was a fantastic place to live in my late 20s or so with a few bob in my pocket before rents went absolutely mental.

04-12-2021 4:13pm

https://www.boards.ie/discussion/comment/118268603#Comment_118268603

I rented there too in my 20s. Basement flat on raglan road with mates, in one of those giant Georgian terraces. Bars all around, close to town (so walkable in the pre taxi deregulation days), easy running across to Sandymount and along the sea. Was a great place to live

Marius34 · 04-12-2021 10:41pm

I have made some rough estimates for 2022 Census CSO household size.

It's likely to be close to 2016. I'm not sure how someone would be able to get any significant decrease in household size.

Numbers in millions.

mcsean2163 · 05-12-2021 1:42am

Recent CSO big data estimate points to population of 5.2 million.

Marius34 · 05-12-2021 1:32pm

https://www.boards.ie/discussion/comment/118270728#Comment_118270728

As I mentioned, different methods can produce different results, thus we need to understand methods, and compare only likes with likes.

Looking at this big data evaluation, the difference on population is crazy, I would not be surprise if the difference would be less than 1% (50K or so), but 200K in difference, that sound very strange.

Amadan Dubh · 05-12-2021 1:52pm

Some stories on lobbyists published today and a couple of days ago. I can't read the second article but it is in a property investor publication and is expressing frustration at the proposed leverage cap on Irish property funds.

The problem of populist measures will continue I think so long as the situation is not corrected; there are going to be even more populist measures and tinkering around the edges that help no one. If the government are worried about international investment being spooked, well they just can't have their cake of high housing costs while eating up continued foreign investment. That is the clash which has been brewing and won't be easy to resolve.

https://www.businesspost.ie/houses/donohoe-was-told-to-say-that-trend-of-landlords-sitting-on-empty-units-would-correct-itself-2e55900c

Donohoe was told to say that trend of landlords sitting on empty units would ‘correct itself’

Opposition TD claims government is bowing to vested interests in defending the practice instead of countering it through punitive taxes.

Paschal Donohoe, the Minister for Finance, has repeatedly rebuffed calls for the tax because his department believes a levy would have a minimal effect on housing supply.

Donohoe was told to say that trend of landlords sitting on empty units would ‘correct itself’

Opposition TD claims government is bowing to vested interests in defending the practice instead of countering it through punitive taxes.

https://reactnews.com/article/frustration-grows-over-repeated-rule-changes-in-irish-market/

Frustration grows over repeated rule changes in Irish market

M_Murphy57 · 05-12-2021 2:48pm

https://www.boards.ie/discussion/comment/118266370#Comment_118266370

Sandymount is beautiful. I'd pick it over ballsbridge any day.

There is talk of coastal erosion - sample https://www.irishtimes.com/news/environment/over-70-000-irish-addresses-at-risk-of-coastal-flooding-by-2050-1.4258531

But I doubt that explains the low views. Maybe young people just *assume* they can't afford it and don't put it into their searches.

hometruths · 05-12-2021 3:56pm

https://www.boards.ie/discussion/comment/118271690#Comment_118271690

It has occurred to me that one possible explanation for all the anomalies we see in the figures is because there is a very large unofficial population who are difficult to count.

i.e either our population figures are correct and there is an artificial housing supply shortage of the stock, or our population figures are incorrect and the housing stock is at full capacity.

Very few other credible explanations IMO.

fliball123 · 06-12-2021 11:36am

https://www.boards.ie/discussion/comment/118263328#Comment_118263328

I believe that 2.5 is more accurate a figure than 2.6 as I said in 2018 it had already dropped from 2.75 to 2.6 in 2 years and in the 3 years since our birth rate has decreased, our migration rate inwards has decreased and death rate and build completion rate has also gone up so like I say its definitely lower than 2.6 which is what it was in 2018. (sure an up to date figure will be release next year)

The problem with way your measuring is there are too many unknowns with the count that you are using. We don't have a count of derelict properties or properties with no supporting infrastructure, we don't know if they knocked on the door once, twice or did they count it as not being used because the electricity was cut off and if it was cut off was it because of payments or we do we know if the owners were in transit moving in or moving out of a property. Where the owners on holidays or away (Remember there are almost 40k holiday homes in the country). There are just way too many variables that could skew the figures either way. So with that said what you can measure is the current stock up for sale, rent (myhome, daft, rent.ie), the housing list and the homeless list. These 4 tangibles that when measured separately or taken together would seem to suggest that we don't have enough housing built with the right infrastructure and that are habitable to house our population so your measure is way off as you cant just include them all and say that they were all there ready with the right supporting infrastructure, habitable and unoccupied. You also only have to look at the political side of this. If what your trying to say is true and we had nearly 100k houses habitable and unoccupied do you not think Sinn Fein would be up on Kilimanjaro shouting as loudly as they can and pointing to this? This one area would IMO push them over the edge with the popular vote and they would garner even more political gains and conversely if FF/FG had this amount of properties available to house do you not think that even one politician would have the common sense to get these properties into circulation. Housing after Covid is the number 1 issue for the majority in this country

Throw in the fact that if the properties are sitting their idle it means there owners are making no money off them. You only need to look at the current rent and sale figures to realize that only a moron would do this. I don't think we have that many gobshites living here, I could be wrong but all the evidence I see and that can be measured would suggest your theory is wrong.

I think we will have to agree to disagree on this one as any explanation you put forward would have to have an explanation for the following

Housing list

Homeless list

Houses for Sale/Rent

Why have the political classes not used this figure to garner more support

Why have we so many dopey landlords and property owners in the country that in a time of all time high rents and close to an all time high for sales figures they would leave a property empty?

The only explanation I can see that covers all of the above is that we have not got enough housing to house our population.

fliball123 · 06-12-2021 11:37am

https://www.boards.ie/discussion/comment/118265005#Comment_118265005

But why are they lying empty and do we know if they are really empty?

06-12-2021 1:08pm

https://www.boards.ie/discussion/comment/118276408#Comment_118276408

They are empty, these are in my neighbourhood. Also, just this morning I took a walk around the small rural town where my mother lives, there are vacant properties there, literally as long as I can remember. During the Celtic tiger, they were building tax incentivised housing estate, bought by people who never even set foot in the town. Many of them are rented, but plenty lying empty for years also.

It's the same in Dublin, thousands of places lying empty and the government are giving tax breaks to first time buyers to buy from developers, miles away from proper infrastructure.

anyone who owns property lying empty or derelict have too much money. They need to do something about that

iColdFusion · 06-12-2021 3:26pm

https://www.boards.ie/discussion/comment/118276408#Comment_118276408

DW have a good documentary on current housing issues across the world, some properties are being bought up as pure investments based on them increasing in price over time, renting them out would limit your ability to sell them on so that they are left vacant.

Also a lot of money laundering in major cities, Pablo Escobar types buying up a property and then selling it to themselves at an inflated price via an offshore company to launder dirty money into a western economy driving up local house prices

https://youtu.be/NPloUxLWfB8

iColdFusion · 06-12-2021 3:32pm

https://www.boards.ie/discussion/comment/118276935#Comment_118276935

It simply costs too much to renovate a derelict property and its quite hard to find out who owns them is why a lot are lying idle, doesn't make sense for any private individual to invest that money instead of buying new and property investors aren't interested unless it can be turned into 9 apts. Government plan is more taxes as per usual which wont fix the underlying viability issue, they need to extend HTP to derelict properties.

yer man! · 06-12-2021 4:51pm

https://www.boards.ie/discussion/comment/118277915#Comment_118277915

HTB for derelict properties to assist in the renovation would be very interesting! I just bought a new build and one of the things that was drawing me to it was the HTB. If I couldn't get a new build, my next port of call was going to be seeking out a derelict property and attempting to do it up.

Marius34 · 06-12-2021 4:56pm

https://www.boards.ie/discussion/comment/118272232#Comment_118272232

so in short, there is no credible explanation.

Timing belt · 06-12-2021 5:07pm

https://www.boards.ie/discussion/comment/118277915#Comment_118277915

The Properties are deemed habitable and not derelict because the have walls, windows and a roof. I agree that to buy and do up is more expensive than buying new and you also have the risk of a serious issue existing. The problem with extending the HTB scheme to derelict properties is that the ones that could be done up and made livable are deemed habitable and therefore would not qualify. If the scheme was extended to these habitable properties then where do you draw the line with these habitable properties and second hand properties.

The idea behind a vacancy tax is to prevent:

In cities developers are happy to buy them and sit on properties with the hope to get a property next door so the can knock it down and build apartments.
The majority of the properties that are readily liveable but vacant these are normally properties that are for sale or to rent. And are not being sold or rented out because they are overpriced compared to market prices.

Timing belt · 06-12-2021 5:17pm

https://www.boards.ie/discussion/comment/118276399#Comment_118276399

The other thing that you need to consider is that measuring housing stock at a total level does not take into account enough houses in the areas where the demand is and a surplus of properties in areas with low demand.

Likewise there may be enough housing stock based on a formula because young adults are living at home with parents but these adults contribute to the demand as they want to have a place of there own. If demand stays strong then the only way that prices will drop if there is a surplus of properties to buy/rent in the areas in demand which will lead to a drop in rents and house prices.

hometruths · 06-12-2021 6:28pm

https://www.boards.ie/discussion/comment/118278500#Comment_118278500

both the explanations I offered are credible, IMO.

it is one or the other. The former seems the most likely to me.

Marius34 · 06-12-2021 6:46pm

https://www.boards.ie/discussion/comment/118279026#Comment_118279026

"population figures are incorrect and the housing stock is at full capacity"

How this is credible? It's surprising to hear this from you.

hometruths · 06-12-2021 6:55pm

https://www.boards.ie/discussion/comment/118279147#Comment_118279147

i agree it is less credible than the former explanation, but if the former explanation is not true then then the only credible remaining theory is that the population figures are incorrect, and underreported.

i.e there are the guts of 500k foreign baristas etc who hide in plain sight at census time.

Marius34 · 06-12-2021 8:29pm

https://www.boards.ie/discussion/comment/118279205#Comment_118279205

not long ago, you was confidently arguing that there is oversupply in housing stocks. And suddenly "housing stock is at full capacity" is a credible case.

As you see, the situation with housing is complex. And might be totally opposite to initial opinion.

hometruths · 06-12-2021 8:38pm

https://www.boards.ie/discussion/comment/118279670#Comment_118279670

I'm still arguing we have more houses than we need. it's not that complex:

i.e either our population figures are correct and there is an artificial housing supply shortage of the stock, or our population figures are incorrect and the housing stock is at full capacity...

...it is one or the other. The former seems the most likely to me.

Amadan Dubh · 07-12-2021 9:30am

The denial phase.

"If you add another €1.5bn, that I've plucked from the sky, to the current transacted amount we could have our strongest year ever".

https://www.irishtimes.com/business/commercial-property/commercial-property-investment-market-set-to-enjoy-second-strongest-year-ever-1.4744993

The office vacancy rate rose from 5 per cent in 2019 to 10.7 per cent currently, and will peak at about 14 per cent in 2022. Rents have eased by about 7.5 per cent and the market will continue to evolve in favour of tenants in 2022 and into 2023.

Overall, with €3.5 billion investment turnover so far, and potentially €5 billion for the year, the market is robust and suggests strong liquidity. Remarkably, we may have the second strongest year ever, and continued growth, when supply realigns with demand.

Bass Reeves · 07-12-2021 10:49am

We have very little information on vacant property. One of the biggest owners of vacant property are the LA.

The problem with vacant property is the cost of doing it up. Legally you have to bring it to Ber rating A or B. At present building costs are 130-200/ sqft depending on where in the country you are. Building that are vacant for 10 it more years may need serious amount of work to become habitable.

An an awful lot of these properties are along streets of towns and villages. Many have not been lived in for 20 years or more as people moved away from living directly on streets in towns and villages. Many have been accumulated by individuals either as an investor or through inheritance.

Then there is the accommodation above commercial premises that have become virtually impossible to use through fire regulations and insurance costs.

If we assume most of these need complete refurbishment at, near or maybe above new build costs you see the problem. A thousand sqft building would cost 100-200k to refurbished and that might only be to builders finish

If you then decide to rent it is there an economic return. Assuming that the dearest costs if refurbishment is in Dublin and the cheapest in rural Ireland then looks at the returns. Many of these smaller properties would be 2 or 3 bed. In Dublin 2-2.5k/ month or 22-27k/ year( allowing for vacancy between rentals) on a 200k investment on paper seems good but in reality with Irish tax laws is not very attractive. You also have to factor in present rental laws and

In a small town or village, it might make 6-800/ year or 6.5-9k, with a larger risk of vacancy as well as probably providing HAP housing.

iColdFusion · 07-12-2021 12:19pm

https://www.boards.ie/discussion/comment/118282605#Comment_118282605

And that's before you even get into planning issues with refurbishing derelict houses, planners will put you through the ringer to maintain as much of the original structure and features as possible pushing the build costs even higher trying to meet the building regs with an old structure, you'd need to be getting a badly derelict house almost free to make it worthwhile considering the potential unknown costs.

Villa05 · 07-12-2021 12:58pm

https://www.boards.ie/discussion/comment/118282605#Comment_118282605

Rte should start a show called hammered homes to compete with homes under the hammer. This show will detail all the reasons why homes under the hammer is a fraud and old houses are useless and Eveything must be new.

CIF have offered to sponsor the show

ittakestwo · 07-12-2021 4:56pm

The census is a snap shot on one night in April. AFAIK if you are not home that night your home is considered ''vacant''. It does not mean the home is permanently vacant and that there is no one living there.

The average household size in UK is 2.4, in the US it is 2.5. Probably long term Ireland's average house hold should be 2.5. Ireland has a slightly younger population than the UK and US so perhaps there is justification for it being slightly higher today.

Lets make a presumption that today we should have a household size of 2.5 and by the fact we have 2.7 shows that there is under supply today. Given Ireland's 5m population that would mean we are 150k houses under supplied today. Let say we want to get rid of this over a 10 year period as well as providing accommodation for the population growth over the next 10 years. If the population will grow annually by 50k, swell as clearing the back log of under supplied homes. This would equate in us building 20k a year for the population increase and 15k a year to clear the back log. This would be about 35k a year.

07-12-2021 5:06pm

Listening to Sturgeon there. She is absolutely bricking it. Going on about the R number of omicron being over 2. Completely caught up in the numbers. She needs to calm down

cnocbui · 07-12-2021 7:46pm

https://www.boards.ie/discussion/comment/118285306#Comment_118285306

Well I won't be using that omicrom stuff to insulate my house then. An R of 2 is near useless, needs to be at least 6.

07-12-2021 7:59pm

https://www.boards.ie/discussion/comment/118286230#Comment_118286230

Oops! No delete function

Villa05 · 08-12-2021 11:15am

Carol Talon reporting on yesterday's newstalk breakfast that many of these bank of mum and dad deposits are in fact credit union loans that their children would be expected to meet the repayments.

More than likely still cheaper than renting, but yet more evidence of the bubble aggressively inflating to compete against the state and investment funds

fliball123 · 08-12-2021 11:40am

https://www.boards.ie/discussion/comment/118289010#Comment_118289010

https://www.boards.ie/discussion/comment/118272232#Comment_118272232

There has always been this kind of thing going on I did this with my first mortgage as well to meet the LTV ratio needed to get the loan and we were not in a bubble when this happened.

MacronvFrugals · 08-12-2021 12:09pm

Can't imagine folks in DonnyBrook are too happy with this,

https://www.rte.ie/news/business/2021/1207/1265310-kielys-shared-co-living-scheme/

bleaks · 08-12-2021 3:53pm

With Avant cutting their interest rates from tomorrow, would people expect other providers to follow suit in the coming weeks/start of new year to remain competitive?

08-12-2021 4:04pm

https://www.boards.ie/discussion/comment/118289322#Comment_118289322

Kielys is no Cobblestone. That objection seems like a reach.

Is there anything problematic with this other than NIMBYism?

Amadan Dubh · 08-12-2021 5:04pm

No good reason to object. That is the N11 going outside the development, a main road from Dublin City all the way south through Wicklow with multiple bus routes going right outside the door. Further, it is not a far walk into town from the development. There are zero residential streets to be burdened with the new development so any objections are fundamentally and absolutely NIMBY based.

Will be good to see that development go up as Kielys is a large premises sitting idle for a few years at this stage which is tragic for a village so close to the city centre. Donnybrook as a village has a large number of vacant commercial premises, it looks like a bit of a kip at the moment.

Marius34 · 08-12-2021 6:25pm

https://www.boards.ie/discussion/comment/118285254#Comment_118285254

Good point in comparing with other advanced economies. Although the calculation methodologies might be bit different.

Due to ramp up in construction I believe we are currently at the point where household size in Ireland is starting to go slowly down after decade of increase/stability.

wassie · 09-12-2021 10:11am

https://www.boards.ie/discussion/comment/118290800#Comment_118290800

Probably not. As discussed just recently, Avants lending criteria is so strict they only lend to only the most prime borrowers which rules outs the vast majority of folk looking for a mortgage. The other lenders know this.

Cyrus · 09-12-2021 10:16am

https://www.boards.ie/discussion/comment/118294252#Comment_118294252

Is Avants lending criteria that strict? whats the rationale for saying they rule out the vast majority?

AdamD · 09-12-2021 11:19am

https://www.boards.ie/discussion/comment/118291187#Comment_118291187

Yeah its a funny one, a combination of Nimbys, poor public transport and other social trends are slowly killing any life that was in that area.

Cyrus · 09-12-2021 11:33am

https://www.boards.ie/discussion/comment/118294603#Comment_118294603

pretty difficult to generate any sort of village atmosphere with the n11 going right through it, although even when i lived there 20 years ago i never felt donnybrook had much going on as a village although i enjoyed kielys.

wassie · 09-12-2021 11:42am

https://www.boards.ie/discussion/comment/118294268#Comment_118294268

Yes (to avail of the lowest rates) - Because the vast majority of borrowers don't have 20% deposits, LVRs, serviceability & income criteria. Also it is not available in all locations - typically major urban areas. My broker said he doesnt write a lot of loans as they are only interested in taking the cream (i.e. lowest risk borrowers). Doesnt seem like a strategy in attracting market share.

There's even a view held on other forums that Avant's not in it for the long term in the Irish market.

Arnold54321 · 09-12-2021 12:01pm

Maybe this isn't the thread to post this however I was wondering why are houses in Dalkey, at say the 700/800 price range, going for much more over the asking than in Blackrock/Monkstown/Booterstown areas? I would have thought those three areas would be seen as more desirable and obviously closer to town.

Again a very general and overly simplistic comment which I'm sure is happening everywhere in the country but it seems houses in say, Dalkey, go online and immediately are sale agreed way over the asking much sooner than the above three locations which I personally prefer.

Cyrus · 09-12-2021 12:32pm

https://www.boards.ie/discussion/comment/118294708#Comment_118294708

They have broadened the locations (it is nationwide now) and the majority of mortgage holders will meet the leverage requirements (this isnt just new mortgages it is switchers also). I dont think that stands up to scrutiny to be honest.

Cyrus · 09-12-2021 12:34pm

https://www.boards.ie/discussion/comment/118294821#Comment_118294821

Dalkey is probably the most desirable part of Dublin now, it has its own social scene, still on the dart line and if you are wfh where better to be (you have the sea, killiney hill etc in close proximity). That said there arent too many houses in the 700-800k range so im not surprised they sell quickly.

Being close to town is getting less important.

Arnold54321 · 09-12-2021 1:24pm

https://www.boards.ie/discussion/comment/118294991#Comment_118294991

Houses in say Mapas estate have gone extremely expensive, nothing under €800k, these days which is somewhat extreme. The same goes for normal houses around Hyde Park, granted not 4 bedrooms plus, and neighbouring roads in Glenageary estates. Where total wrecks are going for €750k (and well over asking) but still need at least €200k work. These are all mind boggling figures.

Cyrus · 09-12-2021 1:31pm

https://www.boards.ie/discussion/comment/118295282#Comment_118295282

Houses are up around 40% in the past 5 years in Dalkey from what i can see. Mapas is a very ordinary estate but its in a prime location.

Also i would suggest that 200k doesnt go as far as you might hope in terms of getting a wreck right..

Amadan Dubh · 09-12-2021 4:48pm

Evergrande is officially in default and has been downgraded by Fitch - the next couple of years are going to be catastrophic for China.

Closer to home. the Central Bank's deputy governor had a speech published today on the regulator's website. One thing that drives me mad is seeing statements along the lines of "It's expensive in Ireland, but....it's expensive in other places", like what does that mean? How is it a "but"? A but in this context is generally, in my experience, used by those who don't want to see affordability challenges overcome and essentially are pretty happy with the status quo in the housing market "No sex please, we're Irish". Unsurprising from our Central Bank to see such a pitiful ode to the crisis, I've already stated my position on their post-08 performance.

Her statements smack of the "thoughts and prayers" comments on social media when someone has died or "share to raise awareness"; utterly useless and self-serving. However, you'd think the deputy governor of the regulator might be more concerned about house prices rocketing to Celtic Tiger levels, increasing 90%+ in 9 years. "This time it's different" - for sure it ain't.

https://www.centralbank.ie/news/article/housing-policy-should-focus-on-the-sustainable-supply-of-housing-to-meet-the-growing-needs-of-citizens-deputy-governor-sharon-donnery-9-december-2021

Ms. Donnery said “for a sample of advanced economies in recent years, relatively high levels of house prices to incomes has been a widespread phenomenon. This, of course, will not provide any great solace to those trying to purchase a home, but it is important to place the Irish experience in its full context.”

"Thoughts and prayers".

She said, “Looking at the Irish housing market, and considering whether there is enough supply to meet demand, I believe the answer is clear. Demand for housing is strong and supply has not kept pace.” In this regard, the Deputy Governor noted that “unsustainable levels of credit will not lead to a sustainable supply of new homes. If anything, it risks the re-emergence of a credit price spiral and another painful boom-bust housing cycle.” She continued, “The challenges facing the wider housing market, around sustainability of supply and house price affordability, would not be addressed by excessive indebtedness of households or imprudent lending.”

She gets paid for making comments like that?

awec · 09-12-2021 5:16pm

https://www.boards.ie/discussion/comment/118296575#Comment_118296575

Just because she isn't saying what you want to hear doesn't make she is wrong. 😊

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

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