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

keep using tramore as an example and not maybe somewhere like dublin where the issue is of a far greater importance to everyone living there.

I just did a search for Tramore for Saturday 1-2 of July (peak season you might say). 2 places to let and both are private rooms. Probably fair to say Airbnb is not that active in Tramore. I also checked for the Saturday of the 5-6th of August and there are 3 places (2 of which are the ones here).

It’s important to know how Airbnb works. My property has minimum 2 night stay. If you put in 8-11 June, there are 79 properties advertised in Tramore. Leave out the dates and just check how many Airbnb properties there are in/close to Tramore, 757. Fair to say, Airbnb is pretty active.

Obviously have never been in Tramore during the summer 😂😂

The clamor for the exits begins

Yes news more in line with what is happening in other countries.

Notable that only half of ftb think the change in mortgage rules was a good idea

Looks like these reits/investment funds got carried away with the mania. Who would have thought that free money for long periods would have consequences

Irish Life has blocked withdrawals from its €500 million Irish property fund for the next six months following a recent spike in the number of requests by investors seeking to get their money back, the Business Post has learned.

The insurance and pensions company confirmed to this newspaper that it has closed the fund until at least the end of August as it seeks to liquidate some of its property portfolio in order to pay for future investor withdrawals.

In the last six months, Irish Life has booked multiple incremental write-downs in the value of its Irish property fund, which has seen it lose more than 4 per cent in value. Since the start of the pandemic, the fund’s value is down more than 7 per cent. The latest write-down booked by the fund wiped almost €10 million off its overall value.

The company said it is still in the process of writing to investors to inform them that withdrawals from its Irish property fund have been suspended.

“Irish Life has introduced a six-month notice period for withdrawal requests from Irish Property Fund, which has €0.5 billion assets under management. This decision has been taken due to the recent increase in the level of customer withdrawals from this fund,” the firm said in a statement to the Business Post.

“The notice period allows time to make any property sales as required to pay future withdrawals, in a way that is fair to all of our Irish Property Fund customers. Irish Life will contact customers to tell them about the notice period.

Alongside its €500 million Irish property fund, the insurance and pension company said it also operates a separate €1.7 billion property fund called the “Exempt” fund, which it said is not impacted by the decision to limit withdrawals.

“Our long-term property outlook is favourable and unchanged. We continue to see property as an important part of people’s pension and investment portfolios,” the insurance company added.

Market correction

The move by Irish Life is just the latest sign that Ireland’s commercial property market is facing a significant correction in 2023. Earlier this year, Bank of Ireland limited withdrawals by investors until further notice from a €70 million real estate investment fund it operates under its New Ireland subsidiary.

An analysis carried out by the Business Post in January estimated that up to €10 billion could be wiped off the value of commercial property in Ireland this year due to rising interest rates and weakening demand.

Market analysts are projecting that commercial property values across retail, industrial, logistics, office and residential units will fall between 10 and 20 per cent this year in response to the changing economic environment.

With more than €50 billion-worth of professionally managed investment property in Ireland at the end of last year, the expected downturn in commercial property means between €5 and €10 billion could be wiped off the overall value of the market in 2023.

The three main property investment funds in Ireland, which are controlled by Bank of Ireland, Aviva and Irish Life, have booked multiple write-downs over recent months as the market begins to adjust.

Colm Lauder, head of real estate at Goodbody stockbrokers, has previously warned that significant write-downs in the value of Irish property are inevitable as a result of this continued rise in interest rates coupled with weak demand.

In a research note to investors back in January, Lauder forecasted that prime Grade A office blocks in Dublin city centre will lose up to 20 per cent of their value this year, while commercial retail properties could lose up to 10 per cent in value.

Goodbody estimates that industrial and logistics properties will lose up to 20 per cent of their capital value this year despite strong demand, while residential investment properties will drop by 10 to 12 per cent in value.

“For debt-backed property investors, the pricing of property has to adjust quite considerably to reflect the rising interest rate environment. In Ireland, the property market has been to slow to react to rising interest rates. But if you look at the market in London, commercial property values have already started to fall,” Lauder said.

“The Irish market typically moves at a lag to London. Ultimately the trend here is heading in the same direction and property valuations are going to continue to decline. I think interest rates will hit 4-and-a-bit percentage points by the middle of this year and then they may begin to drift back in 2024.

“Yields on property have to adjust to the changing interest rates because investors need a risk premium and return on their investment. It’s just simple maths,” he added.

Buy your own furniture? , absolutely, same as a secondhand house normally, as for a kitchen maybe at the cheaper end, not something ive seen before a new house coming without a kitchen.

If everything was binary, what you're saying would be fine. I can see the appeal of institutional landlords to some people. But these small landlords aren't being replaced, so supply is going down and the rental market was already in a terrible place so its not in a position to accommodate the loss in supply.

And some of those selling are likely these "landlords" whom we get told about who have property but who don't rent it out because it's not worth their while to do so.............

The houses that are being sold are not being demolished.

It is a completely dysfunctional market when there is more profit available for speculative behaviour than there is for actual use of the assets - because it means that the value of the asset has no link to what it can provide.

the reality is another 2% interest rate rise slapped onto mortgages over the coming next 4 months will increase would be borrowers repayments by several thousand more every year .. unless both FTB's are on very high wages the reality is afforable demand for houses here will ultimately have to fall regardless of a shortage of supply