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

German property market in serious trouble

"House prices were down 10 per cent year on year in the second quarter, while the number of building permits issued has sunk far more quickly here than in the region as a whole. In October, 22.2 per cent of companies reported cancelled projects — the most since the Ifo think-tank began recording the figure in 1991."

German homebuilding collapse threatens wider economic damage

https://www.ft.com/content/b60fa38a-9cca-4170-a9f7-a0826b9ca74b?segmentID=4cc83cbd-00b2-0eef-d1f7-f57621fd8a1e&fbclid=IwAR1H7V2_T-C8HMrQgcoP3EbKseSyQKRsbHPe6Ts6gFWuSMsmIgW7QOHLqrM_aem_AaUUhK8GBLyppMgL9_f2_c-awGMLoW1RJoSv0S5AXLh1JbHinKtEWugrGkmVRLr6uLnRMiIY9lLM6z0-cW8UnwJ-

germany had 0.9% 20y fixes during covid.

not comparable to Ireland. Construction costs are also almost higher than Ireland.

Rates dropping and more jumps in European real estate stocks.

buy now or be priced out forever!

I wonder how many AirBnB restricted properties actually make it to the private rental sector though?

If I had an AirBnB property, I wouldnt be persuaded to take it down and rent it on the private market.

I would AirBnB it for the max possible time and leave empty outside of that.

But I could be wrong and perhaps a lot of AirBnB landlords have pivoted to the rental market?

This is the best summary of the current Irish property market I've seen recently.

The fact we had more new housing units completed in 1975 or 1980 than in 2019 or 2021, despite our population being not far off of half of what it is now, just really shows how little has been achieved since 2016. Especially when you consider the financial state of Ireland then vs now.

But isnt that exactly what they are doing?

If you have a D2 apartment, AirBnB it for 30 days during large events in the city and make a killing.

No doubt there are some renting off the books now and then also. (not advocating that)

The strategy avoids all the risks with being a current landlord and the asset will appreciate over time anyway.

Would be interesting to see stats on which way the wind is blowing on this subject, but i recall property owners on here saying no way would they go into the rental market.

There still are a lot of places on AirBnB in Dublin. So are people adhering to the 30 day limit?

I dont know.

A maximum of 30 days AirBNB over a year won't come anywhere near a full year's private sector market rental. The current ratio in Dublin is generally approx 1:3 (ie an airbnb's average nightly rental is about 3 times that of in the long term private sector). Thats why I mentioned an approx 75% drop in income in a comparison between the two. Even if it was somehow 1:6 though, through being only occupied on 30 absolute peak nights (which is harder than you'd think - Dublin doesn't have that many huge events), it would still be miles off.

Bear in mind the AirBNB'd property will also have costs like AirBNB's cut (up to 14%), cleaning/admin costs, and be liable for a vacant property tax.

Lots of landlords on the internet might claim they'll only AirBNB their property for 30 days a year instead of return it to the private sector rental market but in reality the maths of that just won't add up. Particularly if they have any sort of mortgage to pay - a 75% loss in leveraged asset income isn't remotely viable.

The graph doesn't include 2022, 29,851 units were completed in it according to the CSO. Which is still only at the same level as 1981 and below every year from 1995->2008.

90k was obviously too much, but all the current projections are now that we need to be hitting 50-60k a year. Which we're very far away from unfortunately.

I wonder how many people are actually sticking to the 30 day rule then, because there are plenty of AirBnB options im Dublin and I know people that have stayed in them recently.

I agree on the 50k to 60k new homes needed, but it just doesnt look attainable at the moment.

Of course, there will be a slow down in commercial construction next year, so that will free up some of the workforce for residential, but realistically, can we go much past 35k - 40k? I doubt it.

Isnt the pipeline also slowing down after 2024, so less new devs to approve anyway. Although I expect there is still a backlog of builds not yet started and overdue.

Just to clarify, from experience Airbnb’s cut is 3% from the host, there is a fee applied by them to the guest, and the host charges a cleaning fee on top of the booking, in my case €75, which covers the costs of cleaning each time a guest leaves.

For many hosts the reduction in income more than compensates for not having a tenancy. Many only advertise for weekend let’s rather than expecting full time occupancy and when you consider the costs of hotels for events (I looked at staying 1 night in the city for Coldplay next year and it was €900) there is scope for a higher fee using the dynamic pricing function on the Airbnb site. So don’t take the prices you see today as indicative of prices at times when demand is higher.

Pretty much, but the requirement is completely unenforced.

As I posted, Airbnb takes a 3% cut from my earnings, I don’t apply strict cancellation terms, I don’t need to. I doubt many do.

Off the top of your head isn’t a true reflection on times when demand is higher. And again, I would presume most hosts accept lower income as a trade off for not having a tenancy.

To provide context, Staycity operate aparthotels, a look at their website will confirm to most that they are not depriving fans of housing anymore than hotels or hostels could be considered to be depriving housing.

Never heard of them before, they do look like nice places to stay.

https://www.staycity.com/dublin

It’s an aparthotel, did you look at their site before you posted? Applying your logic, hotels and hostels are depriving people of housing.

All convoluted rules do is push part of the economy off grid. As an AirBnB host you start taking bookings outside these systems. It's impossible to prove. Repeat customers keep coming get a bit of discounts and the host fets spending money.

Every one wanted LL's fully tax compliant. They got it they also got much higher rents. They wanted regulations, regulation costs money guess who pays more longer term.

Thanks, great post and all entirely predictable.

The way the govt will solve the housing crisis is by building social and affordable homes themselves, not by trying to strongarm private property owners into doing what the govt wants them to do with a landlords personal property.