The_Conductor Seriously, don't go there...............
#1

Happy New Year to you all.

So many different events occurred last year- that few of us could scarcely have imagined possible- which will reverberate for a significant time to come- and effect us in ways that will present both opportunities and threats to all of those with a vested interest in the Irish property market- both in 2017- and years hence.

We have many developments, specific to Ireland- which may help further stabilise the market here- some of the pertinent developments are of course:

1. The Minister's most recent indirect meddling in the BTL market, which has introduced national rent control by the back door (of course its not called this- but lets call a spade a spade). In recent months- BTL investors have, according to several chains of national estate agents, represented over 50% of all purchasers in the market. It is entirely foreseeable that this will slow markedly- which may tighten the amount of growth in our supply of rental property- which simultaneously give a few opportunities to other prospective purchasers that they might not otherwise have.

2. Construction of new residential units- is increasing incrementally- and the ESRI and CFI (who rarely agree on anything) are both predicting somewhere between 17,400 and 18,000 new units being completed in 2017. This is still significantly below the 25,000 to 30,000 which is commonly stated as the quantity of new properties we need to satisfy annual demand- however, its a remarkable turnaround in only 3-4 years. Its predicted we will hit 20,000 units in 2018 and possibly 25,000 units in 2020- which I'll believe when I see. The bigger issue is of course- location, location, location. Where are these units to be built? Dublin City Council reaffirmed its opposition to any relaxation on height restrictions in Dublin- only last week. This is worryingly short sighted, and does not bode well for the future of Dublin. The Minister is on record as saying Waterford could construct another 24,000 units by 2025- great- however, in a national context- we can't tell anyone who wants to buy a new home to sod off to Waterford and commute where-ever they need to go (I've nothing whatsoever against Waterford, or the Sunny Southeast- I do however despise commuting for several hours a day).

3. Finance- Our lenders have embraced the loosening of requirements for first-time-buyers, and along with the ongoing repairs to their balance sheets- are a lot happier to lend than they have been at almost any time in the last 9 years. Interest rates, although they continue to be at historically low levels, are creeping up- assisted in no small part by the likes of the Fed who have signalled an end to cheap money and most commentators now expect 3 interest rate rises from them next year. The ECB- under whose governance we operate- sent a chill through the market in their own right with their December statement- where they shocked market pundits by heralding a severe curtailing of the quantitative easing programme- cutting the amounts of bonds and securities they are going to purchase on a monthly basis going forward. In an Irish context- it doesn't affect us as much as it might- as there is a limit to the percentage of a sovereign's outstanding debt the ECB can hold- and we're damn near our limits.

4. The Irish Macro economy- is shrugging off the chill effects of Brexit- and of course the impending inauguration of President Trump- and we are predicted to be the fastest growing EU economy, once again, in 2017. Predictions in our growth rates have been cut significantly- however, the predictions in the growth rate of other member states- have been cut even more. Aka- things are getting worse- but not as fast as in other member states.......... At the moment it looks like we may hit an official unemployment rate of 6% in 2017- which is defacto full employment- and is already affecting pay rates in many high demand sectors- unfortunately the construction sector is top of the list- as if we haven't learnt anything from our previous boom and bust scarcely a decade ago.

What do I expect to happen?

Rent control is now in place- however a 4% rise will be the norm- rather than the exception. Expect a court challenge to the Minister in due course.

Property prices in Dublin, Cork, Galway and Limerick- will actually increase in pace again- as it looks like the local authorities are taking very short term positions and the Minister looks set on the historic 'Gateway' Town/City solutions which proved so elusive in the past.

The census data should be formally released in the Spring- which may focus a few minds- particularly on the needs of those counties which act as dormer/commuter counties for Dublin.

First Time Buyers- who imagine they are going to grow massively as a portion of the purchasing population- may be disappointed- and this is despite the relaxation of central bank rules etc.

The Irish market is a mess- and with government interventions its getting messier- rather than more stable.

I'm not even going to predict percentage increases or decreases in property- though I'd welcome other people to do so- along with their thoughts on why they come to their figures.

Have a good year all!

30 people have thanked this post
Slydice Registered User
#2

The_Conductor said:
Rent control is now in place- however a 4% rise will be the norm- rather than the exception.


Have you a link to an official government website which says that 4% is that cap and that it is currently in operation?

Graham ..............
#3

Slydice said:
Have you a link to an official government website which says that 4% is that cap and that it is currently in operation?


There's slightly more to it than a flat 4% cap but here you go:

http://www.oireachtas.ie/viewdoc.asp?DocID=33811&&CatID=59

4 people have thanked this post
Slydice Registered User
#4

Nothing usable there...

Final Stage
(Short Title) Bill 2016 as passed by both Houses of the Oireachtas (in PDF format)

Enacted as Act Number NN of 2016
Date of Signature: DDMMYY
(Short Title Act) 2015 in PDF format
Official Translation

Graham ..............
#5

Slydice said:
Nothing usable there...


You asked for an official government source, read the document 'Planning and Development (Housing) and Residential Tenancies Bill 2016 as passed by Dáil Éireann'

Citizens information have a broad summary here:

http://www.citizensinformation.ie/en/housing/renting_a_home/rent_increases.html

Slydice Registered User
#6

Damn, they don't make it easy to find and then it's sooooo complicated!

anyway...

I assume someone just has to be sent a PDF file and then update that page.

Anyway:
http://www.president.ie/en/media-library/news-releases/statement-from-aras-an-uachtarain-planning-and-development-housing-and-resi

President signs Planning and Development (Housing) and Residential Tenancies Act into law

President Michael D. Higgins has today, 23 December 2016, signed the Planning and Development (Housing) and Residential Tenancies Act 2016 (Act No. 17 of 2016) into law at Áras an Uachtaráin.

and:
http://www.irishstatutebook.ie/eli/acts.html
17 Planning and Development (Housing) and Residential Tenancies Act 2016 - Not yet available


until then, I doubt there's any changes from
which is at your link

This is in it:
Amendment of section 19 (setting of rent above market rent prohibited) of Act of 2004
34.
Section 19 of the Principal Act is amended by inserting the following subsections after
subsection (2):
“(3) The setting of the rent under the tenancy of a dwelling that is carried out on or after the relevant date shall be subject to subsections (4) to (7).

(4) Subject to subsection (5), in setting, at any particular time, the rent under a tenancy of a dwelling in a rent pressure zone, an amount of rent shall not be provided for that is greater than the amount determined by the formula—

R x (1 + 0.04 x t/m)
where—
m is—
(a) 24, where section 24C(1)(a) applies, or
(b) 12, in any other case,

R is the amount of rent last set under a tenancy for the dwelling,
t is the number of months between—

(a) (i) the date the current rent came into effect under a tenancy for the dwelling, or
(ii) where paragraph (a) does not apply but the dwelling was previously let, other than in circumstances to which subsection (5) applies, the date rent became payable under a tenancy for the dwelling as last so let,
and
(b) the date the rent for the tenancy of the dwelling will come into effect after its determination under this subsection.

(5) Subsection (4) does not apply—
(a)where a dwelling has not at any time been the subject of a tenancy during the period of 2 years prior to the date the area is prescribed under section 24A as a rent pressure zone or deemed to be so prescribed;
(b) if, in the period since the rent was last set under a tenancy for the dwelling—
(i) a substantial change in the nature of the accommodation provided under the tenancy occurs, and
(ii) the rent under the tenancy, were it to be set immediately after that change, would, by virtue of that change, be different to what was the market rent for the tenancy at the time the rent was last set under a tenancy for the dwelling.

(6) Where immediately before the relevant date a notice under section 22(2)—
(a) has been served on the tenant, or
(b) the rent review concerned has commenced, then subsections (3) and (4) shall not apply to the new rent, referred to in section 22(2), stated in that notice in accordance with that section.

(7) In this section—
‘relevant date’ means the date section 33 of the Planning and Development (Housing) and Residential Tenancies Act 2016 comes into operation; ‘rent pressure zone’ means an area—
(a) prescribed by the Minister by order under section 24A as a rent pressure zone under that section, or
(b) in respect of an area to which section 24B relates, deemed to be so prescribed by the Minister under section 24A.”


also:
Areas deemed to be rent pressure zones
24B.
With effect from the relevant date (within the meaning of section 19(7)) and notwithstanding anything to the contrary in section 24A, orders under subsection (5) of that section shall be deemed to have been made in respect of the administrative areas of each of the following housing authorities:
(a) Cork City Council;
(b) Dublin City Council;
(c) Dun Laoghaire Rathdown County Council;
(d) Fingal County Council;
(e) South Dublin County Council;
and, accordingly, each of those areas is deemed to be a rent pressure zone from the relevant date for a period of 3 years.

Application of section 20 (frequency with which rent reviews may occur) to
rent pressure zones
24C.
(1) Where a tenancy commenced before the relevant date (within the meaning of section 19(7)) and the area in which the tenancy is situated is in a rent pressure zone (within the meaning of that section), then—
(a) the first rent review after the relevant date shall be carried out in accordance with section 20, and
(b) any subsequent rent review shall be carried out as if subsections (4) to (6) of section 20 had not been enacted.
(2) Where a tenancy commences on or after the relevant date (within the meaning of section 19(7)), and the area in which the tenancy is situated is in a rent pressure zone (within the meaning of that section), then any rent review after that date shall be carried out as if subsections (4) to (6) of section 20 had not been enacted.”.



Graham said:
You asked for an official government source, read the document 'Planning and Development (Housing) and Residential Tenancies Bill 2016 as passed by Dáil Éireann'

Citizens information have a broad summary here:

http://www.citizensinformation.ie/en/housing/renting_a_home/rent_increases.html

Anyone can draw up a bill. If it ain't an act, it ain't the law

2 people have thanked this post
kala85 Registered User
#7

Will interest rates rise and what effect will it have on the property market

utmbuilder Registered User
#8

With a large amount of first time buyers going for "new builds" due to the governments help with the deposit, what will this mean for second hand first time buyer property's. Who will buy this stock that was in the region of 180 to 200k in price.

OfflerCrocGod Registered User
#9

kala85 said:
Will interest rates rise and what effect will it have on the property market
No. The ECB will continue buying bonds for 2017. Inflation is still weak and projected to remain weak in the EU.

Baby01032012 Registered User
#10

utmbuilder said:
With a large amount of first time buyers going for "new builds" due to the governments help with the deposit, what will this mean for second hand first time buyer property's. Who will buy this stock that was in the region of 180 to 200k in price.


Don't see it having any impact. Limited amount of new builds, shortage of properties for sale. Because the deposit cap above 220k has been removed more people will have deposit. I see prices at all levels rising.

1 person has thanked this post
Baby01032012 Registered User
#11

Slydice said:
Damn, they don't make it easy to find and then it's sooooo complicated!

anyway...

I assume someone just has to be sent a PDF file and then update that page.

Anyway:
http://www.president.ie/en/media-library/news-releases/statement-from-aras-an-uachtarain-planning-and-development-housing-and-resi

and:
http://www.irishstatutebook.ie/eli/acts.html


until then, I doubt there's any changes from
which is at your link

This is in it:


also:


Anyone can draw up a bill. If it ain't an act, it ain't the law


It was signed into law by our president befor Christmas...is it not in law...am I missing something.

OfflerCrocGod Registered User
#12

Report from RTE on price moves over the year http://www.rte.ie/news/2017/0103/842302-housing-help-to-buy-scheme/ another 5-10% increase this year seems achievable. About the only advantage to these above inflation increases are households being lifted out of negative equity.

Slydice Registered User
#13

Baby01032012 said:
It was signed into law by our president befor Christmas...is it not in law...am I missing something.


It is law. No-one has uploaded the version of the document which was signed... the Act .. yet. The Bill is probably unchanged so I worked off that instead.

The_Conductor Seriously, don't go there...............
#14

OfflerCrocGod said:
No. The ECB will continue buying bonds for 2017. Inflation is still weak and projected to remain weak in the EU.


The ECB actually shocked the market at its meeting in December- where they severely curtailed the bond buying project- which caught most pundits offguard as no curtailment had been expected.

Its highly unlikely that there will be interest rate rises- but particularly with an election in Germany this year- the ECB will most probably further curtail its market activities.

seamus Dental Plan!
#15

ECB rate rises at this stage would cause problems with the big struggling EU economies like Italy. We might be in a very improving place, but the PIGS are all still very shaky economically. And the EU doesn't need any economic problems right at this moment in time.

ECB rates are going nowhere for 3 years.

1 person has thanked this post

Want to share your thoughts?

Login here to discuss!