Property investors lose out as lenders fail to pass on ECB rate cuts

The_Conductor

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A NUMBER of lenders have decided not to pass on interest rate cuts to their buy-to-let customers in a move that has been described as unfair to property investors.

Building societies Irish Nationwide and Haven/EBS have decided not to pass on recent cuts in the European Central Bank (ECB) rates to property investor customers who have standard variable rate mortgages.

A spokeswoman for EBS confirmed yesterday that the October cut in ECB rates was not passed on to buy-to-let investors. The society is reviewing whether or not to pass on last week's rate cut to investors with standard variable rate mortgages.

Asked why the rate reductions were not being passed on, the spokeswoman said there were "different risks associated with investor mortgages" compared with residential homeloans.

A spokesman for Irish Nationwide confirmed that the October ECB rate cut had not been passed on to investors, while no decision had been made yet on whether to pass on last week's reduction.

One Irish Nationwide investor customer, who has three mortgages with the building society, has hit out at the failure to pass on the cuts. The customer, who did not want to be named, said he was told by Irish Nationwide last week's ECB rate cut would be passed on to buy-to-let mortgage holders but the October rate cut would not.

Mortgage brokers said yesterday the building society's standard variable mortgage rate for investors is 6.49pc, one of the highest for property investor mortgages.

Pressure

Karl Deeter, of Irish Mortgage Brokers, said banks and building societies were failing to pass on rate cuts to investors as they were able to get away with it. "Basically, the banks and building societies won't give investors any breaks because there is no political pressure to do so."

He accused lenders of making fat profits on buy-to-let mortgages.

"The margins on a loan at 6.35pc are an impressive 3.1pc over the ECB. That's almost a 100pc mark-up, even taking interbank rates into consideration (4.4pc)."

He added that most lenders will only do investment properties at loan to value of 50pc or less which meant that most investors were unable to switch to another lender. "Switching in the investor market is all but impossible in the current environment, and that's not credit crunch alone. That's due to bank lending policy becoming so restrictive," he added.

Iago

I can't say I'm not happy about this. Buy to let purchasers are one of the major causes of the ridiculous house pricing issues we've had over the last few years.

I'm not feeling any sympathy, because lets face it, even if the rate cuts were passed on none of these people would reduce the rents they are charging their tenants.

So ultimately they can cry all they want about "banks maximising their profits" because that's all these investors are looking to do with the cuts anyway.

amos13

actually my parents have two buy-to-let properties, which they have been renting out at below the mortgage repayments since they bought them (like a lot of landlords, considering the banks wasted no time in putting the rates UP each time the ECB did). They bought the houses as a pension insurance. now that their actual pension has all but been wiped out, and the value of the properties is below what they paid for them, and they're still paying out more on the mortgage than rent, why the hell shouldn't the rates be passed on? They pay their taxes that have guarenteed these banks, and they have never defaulted on a payment. They are not "crying" over this, but it is highly unfair, unethical, uncompetitive and is contradictory to the reason for the ECB cuts, putting money back into the peoples pockets, rather than the fat cat banks.

Ste.phen

I imagine BTL mortgages are one of the most risky type of mortgage for a bank (and indeed the investors) and if they're expecting a high default rate on the mortgages they need to keep the rate fairly high so they have decent cashflow.

Not saying it's good for prople like amos' parents, but it definitely makes sense from the bank's point of view. If people aren't on tracker mortgages, there should be no automatic expectation of the rate lowering. The bank didn't have the lower rate when they coughed up the cash for the mortgage, so why should they drop it now?*


* - I'm not actually sure if this is how it works, do the banks finance with their upstream lenders on a tracker rate?

bangersandmash

Iago wrote: »

I'm not feeling any sympathy, because lets face it, even if the rate cuts were passed on none of these people would reduce the rents they are charging their tenants.

Not sure there's any evidence for your assumption that none will reduce rents. A rate cut would give many landlords who bought recently more leeway in reducing their rent, at least giving some renters an even better shot at haggling over rent. Some landlords might refuse the pass on the cut. But those who recognise the dire state of the rental market will take the opportunity to undercut them.

What irritates me more is that banks are slow to pass on ECB rate cuts on mortgages but incredible efficient when it comes to slashing interest rates on savings accounts. Remember it's your patriotic duty to spend money. Saving is just plain irresponsible :rolleyes:

ronbyrne2005

BTL investors had it easy for ages so no sympathy. the had favourable tax treatment of interest relief, PRSAs, section 23, section 50, low property taxes, little tenant rights etc.

jimmycrackcorm

ronbyrne2005 wrote: »

BTL investors had it easy for ages so no sympathy. the had favourable tax treatment of interest relief, PRSAs, section 23, section 50, low property taxes, little tenant rights etc.

+1. Property investors were a key contributer to the astronomical rising house prices. I was only able to purchase my house once the bacon report was implemented ten years ago to allow FTBs' a chance to buy.

jimmycrackcorm

amos13 wrote: »

actually my parents have two buy-to-let properties, which they have been renting out at below the mortgage repayments since they bought them (like a lot of landlords, considering the banks wasted no time in putting the rates UP each time the ECB did). They bought the houses as a pension insurance. now that their actual pension has all but been wiped out, and the value of the properties is below what they paid for them, and they're still paying out more on the mortgage than rent, why the hell shouldn't the rates be passed on? .

From the banks perspective you parents have 3 times a mortgage debt risk (assuming they have their own house mortgaged also) than a single residential mortgage owner has.

Calina

amos13 wrote: »

actually my parents have two buy-to-let properties, which they have been renting out at below the mortgage repayments since they bought them (like a lot of landlords, considering the banks wasted no time in putting the rates UP each time the ECB did). They bought the houses as a pension insurance. now that their actual pension has all but been wiped out, and the value of the properties is below what they paid for them, and they're still paying out more on the mortgage than rent, why the hell shouldn't the rates be passed on? They pay their taxes that have guarenteed these banks, and they have never defaulted on a payment. They are not "crying" over this, but it is highly unfair, unethical, uncompetitive and is contradictory to the reason for the ECB cuts, putting money back into the peoples pockets, rather than the fat cat banks.

While I have sympathy for their position, what concerns me is that they went into this already subsidising rent. Personally speaking I do not understand why it was considered good business to subsidise rent (guaranteed cashflow out) in the hope of capital appreciation (not guaranteed cash in).

I realise they are in a difficult position now but from the point of view of pension planning this was not wise practice. Interest rates are way on the low side of average so the comparative costs were likely to go up unless inflation went way out of control. As someone who has more savings than debt it'll be a cold day in hell before I think that's a good thing. Most people don't like inflation on their day to day living costs.

I understand that banks will assess default risks differently. BTL is probably at a higher risk of default in general than people who are trying to hold onto their homes. In your parents position, dependent on how far from retirement they are, and what the current nominal loss on the properties are, I would be looking very carefully not at the interest rate, but the overall cost of the properties.

amos13

I dont agree that BTL owners pushed up the house prices - for two reasons
1. due to the increase in population over the last ten years, both from irish people returning who had previously emigrated and from immgrants (who at this stage last year accounted for 10 % of the population, thats approx 400,000), there was a massive surge in demand for houses. most immgrants prefer to rent, as they may return home, so BTL owners were merely providing a service to these people.

2. BTL owners do not themselves drive demand for the above reason nor do they set the prices - they have to pay the high prices just like you or me, it is the developers who made the massive markups on the value of houses. The demand and therefore the prices would still be high if the immigrants were purchasing the houses and there was no letting at all.

On another point, referring to it being foolish to speculatively purchase a house hoping for a capital gain, people who purchased BTL houses in the past three years were not being foolish, firstly because of the upward trend in house values for the past 20-30 years (although accelerated in the last ten) gave a reasonable basis for the assumption that they would continue that way for the forseeable future, and also because it is deemed a safer speculative option than other investments options, for example buying shares, a lot of which are only worth about 10 % of the value they were at last year.most economists also agree that within 5 years the houses prices will be back to the original upward trend, and what we are seeing at the moment is only a temporary adjustment in the market.

Lastly, there are strict regulations in place for landlords to keep safe living conditions in their houses, and, unless the house in question was built 15 + years ago, I don't see many houses around that are structurally unsound, and if they are, this is the fault of the developer surely, not the landlord?

amos13

ronbyrne2005 wrote: »

BTL investors had it easy for ages so no sympathy. the had favourable tax treatment of interest relief, PRSAs, section 23, section 50, low property taxes, little tenant rights etc.

Oh and on the above "favourable tax treament" - these are limited to very few landlords and under very strict conditions. most, including my parents, received no tax relief, definately no interest relief, which I thought and I could be wrong here, only applies to first time buyers? as far as low property taxes, they've to pay the same rate of stamp duty as everyone else but they also have to pay a capital gains tax on any profit they make on the sale, unlike owner-occupiers. section 50 relief is only for colleges and the small areas surrounding the college. section 23 is only selected properties in rundown areas the government wanted to develop. so again, the vast majority of landlords cannot avail of these reliefs.

Ste.phen

Is the mortgage interest considered an expense when calculating the tax owed on the rental income?

Calina

amos13 wrote: »

I dont agree that BTL owners pushed up the house prices - for two reasons
1. due to the increase in population over the last ten years, both from irish people returning who had previously emigrated and from immgrants (who at this stage last year accounted for 10 % of the population, thats approx 400,000), there was a massive surge in demand for houses. most immgrants prefer to rent, as they may return home, so BTL owners were merely providing a service to these people.

2. BTL owners do not themselves drive demand for the above reason nor do they set the prices - they have to pay the high prices just like you or me, it is the developers who made the massive markups on the value of houses. The demand and therefore the prices would still be high if the immigrants were purchasing the houses and there was no letting at all.

On another point, referring to it being foolish to speculatively purchase a house hoping for a capital gain, people who purchased BTL houses in the past three years were not being foolish, firstly because of the upward trend in house values for the past 20-30 years (although accelerated in the last ten) gave a reasonable basis for the assumption that they would continue that way for the forseeable future, and also because it is deemed a safer speculative option than other investments options, for example buying shares, a lot of which are only worth about 10 % of the value they were at last year.most economists also agree that within 5 years the houses prices will be back to the original upward trend, and what we are seeing at the moment is only a temporary adjustment in the market.

Lastly, there are strict regulations in place for landlords to keep safe living conditions in their houses, and, unless the house in question was built 15 + years ago, I don't see many houses around that are structurally unsound, and if they are, this is the fault of the developer surely, not the landlord?

In 2006, 40% of new houses went to investors so it is disingenuous to say that BTL did not push up demand. In the last year of the boom, they accounted for 40% of new property purchases to the detriment of FTBs.

House prices in Ireland peaked in 2006, and they have only been going south in the meantime. Additionally, average houseprices reached a multiple of 10 times average salaries. This was not sustainable so anyone who was buying in the past 3 years ago should have done more research. It is not wise to buy investment property at the top of the market and the top of the market had to be close at that stage. The most reasonable assumption in the last 3 years was that property prices rises were unsustainable, not that the rises would continue.

amos13

Calina wrote: »

In 2006, 40% of new houses went to investors so it is disingenuous to say that BTL did not push up demand. In the last year of the boom, they accounted for 40% of new property purchases to the detriment of FTBs.

House prices in Ireland peaked in 2006, and they have only been going south in the meantime. Additionally, average houseprices reached a multiple of 10 times average salaries. This was not sustainable so anyone who was buying in the past 3 years ago should have done more research. It is not wise to buy investment property at the top of the market and the top of the market had to be close at that stage. The most reasonable assumption in the last 3 years was that property prices rises were unsustainable, not that the rises would continue.

Again, BTL buyers would not have bought 40% of the houses on sale if there had not ALREADY been a demand for the houses in question - that would be unsustainable. And yes, the markets peaked, but houses are not short term assets such as cars etc, they are long term fixed assets with useful lives of potentially 25-50 years. It is "disingenuous" to infer that the prices will never again raise back to the original cost price, or that they will not indeed yield a future profit. bear in mind a 3 bed semi detached in Meath cost only 35k 15 years ago. The same house is now worth ten times that. There will always be an impact of inflation, even if it isn't to the same extent.

As for deductable interest on the taxable rental income, yes it is treated as an expense, I'm sorry I thought the previous blogger was talking of TRS. The mortgage itself is not deductable, so if your making a loss on the rental V mortgage payments, you still pay tax on the full income, less any allowable expenses.

gurramok

Most landlords do get mortgage interest relief written off. This is one reason banks were throwing mortgages at this segment to the detriment of house-to-live-in buyers hence the latter could not compete whilst BTL's drove up the prices.

Zero sympathy. Its an investment with which parts can be written off against tax(mortgage interest relief, that new furniture, fridge etc) and as we know investments can go up as well as down.

amos13 wrote:

Again, BTL buyers would not have bought 40% of the houses on sale if there had not ALREADY been a demand for the houses in question - that would be unsustainable. And yes, the markets peaked, but houses are not short term assets such as cars etc, they are long term fixed assets with useful lives of potentially 25-50 years. It is "disingenuous" to infer that the prices will never again raise back to the original cost price, or that they will not indeed yield a future profit. bear in mind a 3 bed semi detached in Meath cost only 35k 15 years ago. The same house is now worth ten times that. There will always be an impact of inflation, even if it isn't to the same extent.

Hence lots of BTL's are subsidising their investment for alot of those prospective 25-50yrs to get a return. 2006 buyers are involved in a heavily loss making venture which is raping them year on year financially.

Wait until the interest goes down substantially after 5-10yrs, it just gets worse financially for them as that tax write off of mortgage interest will dwindle big time.

amos13

gurramok wrote: »

Most landlords do get mortgage interest relief written off. This is one reason banks were throwing mortgages at this segment to the detriment of house-to-live-in buyers hence the latter could not compete whilst BTL's drove up the prices.

Zero sympathy. Its an investment with which parts can be written off against tax(mortgage interest relief, that new furniture, fridge etc) and as we know investments can go up as well as down.



Hence lots of BTL's are subsidising their investment for alot of those prospective 25-50yrs to get a return. 2006 buyers are involved in a heavily loss making venture which is raping them year on year financially.

Wait until the interest goes down substantially after 5-10yrs, it just gets worse financially for them as that tax write off of mortgage interest will dwindle big time.

Not true. Your not taking account of the time value of money and assuming that rent rates will stay the same over the 25-50 year period. Rent, just like everything else affected by inflation, will invariably go up over time and landlords will price to the market rate for their respective localities. mortgages, however, will only vary by the interest rates (capital amounts will only reduce, reducing the interest owable on them) which will fluctuate but will average out at 5-6%, unless things go extremely pearshaped!

But asides from this, can someone explain to me in no uncertain terms why there is so much negativity towards landlords, simply for making an investment? (I'm not going to get into the "they pushed the prices up" argument again, anyone who has any idea of the concept of economics and the supply/demand model will know this isn't true, or else refer to the above comments)
Landlords are simply providing a service. people who can't afford / don't want to buy, still need places to live. If there were no landlords, where would all the students in dublin, cork, sligo etc go? where would all the immigrants live? are these people expected to live on the streets? most landlords are not overcharging the tenants - they are barely covering the mortgages, so its (rarely) for greed. Its an investment, similar to any other, speculative and risky like any other, and yet there seems to be some sort of unwarranted loathing towards them.

and if interest rates were actualy passed on rather than being held back by the banks, then possibly landlords would pass this on in rents. At the moment, they have no choice in the matter at all.

Calina

1) You are not taking account of inflation when you are talking about property rises. Historically, property tracks inflation on average. For the past 10 years, however, property in Ireland far outstripped inflation and inflation here was comparatively high. To turn a profit on a property, you will have to add original price plus interest plus running costs together and take account of inflation. You are not doing this and nor are you recognising that there will be a return to mean which means quite a lot of property deflation over the coming years.

2) there is negativity towards landlords because a number of tenants in this country - myself included - have experience of landlords who are extremely hot on their rights and not so hot at all on their obligations under a) the leases they insisted on signing or b) prevailing legislation. In Ireland, landlords can be a right nightmare to deal with between refusing to return deposits and issuing invalid notice and above all else, visiting properties without prior arrangement or agreement. The service many landlords in Ireland supply is short of what is normal in other civilised countries in other words.

3) BTL bought 40% of new builds. Not all of them ever even got to be rented - the census revealed a large level of unoccupied property nationally. They bought them because of the demand for capital appreciation and because flipping houses allowed them to make profits. At the same time, rents were static of falling and this at a time of unprecedented immigration into the country. In short, rental supply with the exception of a short period around Jan 2007 has generally outstripped rental demand and the population is now falling, not rising.

TwoShedsJackson

No sympathy whatsoever.

amos13

Calina wrote: »

1) You are not taking account of inflation when you are talking about property rises. Historically, property tracks inflation on average. For the past 10 years, however, property in Ireland far outstripped inflation and inflation here was comparatively high. To turn a profit on a property, you will have to add original price plus interest plus running costs together and take account of inflation. You are not doing this and nor are you recognising that there will be a return to mean which means quite a lot of property deflation over the coming years.

2) there is negativity towards landlords because a number of tenants in this country - myself included - have experience of landlords who are extremely hot on their rights and not so hot at all on their obligations under a) the leases they insisted on signing or b) prevailing legislation. In Ireland, landlords can be a right nightmare to deal with between refusing to return deposits and issuing invalid notice and above all else, visiting properties without prior arrangement or agreement. The service many landlords in Ireland supply is short of what is normal in other civilised countries in other words.

3) BTL bought 40% of new builds. Not all of them ever even got to be rented - the census revealed a large level of unoccupied property nationally. They bought them because of the demand for capital appreciation and because flipping houses allowed them to make profits. At the same time, rents were static of falling and this at a time of unprecedented immigration into the country. In short, rental supply with the exception of a short period around Jan 2007 has generally outstripped rental demand and the population is now falling, not rising.

1) I have taken account of inflation. If the proprty prices reflect inflation for the next ten years, then trust me, 2-5% appreciation on houses currently of 300k value will more than cover expenses. so long as rent is close to repayments, even if landlords are making a slight loss, this looks after interest

2) I've lived in three rented accomodations myself. two landlords were great and 1 was a bas**d. don't tar them all. deposits are not returned if you have caused damage to the property or have spoiled items such as carpets. This is all in your contract. tenants don't exactly look after rented houses the way they'd look after their own, especially students. They do have to give notice to visit for an inspection. landlords are entitled to call to your door whenever they want, there isn't some sort of restraining order put on them!!! but you have to allow them into your house. if he turns up and you let him in, thats your fault.

3) supply only outstripped demand in the last year, since houseprices started falling, and before it was realised there would be a housing surplus. If thousands of houses had been left empty like that over the past ten years developers would have gone out of business. they're only starting to go out of business the last few months. its directly related.

Calina

amos13 wrote: »

1) I have taken account of inflation. If the proprty prices reflect inflation for the next ten years, then trust me, 2-5% appreciation on houses currently of 300k value will more than cover expenses. so long as rent is close to repayments, even if landlords are making a slight loss, this looks after interest

But you haven't taken account of deflation which we are currently enjoying. Depending on whose set of figures you believe, property is down anywhere between 20 and 30% since the top of the market in 2006, nominally. Those losses have to be made up first.

amos13 wrote: »

2) I've lived in three rented accomodations myself. two landlords were great and 1 was a bas**d. don't tar them all. deposits are not returned if you have caused damage to the property or have spoiled items such as carpets. This is all in your contract. tenants don't exactly look after rented houses the way they'd look after their own, especially students. They do have to give notice to visit for an inspection. landlords are entitled to call to your door whenever they want, there isn't some sort of restraining order put on them!!! but you have to allow them into your house. if he turns up and you let him in, thats your fault.

If I am not there, it's hard to stop him, sorry. I've lived in a lot of accommodation here in teh last 10 years. Some are good but they are unusual. The PRTB is full of judgments against landlords and this forum is full of tenants complaining about problem landlords. I've also lived in rental accommodation in several other European countries where the rental market is made up of mature participants. Your comments about tenants not looking after rented houses are in my experience incorrect.

amos13 wrote: »

3) supply only outstripped demand in the last year, since houseprices started falling, and before it was realised there would be a housing surplus. If thousands of houses had been left empty like that over the past ten years developers would have gone out of business. they're only starting to go out of business the last few months. its directly related.

Rents fell nominally from 2001 to 2007. This does not imply a shortage of supply but a shortage of demand. Developers didn't go bust because investors were buying them and they were the ones who had problems/decisions not to rent. Once the property is sold, the developer has no interest in its function. Do you not understand this?

amos13

Calina wrote: »

But you haven't taken account of deflation which we are currently enjoying. Depending on whose set of figures you believe, property is down anywhere between 20 and 30% since the top of the market in 2006, nominally. Those losses have to be made up first.



If I am not there, it's hard to stop him, sorry. I've lived in a lot of accommodation here in teh last 10 years. Some are good but they are unusual. The PRTB is full of judgments against landlords and this forum is full of tenants complaining about problem landlords. I've also lived in rental accommodation in several other European countries where the rental market is made up of mature participants. Your comments about tenants not looking after rented houses are in my experience incorrect.



Rents fell nominally from 2001 to 2007. This does not imply a shortage of supply but a shortage of demand. Developers didn't go bust because investors were buying them and they were the ones who had problems/decisions not to rent. Once the property is sold, the developer has no interest in its function. Do you not understand this?

Of course the losses have to be made up first. You don't think that over the useful life of the house, the loss won't be recovered? the losses will be recovered in the much shorter term. this may not begin to happen until the recession is over but the recession is not going to last 25+ years! And we do not have deflation, we have a decrease in inflation, they are two different things.

I've never heard of a landlord entering the house when the tenant isn't there, so you were very unlucky. its never happened to me, any f my friends, and the landlords I know wouldn't do it. you could actually have reported him for that. if you didn't, then you didn't use your tenant rights. And by your experience, do you mean YOU have looked after the house? because you obviously don't have tenants so your experience would be limited. My parents have had 9 different sets of tenants in their two properties. They have had to replace a large item of furniture or other necessity each time they moved out. thats 100% of the time. And I have to admit I am also guilty of it. as are just about all my friends who have rented and brought parties of people back most saturday nights.

Again, your talking about rent falling nominally, ie, in relation to inflation. possibly true, I don't know where them figures come from. but a drop in rental demand would mean a higher default rate over the period and related to that wuld be a drop in BTL demand, which would affect developers. That did not happen, until recently. Do YOU not understand THIS? And the mere notion that there was a reduction in demand considering the massive increase in population is, to be honest, laughable. where did all the new people live? are they on the streets or something?

SimpleSam06

amos13 wrote: »

deposits are not returned if you have caused damage to the property or have spoiled items such as carpets.

Landlords are not entitled to keep the full deposit unless damages equal or exceed the deposit. For lesser amounts they can take the cost of the damages from the deposit, and must return the rest.

I recall I went to look at a place about two years ago, and the clown asked me if I had damaged the skirting board while I was inspecting the rental property! Another yahoo wanted me to act as a porter for another tenant moving into an apartment complex, again while I was taking a first look at a rental accommodation. Unbelievable.

ShatterProof

TwoShedsJackson wrote: »

No sympathy whatsoever.

Exactly.

Why have sympathy for somebody who bought a house and expected somebody to pay the mortgage for them.

Calina

amos13 wrote: »

Of course the losses have to be made up first. You don't think that over the useful life of the house, the loss won't be recovered? the losses will be recovered in the much shorter term. this may not begin to happen until the recession is over but the recession is not going to last 25+ years! And we do not have deflation, we have a decrease in inflation, they are two different things.

We have property price deflation. Do you understand what this means? It means that property prices are falling. I'll also add that in Japan, property prices did not recover in the short term and in the UK, many areas took 10 years to recover nominal prices after their last crash. So frankly, I actually don't know if the loss will be recovered in the much shorter term but I have serious doubts. The key isssue is recovery over the term of the mortgage, by the way, not useful life of the house. The house might be useful for 200 years but show me anyone who lives that long.

As for what will happen the recession, no one is absolutely sure but I as sure as hell would not want to be borrowing 8 to 10 times my salary to buy property and I can't see the banks beign as profligate for a long time as they were up to 2006.

amos13 wrote: »

I've never heard of a landlord entering the house when the tenant isn't there, so you were very unlucky. its never happened to me, any f my friends, and the landlords I know wouldn't do it. you could actually have reported him for that. if you didn't, then you didn't use your tenant rights. And by your experience, do you mean YOU have looked after the house? because you obviously don't have tenants so your experience would be limited. My parents have had 9 different sets of tenants in their two properties. They have had to replace a large item of furniture or other necessity each time they moved out. thats 100% of the time. And I have to admit I am also guilty of it. as are just about all my friends who have rented and brought parties of people back most saturday nights.

Then your parents were unlucky. I have never caused damage in a house I have lived in, and I have always had my deposit returned. However I know a lot of people who have had serious issues on this front and my own problems relate to notice and visiting rights.

amos13 wrote: »

Again, your talking about rent falling nominally, ie, in relation to inflation. possibly true, I don't know where them figures come from. but a drop in rental demand would mean a higher default rate over the period and related to that wuld be a drop in BTL demand, which would affect developers. That did not happen, until recently. Do YOU not understand THIS? And the mere notion that there was a reduction in demand considering the massive increase in population is, to be honest, laughable. where did all the new people live? are they on the streets or something?

The figures come from Daft, as it happens. I think you haven't got a single clue what you are talking about. Rental supply outstripped rental demand except for a brief period around Jan 2007 when supply moved from the rental to the sales market.

The issue is that supply ballooned at the time, far faster than demand ballooned, even during a period of record immigration. Hence rents remained static or falling even while property sales prices went into the stratosphere. I don't think you understand this.

amos13

Calina wrote: »

We have property price deflation. Do you understand what this means? It means that property prices are falling. I'll also add that in Japan, property prices did not recover in the short term and in the UK, many areas took 10 years to recover nominal prices after their last crash. So frankly, I actually don't know if the loss will be recovered in the much shorter term but I have serious doubts. The key isssue is recovery over the term of the mortgage, by the way, not useful life of the house. The house might be useful for 200 years but show me anyone who lives that long.

As for what will happen the recession, no one is absolutely sure but I as sure as hell would not want to be borrowing 8 to 10 times my salary to buy property and I can't see the banks beign as profligate for a long time as they were up to 2006.



Then your parents were unlucky. I have never caused damage in a house I have lived in, and I have always had my deposit returned. However I know a lot of people who have had serious issues on this front and my own problems relate to notice and visiting rights.



The figures come from Daft, as it happens. I think you haven't got a single clue what you are talking about. Rental supply outstripped rental demand except for a brief period around Jan 2007 when supply moved from the rental to the sales market.

The issue is that supply ballooned at the time, far faster than demand ballooned, even during a period of record immigration. Hence rents remained static or falling even while property sales prices went into the stratosphere. I don't think you understand this.

To be honest, I am not going to deal with you any more. and its not because of your views or because I don't know what I'm talking about, but rather because you can't seem to have a topical debate without consistently being obnoxious and inferring I'm stupid. I happen to know what I'm talking about, being in the property market, the occupation I am in, and the people I am surrounded by. And my capacity for understanding goes beyond what I read in the papers, unlike yourself. so good luck.

The_Conductor

Behave people.
If you disagree with what someone else posts- refute the post- do not attack the poster.

Anyone who ignores this will earn themselves some cooling off period without the rights to post in this forum.

Regards,

SMcCarrick

ronbyrne2005

amos13 wrote: »

To be honest, I am not going to deal with you any more. and its not because of your views or because I don't know what I'm talking about, but rather because you can't seem to have a topical debate without consistently being obnoxious and inferring I'm stupid. I happen to know what I'm talking about, being in the property market, the occupation I am in, and the people I am surrounded by. And my capacity for understanding goes beyond what I read in the papers, unlike yourself. so good luck.

Ha Ha, take your ball and leave the pitch. Your problem is you are stuck in the "property is your only man" minset/culture, it was "your only man" for past 15 years but it wont be for a long time again. Your thinking is clearly biased by your environment and those in it.

amos13

ronbyrne2005 wrote: »

Ha Ha, take your ball and leave the pitch. Your problem is you are stuck in the "property is your only man" minset/culture, it was "your only man" for past 15 years but it wont be for a long time again. Your thinking is clearly biased by your environment and those in it.

I took the ball and left the field as you call it as I won't be dragged into a personal slanging match. I could refute eveything that has been said, and I had it all written out, but I wouldn't accept those insults in a face to face debate, so I won't on this forum. My thinking is biased by what I have studied in uni and what I work at. I actually have a knowledge of the industry. Irish people have always, and will always, want to own their own house and land. Its in the Irish psyche, unlike places such as France and to a lesser extent England where people are content to rent for their whole lives. and thats why houses will continue to sell. Once the banks begin to lend again of course. the economic downturn won't last forever, and thats what some people on this forum don't seem to understand.

Calina

If Irish people all want to buy their own homes, tell me who the BTL were supposed to be renting to? Oh - right - the immigrants. The immigrants who came to Ireland and de facto rented the houses for which they were building additional capacity.

I've lived in a lot of places. I've dealt with the rental market in a lot of places. I will give you that Irish people wnat their own homes. What you need to understand is that courtesy of rising unemplyment, specifically in the construction industry where employment figures are in deep deep trouble at the moment, and tightening credit criteria (eg 20% deposit on apartments), the amount of money available to buy property is contracting big time.

Put simply, the number of people willing to buy starter apartments of 1 and 2 bedrooms has dwindled to nothing because the fall off in capital appreciation makes the trade up property ladder route very unattractive, and the number of people with 10 times their salary to splash on average houses in Dublin suburbs is limited in the FTB market. Both sales and rental inventory are way up now on what they were 24 months ago. All this put together do not point to a recovery in property prices in the short term, even allowing for historically (again) low interest rates. There is an aspect of sentiment to all this, and the sentiment which was there 2 years ago is go.

Add to that immigration is falling off, and in fact, we are starting to see rising emigration rates also. Even with all the people renting who might have bought 2 years ago, rents are on the way down. Property prices in Ireland, despite contracting by something like 20-30% if you can even get a sale - and sales volume appears to be way down (I'm making this assessment based on the fact that inventory is rising and estate agents are laying off staff), are still out of kilter with basic fundamentals, eg salary multiples, rental ratios and sales supply levels which are extremely high compared to rates over the last 10 years.

Nothing you have said addresses any of these points.

SimpleSam06

amos13 wrote: »

I actually have a knowledge of the industry. Irish people have always, and will always, want to own their own house and land. Its in the Irish psyche, unlike places such as France and to a lesser extent England where people are content to rent for their whole lives.

Eh for someone with such a knowledge of the industry, its odd that you don't realise that rental protections in places like France and Germany are far stronger than in Ireland, so it is possible to be a lifelong renter. The legislation and protection in Ireland is a fairly 19th century affair, so anyone that wants to start a family needs to buy. Its got nothing to do with some "Irish psyche".

ntlbell

amos13 wrote: »

To be honest, I am not going to deal with you any more. and its not because of your views or because I don't know what I'm talking about, but rather because you can't seem to have a topical debate without consistently being obnoxious and inferring I'm stupid. I happen to know what I'm talking about, being in the property market, the occupation I am in, and the people I am surrounded by. And my capacity for understanding goes beyond what I read in the papers, unlike yourself. so good luck.

"To be honest" Calina in IMO is one of the most informed impartial poster on this particular forum. Comical Austin should know what he's talking about considering his profession and the people that surrounds him but he's one of the most clueless people on the subject.

The points you have made and your obvious lack of understanding of the market would prove otherwise, but feel free to take your ball and go home if you're not up to the challenge of a mature debate on the topic.

Blackjack

Calina wrote: »

In 2006, 40% of new houses went to investors

Calina wrote: »

In the last year of the boom, they accounted for 40% of new property purchases to the detriment of FTBs.

amos13 wrote: »

(I'm not going to get into the "they pushed the prices up" argument again, anyone who has any idea of the concept of economics and the supply/demand model will know this isn't true, or else refer to the above comments).

Amos, are you trying to suggest that the demand of 40% of new properties by the investor sector had no upward influence on price whatsoever?.

Please do explain further.

Duckjob

Blackjack wrote: »

Amos, are you trying to suggest that the demand of 40% of new properties by the investor sector had no upward influence on price whatsoever?.

Please do explain further.

He won't, he stomped off in a huff :P

Dandelion6

SimpleSam06 wrote: »

Its got nothing to do with some "Irish psyche".

I think it does. From an immigrant perspective I'm amazed at how often I hear "rent is dead money". It's like a mantra for Irish people. I've never heard this said so often in other countries I've lived in.

The lack of rental protections is obviously an issue, but things are even worse in for example parts of the US and people still don't have the obsession with owning property that you have here.

The_Conductor

Dandelion6 wrote: »

I think it does. From an immigrant perspective I'm amazed at how often I hear "rent is dead money". It's like a mantra for Irish people. I've never heard this said so often in other countries I've lived in.

The lack of rental protections is obviously an issue, but things are even worse in for example parts of the US and people still don't have the obsession with owning property that you have here.

I'd be inclined to agree- even on this forum there are die hard believers in this. Trying to logically show them how landlords in some properties were subsidising their accommodation- and how by renting it afforded them a much higher standard of living than they would otherwise be able to afford- is a loosing battle. Its all a case of- "but I'll own the property in 40 years time"- totally ignoring all other factors- and also ignoring the fact that so what, you own the property in 40 years time- where are you then? There are no pockets in a shroud....... With the proposed reforms of death duties I'm not so sure its even a good idea to own a property outright in 40 years time..... You may have spent your life working for the taxman........

amos13

back again.

sorry didn't mean to storm off in a huff, just had other things to do....it is the weekend and all

all points above clearly taken, and well made, but I still believe the property market will recover. strictly speaking I wouldnt be over confident in the Dublin property market, because prices in Dublin have been over inflated way beyond that of the rest of the country (which I agree has also been overinflated also). strict credit criteria will loosen again in a few years once the banks regain sufficient liquidity. remember the banks make money from lending it. but also, the average industrial wage last year was 32-35k, and the average price for a 3 bed semi was 300-350k. if single people were buying houses then yes, people would be getting mortgages ten times their wages, but I don't know anyone personally who bought a house themselves, its mostly couples or friends buying together, so this divides the debt. And I stand by my argument about the irish psyche, as posted above, I was constantly told by many friends while I was renting that it was dead money. And mortages also rarely last their full term of 35-40 years, as salaries go up over time, people tend to pay off more to reduce interest and pay it off earlier. Irish people don't want to be paying rent when they are retired. Also, housing booms have a trend of following periods of high unemployment when a country gets back on its feet, its a sense of "we didn't have any assets for so long, time to get them now we can".

amos13

Blackjack wrote: »

Amos, are you trying to suggest that the demand of 40% of new properties by the investor sector had no upward influence on price whatsoever?.

Please do explain further.

sorry just read this. yes they had an influence, I'm not saying they had none whatsoever. what I'm saying is that there was already a demand there. even if the demand was say, 30-35% of the 40%, there was still a significant demand for rentals, its a chain - demand for accomodation leads to demand for landlords to provide it leads to demand for builders to build. is this not true?

I've also just read the daft report that was mtnioned earlier saying that the rentals dropped over the last few years...and according to the national rent index, which is adjusted for inflation, it actually increased month on month from 2003. there was a lag in late 2003 but then it picked up again drastically. The writer of the report himself said
Everyone renting in Ireland will feel relief from the familiar pressure of ever-increasing rents.

This doesn't sound like the rents were stagnant or decreasing at all! He goes on to say

If our housing boom-and-bust cycle is comparable to our European neighbours, then we can expect it to take a minimum of 3-5 years for the market to recover


If you would like to read for yourself, here is the link http://www.daft.ie/report/Daft-Rental-Report-Q3-2008.pdf

So to conclude, the very site you referred to in your argument is supporting mine.

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Calina

When I came back to Ireland in 1999, renting could be construed as dead money. The cost of renting was beyond the cost of purchase, even for a single person, so it was a nobrainer to buy.

The issue in Ireland is not so much that people want their own homes, but that property was also seen as a get rich scheme. This is why I constantly highlight the investment property issue particularly with respect to 2006.

However, in the current circumstances, when you see people seeing 100K haircuts on entry level apartments depending on when they bought...and yes that is happening where I live...you will find a certain amount of revulsion. The refrain I am hearing most often now is not "rent is dead money" but "you are lucky...you are so flexible". From homeowners.

I think you need to understand that the property market is a lot more nuanced than you give it credit for. Psyches can change; I think that's happening. Part of the buy buy psyche in Ireland is linked to poor tenancy legislation and a monumental lack of trust between market participants in the rental market. #

You're making a number of worrying assumptions however.

1) We have rising unemployment at the moment. Forecasts suggest that this could hit 12% by 2010. I am hopeful that it won't, but during 2009, for every one woman made unemployed, eight men last their jobs. This is a worrying demographic split from a social point of view. It's also worrying because traditionally the ones who HAVE to take time off to have children are women. As a result, it's not good to be relying on women per se to pay mortgages particularly if a disproportionate number of men are unemployed.

2) That latter point is a key argument against assuming that there will always be two incomes to pay off a mortgage

3) Salary inflation has happened in the past; it's not guaranteed into the future and because of the nature of the employment market in Ireland right now - ie very little - and globalisation and offshoring of many service jobs which are not, in any case, all that highly paid, it's unwise to rely on it. I am aware that there is anecdotal evidence that banks took prospective salary inflation into consideration for certain professions; I do not think it was wise given that one of those professions is starting to lay off qualified newbies.

4) the reason, for the most part, that people didn't buy on their own is because a single salary cannot, at this point in time, fund a property alone. This did not used to be the case; and it should not be the case as it puts an unnecessary strain on family finances. It's also worth noting that interest rates are historically low and their long term trend is up. In the past, interest rates have been historically high on low principles, and their trend was down. I would prefer the latter because the former does not necessarily mean that salary inflation will leave you better off, particularly if interest rates are rising. Ask anyone on an interest only mortgage what the last 18 months were like while rates were going up rather than down to get a feel for the impact that would have.

I see no reason why property prices in Ireland won't recover at some point in the future; the problem as I see it, they won't start recovering until they hit bottom and I don't believe they are anywhere close to that for the time being. I suspect that because of the property ladder scenario in Dublin being particularly common, certain property types there will take a hammering for a while to come...outside Dublin, I think anywhere with a lot of non-locally owned/occupied property, eg parts of Leitrim and Donegal, and Roscommon, are heading for a hard time.

The_Conductor

The one thing I would say- is that First Time Buyers have consistently been below 25% (and at the peak of the market in 2006, as low as 17.2%) of the market for approved mortgages. The vast majority of construction in the previous 6 years has been aimed squarely at the FTB market- with very little in the "trader-upper" category. Even with the fall in construction- that which is still being constructed, is primarily ye 1-3 bed apartment with no garden.

Aside from anything else- most people who purchased in the last 10 years, did not do so on the basis that it was where they intended to stay longterm. Most people hanker after their 3 bed detached with a reasonable sized garden. For most people- that is an impossible dream- they just don't know it yet. As people reach the stage in life when they need to make choices and decisions regarding children etc- these will come to the fore.

The announcements from Ulster Bank, First Active and RBS at the weekend, about the very low probability that further cuts will be passed on in full (aside from the .25% they have no intention of passing on from Thursday's cut) mean that the average home owner will be facing the same dilemma as the property investors before long.

At least the archetypal FTB is not relying on rental income cashflow to service his/her debts- in a market with rental supply increasing by 10-12% month on month........

Calina

amos13 wrote: »

sorry just read this. yes they had an influence, I'm not saying they had none whatsoever. what I'm saying is that there was already a demand there. even if the demand was say, 30-35% of the 40%, there was still a significant demand for rentals, its a chain - demand for accomodation leads to demand for landlords to provide it leads to demand for builders to build. is this not true?

Unfortunately, at the same time, the CSO revealed an overhang of unoccupied property of around 230,000. A lot of investment property in Ireland was not bought for rental but for flipping - speculation if you like. Current estimates - and figures are hard to come by - suggest that we have around a quarter of a million empty properties and I believe the census figures for Dublin gave a figure of 40,000 empty properties for Dublin City but haven't got them to hand - which would suggest that a lot of the demand was not utility driven but speculation driven.

I need to look at the DAFT rental counts again because a) my experience and b) my recollection of their detail over that time was that rents were generally nominally stagnant or not rising in line with inflation. Certainly that was my experience at the time as well. They are certainly on the way down at the moment, however.

Calina

smccarrick wrote: »

The one thing I would say- is that First Time Buyers have consistently been below 25% (and at the peak of the market in 2006, as low as 17.2%) of the market for approved mortgages. The vast majority of construction in the previous 6 years has been aimed squarely at the FTB market- with very little in the "trader-upper" category. Even with the fall in construction- that which is still being constructed, is primarily ye 1-3 bed apartment with no garden.

Ironically if said apartments were designed for long term habitation I wouldn't have a problem with this. Unfortunately, a lot of the 1 and 2 bed apartments are not, so they are unsuitable for long term single, or trader downers for the simple reason that they have zilch storage and consist of disproportionately small rooms. In 2006, this was still absorbed, wholesale, by investor-speculators.

smccarrick wrote: »

Aside from anything else- most people who purchased in the last 10 years, did not do so on the basis that it was where they intended to stay longterm. Most people hanker after their 3 bed detached with a reasonable sized garden. For most people- that is an impossible dream- they just don't know it yet. As people reach the stage in life when they need to make choices and decisions regarding children etc- these will come to the fore.

To be fair, they were sold that scenario, regrettably. Again, it wouldn't matter if the starter homes were actually long term habitable but they are not. Any of the starters I've looked at I honestly wonder how two people live in them; I found them claustrophobic.

I'd also add that this is primarily an urban issue - outside the cities - and it was a bigger issue in Dublin than anywhere else - people bought or built houses that were not for ladder trading purposes.

smccarrick wrote: »

The announcements from Ulster Bank, First Active and RBS at the weekend, about the very low probability that further cuts will be passed on in full (aside from the .25% they have no intention of passing on from Thursday's cut) mean that the average home owner will be facing the same dilemma as the property investors before long.

At least the archetypal FTB is not relying on rental income cashflow to service his/her debts- in a market with rental supply increasing by 10-12% month on month........

A lot of FTBs I think in the current climate may well be keeping a low profile. I think the time of buying something just to have something is gone.

amos13

Calina wrote: »

When I came back to Ireland in 1999, renting could be construed as dead money. The cost of renting was beyond the cost of purchase, even for a single person, so it was a nobrainer to buy.

The issue in Ireland is not so much that people want their own homes, but that property was also seen as a get rich scheme. This is why I constantly highlight the investment property issue particularly with respect to 2006.

However, in the current circumstances, when you see people seeing 100K haircuts on entry level apartments depending on when they bought...and yes that is happening where I live...you will find a certain amount of revulsion. The refrain I am hearing most often now is not "rent is dead money" but "you are lucky...you are so flexible". From homeowners.

I think you need to understand that the property market is a lot more nuanced than you give it credit for. Psyches can change; I think that's happening. Part of the buy buy psyche in Ireland is linked to poor tenancy legislation and a monumental lack of trust between market participants in the rental market. #

You're making a number of worrying assumptions however.

1) We have rising unemployment at the moment. Forecasts suggest that this could hit 12% by 2010. I am hopeful that it won't, but during 2009, for every one woman made unemployed, eight men last their jobs. This is a worrying demographic split from a social point of view. It's also worrying because traditionally the ones who HAVE to take time off to have children are women. As a result, it's not good to be relying on women per se to pay mortgages particularly if a disproportionate number of men are unemployed.

2) That latter point is a key argument against assuming that there will always be two incomes to pay off a mortgage

3) Salary inflation has happened in the past; it's not guaranteed into the future and because of the nature of the employment market in Ireland right now - ie very little - and globalisation and offshoring of many service jobs which are not, in any case, all that highly paid, it's unwise to rely on it. I am aware that there is anecdotal evidence that banks took prospective salary inflation into consideration for certain professions; I do not think it was wise given that one of those professions is starting to lay off qualified newbies.

4) the reason, for the most part, that people didn't buy on their own is because a single salary cannot, at this point in time, fund a property alone. This did not used to be the case; and it should not be the case as it puts an unnecessary strain on family finances. It's also worth noting that interest rates are historically low and their long term trend is up. In the past, interest rates have been historically high on low principles, and their trend was down. I would prefer the latter because the former does not necessarily mean that salary inflation will leave you better off, particularly if interest rates are rising. Ask anyone on an interest only mortgage what the last 18 months were like while rates were going up rather than down to get a feel for the impact that would have.

I see no reason why property prices in Ireland won't recover at some point in the future; the problem as I see it, they won't start recovering until they hit bottom and I don't believe they are anywhere close to that for the time being. I suspect that because of the property ladder scenario in Dublin being particularly common, certain property types there will take a hammering for a while to come...outside Dublin, I think anywhere with a lot of non-locally owned/occupied property, eg parts of Leitrim and Donegal, and Roscommon, are heading for a hard time.

I take your points, I've seen the 100k haricuts in places like Ashtown in Dublin, but anyone who bought these at the ridiculous prices they were at a year ago were crazy, even in the climate of the time. However on your points about unemployment etc, BTL are generally long term investments, high unemployment will not last for the same term as the house (when I was referring to asset lives previously also, a 25-50 year asset life is how long the asset could be reasonbly be owned before death, not how long the actual house will last), and the same goes for salary rates - they are not going to stay at the current level forever. we all know we're going through a period of recession, but this isn't expected to last more than 3 years, at current estimates anyway. a lot of economists are of the belief that once the recession is over we will experience a long period of sustainable, steady growth, rather than extreme boom. If this is the case the economy will be a lot more stable and employment a lot more secure. people will begin to buy again, but for a while it will be the houses that are already there. I doubt that developers will see any of the benefits until the overhang is cleared.

Also, the financial services sector as you say is laying of a lot of people, but this is globally. again once the global economy picks up, so too will international companies begin to recuit again. redundancies are temporary measures for companies to get through the hard times, until they come out the other side

SimpleSam06

amos13 wrote: »

strict credit criteria will loosen again in a few years once the banks regain sufficient liquidity.

The banks won't be allowed to place themselves in the same position again. Right now world leaders are meeting to decide new and stricter financial rules.

gurramok

70,000 Poles to return home in a year, thats a deathknell to the BTL brigade.
http://www.independent.ie/business/irish/almost-70000-poles--to-return-home-within--a-year-survey-shows-1566869.html

Remember, each of the empty lets has a mortgage on them, these impending mortgage defaults affect the banks directly.

Nearly quadruple supply of lets in Dublin alone in just 2 years among the 20,000 lets on Daft.

Thats more trouble for canny.

SimpleSam06

gurramok wrote: »

70,000 Poles to return home in a year, thats a deathknell to the BTL brigade.
http://www.independent.ie/business/irish/almost-70000-poles--to-return-home-within--a-year-survey-shows-1566869.html

There were always Poles returning home though, since the start of the boom. The thing is they were replaced by new economic migrants from Poland and Eastern Europe. Have we got any numbers on how many are expected to come into the country over the next year, or has that slowed to a trickle?

The_Conductor

SimpleSam06 wrote: »

There were always Poles returning home though, since the start of the boom. The thing is they were replaced by new economic migrants from Poland and Eastern Europe. Have we got any numbers on how many are expected to come into the country over the next year, or has that slowed to a trickle?

Annecdotally, it has indeed slowed to a trickle, and for the first time in years, we have a renewal of emigration outwards from the country of Irish nationals. Some of the folk looking at geographic trends at NUIM are now suggesting between a 5 and 10% fall in the overall population, back towards around the 3.5 million mark. Keep in mind the 2006 census was the very peak of the boom.......

A possible 10% fall in overall population added into the mix....... Interesting.......

ZYX

gurramok wrote: »

70,000 Poles to return home in a year, thats a deathknell to the BTL brigade.
http://www.independent.ie/business/irish/almost-70000-poles--to-return-home-within--a-year-survey-shows-1566869.html



Thats more trouble for canny.

Not to doubt the Irish Independent, a paper never to let the truth get in the way of a story but according to the CSO, in 2006 there were 63,276 Poles living in Ireland. Pretty neat trick if 70,000 of these return home.

ZYX

SimpleSam06 wrote: »

There were always Poles returning home though, since the start of the boom. The thing is they were replaced by new economic migrants from Poland and Eastern Europe. Have we got any numbers on how many are expected to come into the country over the next year, or has that slowed to a trickle?

This is what is expected over next 18 years. http://www.cso.ie/releasespublications/documents/population/current/poppro.pdf
Basically states population to increase by 1.5million by 2026

The_Conductor

ZYX wrote: »

This is what is expected over next 18 years. http://www.cso.ie/releasespublications/documents/population/current/poppro.pdf
Basically states population to increase by 1.5million by 2026

I think this will be seriously revised to be honest.
There were an awful lot of assumptions made when they came up with those projections- assumptions which we now know to be wholly misplaced. The whole proposition is based on actual historical data from 1994 to 2006 (including the TFR (fertility) figures etc). Population and demographic experts in other institutions are now very much at odds with the CSOs projections.

gurramok

ZYX wrote: »

Not to doubt the Irish Independent, a paper never to let the truth get in the way of a story but according to the CSO, in 2006 there were 63,276 Poles living in Ireland. Pretty neat trick if 70,000 of these return home.

Well, an awful lot didnt state their nationality in the census. They probably add all those that have come since as well.

CPL, the big recruitment firm, seem to be the source of this news http://www.breakingnews.ie/business/mhidsnojqlsn/

ZYX

gurramok wrote: »

Well, an awful lot didnt state their nationality in the census. They probably add all those that have come since as well.

CPL, the big recruitment firm, seem to be the source of this news http://www.breakingnews.ie/business/mhidsnojqlsn/

CPL have just opened an office in guess where? Yes Poland. So they needed some free advertising. They sent e-mails to 500 Polish people. Where did they get the e-mail addresses of these people? Well they don't say but as a recruitment agency it was probably people already on their books. So of these 500 people who are actively seeking employment or in short term contracts 33% say they are planning to go back home. Hardly scientific. They then guess that half of all immigrants in Ireland are Polish and extrapolate the data to this 200,000 people. This info is sent to newspapers and lazy journalists print it.