Some good news anyway! Rents still on the up!

The Spider

http://www.cso.ie/en/media/csoie/releasespublications/documents/prices/2013/prices/cpisubindices/pic_jun2013.pdf

Increase of .8% in June that's a 7% increase on this time last year. Son rent of a grand a month it's increasd by 70 euros. Welcome news indeed, well for me and some others around here.

Richard Dower

The Spider wrote: »

http://www.cso.ie/en/media/csoie/releasespublications/documents/prices/2013/prices/cpisubindices/pic_jun2013.pdf

Increase of .8% in June that's a 7% increase on this time last year. Son rent of a grand a month it's increasd by 70 euros. Welcome news indeed, well for me and some others around here.

and very bad news for renters, especially those who rely on assistance...these increases price most people out of the market. and you end up with people living in sub standard accomodation or in high scumbag areas.

The Spider

Richard Dower wrote: »

and very bad news for renters, especially those who rely on assistance...these increases price most people out of the market. and you end up with people living in sub standard accomodation or in high scumbag areas.

To be honest that's a government issue, if a private individual puts their own money and takes the risk of a big loan to buy a place and then decides to rent it out, they're entitled to make as much money from that as the market will allow.

No private individual is obliged to to take on any one, it's their investment they can decide who lives in it.

It's up to the government to provide accommodation for those on assistance.

Rents are still pretty low, in 2002 I was paying 1270 a month for a two bed flat in a basement in Rathmines, inflation alone dictates that rents should be way higher.

Ray Palmer

Rents rising is actually good news for most people in the long term. It will increase demand for purchases as people want to avoid rising rents. Investors in trouble may become stabilised with increased revenue. Investment into rental property will increase providing more supply.

Scotty #

The Spider wrote: »

Rents are still pretty low, ... inflation alone dictates that rents should be way higher.

Nonsense! Celtic Tiger is over! We're officially in recession again. I would expect rents to fall (considerably maybe) over the next 12 months.

The Spider

Scotty # wrote: »

Nonsense! Celtic Tiger is over! We're officially in recession again. I would expect rents to fall (considerably maybe) over the next 12 months.

Nope, aint going to happen, recovery is well under way!

Ray Palmer

Scotty # wrote: »

Nonsense! Celtic Tiger is over! We're officially in recession again. I would expect rents to fall (considerably maybe) over the next 12 months.

Expect to be disappointed all signs are rent is going to keep going up for a while. Recession doesn't mean no money in the country it doesn't even necessarily mean a bad thing and is just natural flow.

viper006

The Spider wrote: »

To be honest that's a government issue, if a private individual puts their own money and takes the risk of a big loan to buy a place and then decides to rent it out, they're entitled to make as much money from that as the market will allow.

No private individual is obliged to to take on any one, it's their investment they can decide who lives in it.

It's up to the government to provide accommodation for those on assistance.

Rents are still pretty low, in 2002 I was paying 1270 a month for a two bed flat in a basement in Rathmines, inflation alone dictates that rents should be way higher.

Part in bold is a good point. The reverse is also true however, people that have taken out big loans for investment are liable to lose as much money as the market allows as well and yet cause these investments havent worked out that happy to let the taxpayer share the burden. Dont think they be so quick to share the profits!!

Scotty #

The Spider wrote: »

Nope, aint going to happen, recovery is well under way!

Not according to latest figures from the CSO.

Ray Palmer wrote: »

Recession doesn't mean no money in the country it doesn't even necessarily mean a bad thing...

You do know what recession means right? I've never ever seen a country go into recession and see it as a good thing! Maybe you could show me one?

House prices IMO are still way too high, though there is a glut of potential first timers out there at the mo. Once they're off the market I think prices will drop again over the next 5 years and rent accordingly.

Just my humble opinion. I could even be wrong

The Spider

viper006 wrote: »

Part in bold is a good point. The reverse is also true however, people that have taken out big loans for investment are liable to lose as much money as the market allows as well and yet cause these investments havent worked out that happy to let the taxpayer share the burden. Dont think they be so quick to share the profits!!

Again this is standard business practice, wherever you go. In the states you could declare yourself bankrupt and walk away, also mortgages are non recourse it's the system here that's flawed.

Regardless the renter has no risk, they are asked to pay for a service that's provided at market rate as that's the law. The landlord carries the burden of risk and in the past few years was probably putting a lot of money towards the rent as the rent achieved fell short of rent required.

Ray Palmer

Scotty # wrote: »

You do know what recession means right? I've never ever seen a country go into recession and see it as a good thing! Maybe you could show me one?

House prices IMO are still way too high imo, though there is a glut of potential first timers other there at the mo. Once they're off the market I think prices will drop again over the next 5 years and rent accordingly.

Just my humble opinion. I could even be wrong

I know exactly what it means and know it is part of the natural process. You might as well say sweating or going to the toilet are bad things. Try being alive doing neither.

I didn't say recession was a good, "not necessarily bad" is not the same thing as saying good. It is a period of readjustment in the normal cycle. Considering how the economy overheated and that we needed things readjusted since then it lets things settle down.

The market is currently still suffering shock. You are basically suggesting property investment will return within 5 years to deal with the rent supply issue. I would say recent events will keep many people away from investing in property for a long time now. The normal FTBs will also be diminished due to fear keeping renting more likely and then you have the fact foreign nationals do typically buy and Dublin has a 20-25% foreign national population it didn't have before. Even if you take it only half rent that is a permanent massive increase in rental demand.

Lots of reason to say rent will be more common for ever more and demand will increase and supply has no signs of increasing.

Find to have a different opinion but you aren't actually saying why other than you think the FTBs will be used up quite quickly. You know there are tons of people in apartment itching to buy a house to raise their families in? That is a lot more pent-up demand than FTB.

Citycap

Scotty # wrote: »

Nonsense! Celtic Tiger is over! We're officially in recession again. I would expect rents to fall (considerably maybe) over the next 12 months.

Maybe in skangerland. Any decent areas is seeing a rise in rents

melekalikimaka

d4/d6 and the likes will maintain their rents, and rise a little, everywhere else will drop and go to the dogs

Pawwed Rig

viper006 wrote: »

Part in bold is a good point. The reverse is also true however, people that have taken out big loans for investment are liable to lose as much money as the market allows as well and yet cause these investments havent worked out that happy to let the taxpayer share the burden. Dont think they be so quick to share the profits!!

Good point and I often wonder why buy to let have the same terms as a mortgage. I am of the opinion that they should be treated as a business loan where if the 'business' goes to the wall then the bank should share in the loss, similar to any business loan.
Having said that they do share the profits by way of taxation. Rental income cannot avail of the standard corporation tax rate (in incorporated) and will be taxed at the IT basis sole traders.

Fiery mutant

Citycap wrote: »

Maybe in skangerland. Any decent areas is seeing a rise in rents

melekalikimaka wrote: »

d4/d6 and the likes will maintain their rents, and rise a little, everywhere else will drop and go to the dogs

So once we leave the environs of D4/D6 we are into skangerland are we ?!?!

The sooner the better that silver spoon comes out your ass the better off the country will be.

Tigger

The Spider wrote: »

To be honest that's a government issue, if a private individual puts their own money and takes the risk of a big loan to buy a place and then decides to rent it out, they're entitled to make as much money from that as the market will allow.

No private individual is obliged to to take on any one, it's their investment they can decide who lives in it.

It's up to the government to provide accommodation for those on assistance.

Rents are still pretty low, in 2002 I was paying 1270 a month for a two bed flat in a basement in Rathmines, inflation alone dictates that rents should be way higher.

i agree
thats why it makes me sick that investors decided to picket alsops

Tigger

Scotty # wrote: »

Not according to latest figures from the CSO.


You do know what recession means right? I've never ever seen a country go into recession and see it as a good thing! Maybe you could show me one?

House prices IMO are still way too high, though there is a glut of potential first timers out there at the mo. Once they're off the market I think prices will drop again over the next 5 years and rent accordingly.

Just my humble opinion. I could even be wrong

of course it is good for some
its also bad for some
rents are rising and will for a long time
the subclasses (scumbaggy areas) are a necessity of capitalism
i hate the system but i still try to find the way to be on top

lima

The Spider wrote: »

http://www.cso.ie/en/media/csoie/releasespublications/documents/prices/2013/prices/cpisubindices/pic_jun2013.pdf

Increase of .8% in June that's a 7% increase on this time last year. Son rent of a grand a month it's increasd by 70 euros. Welcome news indeed, well for me and some others around here.

I hope you are paying the mortgage on your wife's apartment

Repossessions will bring rents down again

lima

Ray Palmer wrote: »

Rents rising is actually good news for most people in the long term. It will increase demand for purchases as people want to avoid rising rents. Investors in trouble may become stabilised with increased revenue. Investment into rental property will increase providing more supply.

When landlords who are not paying their mortgages get their properties repossessed then this may bring rents down

lima

I am paying e1100 for a 1br in D6, which is extremely high (for Dublin*), so my rent won't be going up for a while, and if it does I'm happy to move somewhere else for cheaper rather than paying a cent more.

I'm currently renting because I am waiting for repossessions to happen so once the people who aren't paying their mortgages get their properties rightly repossessed then prices will go down and I might buy. I can guess that a lot of people are like me, waiting with large deposits for more stock to become available and when the repossessions happen, then rents might go down.

* Having lived in London where a 1br can cost gbp1400 pm I do feel that Dublin has cheap rent, relative to other countries, however salaries for renters are probably a lot lower than London, also it's very hard to get a mortgage in London right now due to the very high property prices in London

StillWaters

melekalikimaka wrote: »

d4/d6 and the likes will maintain their rents, and rise a little, everywhere else will drop and go to the dogs

I've been on this site too long. Didn't we have this very same argument last year. Rents are not going to drop and go to the dogs. The rental sector is very buoyant. Investors should move in now and stabilise the Market, but they wont and can't because credit is still restricted. We still have another couple of years of this *I* think. Renters being squeezed due to lack of supply.

murphaph

lima wrote: »

I'm currently renting because I am waiting for repossessions to happen so once the people who aren't paying their mortgages get their properties rightly repossessed then prices will go down and I might buy. I can guess that a lot of people are like me, waiting with large deposits for more stock to become available and when the repossessions happen, then rents might go down.

Do you think the occupants will vanish into thin air? They'll (mostly) become tenants!

khards

The Spider wrote: »

http://www.cso.ie/en/media/csoie/releasespublications/documents/prices/2013/prices/cpisubindices/pic_jun2013.pdf

Increase of .8% in June that's a 7% increase on this time last year. Son rent of a grand a month it's increasd by 70 euros. Welcome news indeed, well for me and some others around here.

I have more great news for you, petrol is going up next week. I think I will crack open a bottle of wine and celebrate!

The Spider

khards wrote: »

I have more great news for you, petrol is going up next week. I think I will crack open a bottle of wine and celebrate!

Do you own a petrol station?

WIZE

This will be bad for Landlords too . You will have tenants who have been renting the same house for years moving out if the rent goes up and unknowns moving in. I know my Landlord would not be happy.

khards

The Spider wrote: »

Do you own a petrol station?

Yes! I think I may put an extra couple of cents on just because I can too.

The Spider

khards wrote: »

Yes! I think I may put an extra couple of cents on just because I can too.

Well if your's is the only one around your area maybe you should, but if there's others around, surely you'll have to match their price, or lose business?

The Spider

WIZE wrote: »

This will be bad for Landlords too . You will have tenants who have been renting the same house for years moving out if the rent goes up and unknowns moving in. I know my Landlord would not be happy.

Landlord doesn't have to put up the rent, and in most cases won't ( we won't) but if they have to relet then they'll probably go for the market rent.

murphaph

WIZE wrote: »

This will be bad for Landlords too . You will have tenants who have been renting the same house for years moving out if the rent goes up and unknowns moving in. I know my Landlord would not be happy.

If rents in general are going up then where are they going to go?

questionmark?

Slight Dublin bias in this thread!

I think house prices are still too high and we need repossessions to happen. It doesn't sound nice but its true. Someone a year behind on their mortgage is a liability and the mortgage noose around there neck is a liability to them.

wrmwit

lima wrote: »

I am paying e1100 for a 1br in D6, which is extremely high (for Dublin*), so my rent won't be going up for a while, and if it does I'm happy to move somewhere else for cheaper rather than paying a cent more.

I'm currently renting because I am waiting for repossessions to happen so once the people who aren't paying their mortgages get their properties rightly repossessed then prices will go down and I might buy. I can guess that a lot of people are like me, waiting with large deposits for more stock to become available and when the repossessions happen, then rents might go down.

* Having lived in London where a 1br can cost gbp1400 pm I do feel that Dublin has cheap rent, relative to other countries, however salaries for renters are probably a lot lower than London, also it's very hard to get a mortgage in London right now due to the very high property prices in London

Jaysus that's a lot of rent for a 1 bed. We live in a 1 bed too in D6 and paying €900. It's a lot but its a nice gaf. Our landlord called during the week and said he's putting the rent up €50 when our lease is up in August. We're not prepared to pay for it but looking at the rental market, especially in the D6 area, it looks like we don't have a choice. The rental market is tough and it's going to stay like that for a while.

m5ex9oqjawdg2i

The Spider wrote: »

To be honest that's a government issue, if a private individual puts their own money and takes the risk of a big loan to buy a place and then decides to rent it out, they're entitled to make as much money from that as the market will allow.

No private individual is obliged to to take on any one, it's their investment they can decide who lives in it.

It's up to the government to provide accommodation for those on assistance.

Rents are still pretty low, in 2002 I was paying 1270 a month for a two bed flat in a basement in Rathmines, inflation alone dictates that rents should be way higher.

What are you talking about? Absolute rubbish.

Rent is stupidly high.

zl1whqvjs75cdy

Is it just in the Dublin area that rent is increasing? Or countrywide? (Obviously excluding the back bogs of Cavan where there's no work)

The Spider

[QUOTE Rent is stupidly high.[/QUOTE]

Not compared to what it was, rent in dublin has always been high, there was never a time when it was low compare to what you earned.

khards

The rent ceiling has now been reached. After the crash rents undershot and have been catching up to the maximum level that people can afford.
The last year rents have risen whilst real wages have been starting to decline.
That is after you have been paid, taxed, paid for essential utilities there is less money to spend that there was in the past.
Inflation of fuel, groceries, motoring costs, road tax has been eating away at wages and disposable for years. From all the noise coming from renters, it looks like like this is hitting a crunch point where rents will only be able to rise in line with real wage increases, after all renters can only have X amount to pay as rent.

It is easy to see that rents are restricted by earnings, example single person earning 40k:
Gross Pay ~2400pcm
Income tax ~930pcm
Car costs ~100pcm
Fuel ~ 100pcm
Rent ~1000pcm
Food ~200pcm

Total = 2330

It can be clearly seen that in this example the tennant is already overstretched and the rent could only rise 70pcm before arrears and defaults occur.
The more tax increases and inflation increases the cost of fuel, food, commuting the less will be available for rent.

The outlook is not good for landlords, only wage rises and low inflation would save them. Even then as tax is a percentage of wages they would see little benefit for wage rises.

listermint

The Spider wrote: »

Again this is standard business practice, wherever you go. In the states you could declare yourself bankrupt and walk away, also mortgages are non recourse it's the system here that's flawed.

Regardless the renter has no risk, they are asked to pay for a service that's provided at market rate as that's the law. The landlord carries the burden of risk and in the past few years was probably putting a lot of money towards the rent as the rent achieved fell short of rent required.

This part in bold i suppose is the more hilarious part of your posts. What 'Market Rate' is that ?

The Market where my tax money is going into NAMA to hold your 'market rate' artificially high ?

Is that the market rate you refer to ? ROFL

The rent system and housing system in this country is fundamentally damaged to the core. Its broken, your so called market isnt a true reflection of anything when you have so many unfinished properties in a capital city of this size being either deliberately held off market or have no buyers for them on a scale that would suit the likes of NAMA to make a sale.

On top of this i also have my tax dollas going into funding private landlords for social housing which lets face it, is providing many many sub standard homes for top dollar.

Where is this so called legitimate market one would wonder?

murphaph

khards wrote: »

It is easy to see that rents are restricted by earnings, example single person earning 40k:
Take home ~2400pcm
Income tax ~930pcm
Car costs ~100pcm
Fuel ~ 100pcm
Rent ~1000pcm
Food ~200pcm

Total = 2330

Income tax on take home pay? Your tenant here has €930 more in his pocket than you thought...better than finding a fiver in there anyway!

Pawwed Rig

khards wrote: »

It is easy to see that rents are restricted by earnings, example single person earning 40k:
Take home ~2400pcm
Income tax ~930pcm
Car costs ~100pcm
Fuel ~ 100pcm
Rent ~1000pcm
Food ~200pcm

Total = 2330

I think you deducted tax twice here unless I have misunderstood
To correct based on your figures
Take home ~3,333pcm
Income tax ~930pcm
Car costs ~100pcm
Fuel ~ 100pcm
Rent ~1000pcm
Food ~200pcm

Total = 2330
Leaving €1,000 rather than €70

khards

Ok, I meant Gross pay, not take home pay. I thought that would be obvious from the fact that I said a 40k salary and that rents are not 1k more than they are now.

http://en.wikipedia.org/wiki/Law_of_rent

The Law of Rent

The Law of Rent states that the rent of a land site is equal to the economic advantage obtained by using the site in its most productive use, relative to the advantage obtained by using marginal (i.e., the best rent-free) land for the same purpose, given the same inputs of labor and capital[2]

Ricardian rent should not be confused with contract rent, which is the "actual payments tenants make for use of the properties of others." (Barlow 1986). Rather, the Law of Rent refers to the economic return that land should accrue for its use in production.

Being a political economist, Ricardo was not simply referring to land in terms of soil. He was primarily interested in the economic rent and locational value associated with private appropriation of any natural factor of production. The law of rent applies equally well to urban land and rural land, as it is a fundamental principle of economics.

Ricardo noticed that the bargaining power of laborers can never dip below the produce obtainable on the best available rent-free land, because whenever rent leaves them with less than they could get on that free land, they can simply move to the new location. The produce obtainable on the best available rent-free land is known as the margin of production. Since landlords have a monopoly over a given location, the only limiting factor for rent is the margin of production. Thus, rent is a differential between the productive capacity of the land and the margin of production.

Note that Ricardo's original formulation assumes that the best quality farm land would be the first to be cultivated, and that goods are sold in a competitive, single price market.
Wages

This law has a number of important implications, perhaps the most important being its implication for wages. The Law of Rent implies that wages bear no systematic relationship to the productivity of labor, and are instead determined solely by the productive capacity of marginal land,[3] as all production in excess of that amount will be appropriated by landowners in rent.

So you can conclude that if a tenant was taking home and extra €1000 per month that the money would be sucked up in rent, just like during the boom times.

Ray Palmer

listermint wrote: »

This part in bold i suppose is the more hilarious part of your posts. What 'Market Rate' is that ?

The Market where my tax money is going into NAMA to hold your 'market rate' artificially high ?

Is that the market rate you refer to ? ROFL

The rent system and housing system in this country is fundamentally damaged to the core. Its broken, your so called market isnt a true reflection of anything when you have so many unfinished properties in a capital city of this size being either deliberately held off market or have no buyers for them on a scale that would suit the likes of NAMA to make a sale.

On top of this i also have my tax dollas going into funding private landlords for social housing which lets face it, is providing many many sub standard homes for top dollar.

Where is this so called legitimate market one would wonder?

Nama doesn't have that much property in high rent areas (Dublin)

So that pretty much negates you claim of a completely broken market.

RA has gone up in Dublin as it was not an artificial floor for rent and tenants couldn't find places as a result.

Effectively what you are saying may apply in some areas in the country but not where rent is going up and demand is highest. In the areas that is may actually apply it is actually not effecting a lot of people.

murphaph

khards wrote: »

Ok, I meant Gross pay, not take home pay. I thought that would be obvious from the fact that I said a 40k salary and that rents are not 1k more than they are now

What? Your point was that a guy on 40k was basically at his "limit" wrt the amount of rent he can pay.

You made a mistake and that 40k guy actuall has ca. 1k more per month, so clearly using YOUR example, there is room for rents to increase, which you said there wasn't.

Ray Palmer

khards wrote: »

Ok, I meant Gross pay, not take home pay. I thought that would be obvious from the fact that I said a 40k salary and that rents are not 1k more than they are now.
.

40k/12=3333.33 would be gross pay
2400*12=28800 would be the yearly gross income if we used your figures.

You got it wrong.

khards

murphaph wrote: »

What? Your point was that a guy on 40k was basically at his "limit" wrt the amount of rent he can pay.

You made a mistake and that 40k guy actuall has ca. 1k more per month, so clearly using YOUR example, there is room for rents to increase, which you said there wasn't.

Please explain "there is room for rents to increase, which you said there wasn't" as you are not making sense.
I did say that there was room for a €70 increase per month, then any inflation of goods/services would effectively reduce the maximum rent.

The 40k buy is taking home around 2,333 of which 1k is rent and the rest in spent on essential living expenses. Where do you see the increases coming from?

khards

Ray Palmer wrote: »

40k/12=3333.33 would be gross pay
2400*12=28800 would be the yearly gross income if we used your figures.

You got it wrong.

You would need to deduct income tax to get the net monthly salary in order to make any type of affordability calculation.

murphaph

khards wrote: »

Please explain "there is room for rents to increase, which you said there wasn't" as you are not making sense.
I did say that there was room for a €70 increase per month, then any inflation of goods/services would effectively reduce the maximum rent.

The 40k buy is taking home around 2,333 of which 1k is rent and the rest in spent on essential living expenses. Where do you see the increases coming from?

The €930 income tax that he's already paid!

You made a mistake!

Ray Palmer

khards wrote: »

You would need to deduct income tax to get the net monthly salary in order to make any type of affordability calculation.

You don't know what "Gross Pay" and "Take Home Pay" means.

You have said you meant gross pay and that is why tax was deducted afterwards. The problem is you got the gross pay incorrect and used a figure of below 30k for your example of a 40k salary.

You didn't do your calculations correctly. You don't seem to understand the corrections people are pointing out.

khards

murphaph wrote: »

The €930 income tax that he's already paid!

You made a mistake!

You are saying that someone earning €40k, taking home about €2300 can afford a rent of €1,930 pcm

You could also make a more constructive statement rather than the childish "You made a mistake!".

khards

Ray Palmer wrote: »

You don't know what "Gross Pay" and "Take Home Pay" means.

You have said you meant gross pay and that is why tax was deducted afterwards. The problem is you got the gross pay incorrect and used a figure of below 30k for your example of a 40k salary.

You didn't do your calculations correctly. You don't seem to understand the corrections people are pointing out.

I fully understand what Gross pay and net pay are, that is why I went back and edited the post to correct the mistake.
The numbers are correct, it was that I has entered "Gross Pay" instead of "Net Pay" - can you understand that?

Zamboni

He made a balls of the numbers but his point is valid.
There is a host of other obligatory living costs that are not listed.

In saying that though, I don't see rents coming down too soon.
It could be three years for repo sales begin to affect both markets if there is any affect at all.
The private losses that should occur are continually being socialised through debt write downs using state owned banks as the vehicle.
Lots of well connected people are having their personal balance sheets rewritten.
The rest of the mugs will be left paying artificially high rents and artificially high house prices.

Business as usual folks.

listermint

Ray Palmer wrote: »

Nama doesn't have that much property in high rent areas (Dublin)

So that pretty much negates you claim of a completely broken market.

RA has gone up in Dublin as it was not an artificial floor for rent and tenants couldn't find places as a result.

Effectively what you are saying may apply in some areas in the country but not where rent is going up and demand is highest. In the areas that is may actually apply it is actually not effecting a lot of people.

There are Thousands of apartments across Dublin County Unfinished.

So Yes this distorts the market very effectively and negates nothing.


Onwards though for whatever it was you were saying....

Zamboni

Annual Salary 40k

Monthly Gross Pay 3330
Less 930 of income taxes
= Nett Pay 2400

Less
Car costs ~100pcm
Fuel ~ 100pcm
Rent ~1000pcm
Food ~200pcm

= €1,000 remaining disposable income

You've no way out khards but I appreciate the point you are trying to make.