Average Rent now over 1000 € per month

handlemaster

The average rental cost per month nation wide is now over 1000€ per month. At what level will the breaks come on ? What is it like around the country for those trying to rent? I remember the 90's queues in Dublin and been interviewed to rent a room ,are the queues back again ?

whiskeyman

Demand keeps far outstripping supply, so it can only go upwards until more units come on the rental market.
I'm currently looking to buy, and from listings, it looks like a huge amount of rental properties are up for sale.

bmwguy

http://m.independent.ie/business/personal-finance/property-mortgages/rents-go-above-1000-a-month-for-the-first-time-since-meltdown-34700246.html

If it's this story you are quoting from, look at the picture. Dublin and Wicklow are the only 2 counties over 1000. I know technically the average could be still over 1000 even though 30/32 counties are under but it's kind of misleading. North kildare would be definitely over 1000 as well, even though kildare is close as a whole at 994.

handlemaster

http://m.rte.ie/news/2016/0510/787318-rents/

ED E

handlemaster wrote: »

,are the queues back again ?

They were back last summer.

lisasimpson

Thankfully the cork situation is been highighted at last. Was looking recently. V little out there and a large number only available for a few months or they dont want you to stay at weekends (and still charge the 7day rate) and advertising box rooms as doubles...its absoluteltly crazy i know of people who came home from canada and aus and have left again since coz they had nothing left after they had rent paid

macnug

If they changed the taxation rules for landlords it would help. Right now it just isn't worth it, financially speaking, to be a landlord. I'm not a landlord btw.

Obviously in Dublin/Cork etc more units need to be built but in the satellite towns around these city's you find that there may be 70+ houses for sale yet < 5 to rent. In the past a lot of those property's would have been rented out, relieving some of the pressure in the city's, now they are not because its not worth it.

pc7

My tenants are moving this week, (sadly they were fantastic, leaving Dublin). Local estate agent told me I can get 400 more than I was getting from them which sounds great but just means my tax bill will be even bigger! I'm not a greedy landlord, I'm not housing people in a slum, there were there 3 years or so and I never increased the rent, I just want a quiet life, I don't want to be a landlord, became an accidental one. Cant sell yet as wouldn't break even, I'd love to be rid of it.

Claw Hammer

pc7 wrote: »

My tenants are moving this week, (sadly they were fantastic, leaving Dublin). Local estate agent told me I can get 400 more than I was getting from them which sounds great but just means my tax bill will be even bigger!

You will have extra money to pay down the mortgage. The letting market is entirely cyclical and in a few years when it is hard to find tenants you may be glad that you availed of the higher rent to reduce borrowings.

Bob24

whiskeyman wrote: »

Demand keeps far outstripping supply, so it can only go upwards until more units come on the rental market.

I don't fully agree with this: on one hand yes of course limited offer vs high demand is applying upwards pressure, but on he other hand renters' budgets have an upper limit as I don't think businesses are ready to increase salaries to whatever level it takes for their employees to be able to afford decent accommodation. So it has to stop at some point even if no new units are being added, and if this is the case lowering demand will be the reason (if it happens it will hurt the economy as it will mean potential jobs are going to other places due to a lack of affordable accommodation here).

Field east

bmwguy wrote: »

http://m.independent.ie/business/personal-finance/property-mortgages/rents-go-above-1000-a-month-for-the-first-time-since-meltdown-34700246.html

If it's this story you are quoting from, look at the picture. Dublin and Wicklow are the only 2 counties over 1000. I know technically the average could be still over 1000 even though 30/32 counties are under but it's kind of misleading. North kildare would be definitely over 1000 as well, even though kildare is close as a whole at 994.

Daft.ie seems to be the official guide re levels of rent annual increases, regional differences, etc . But I am unclear as to what rent exactly is it talking about. I thought that the logical way of reporting rent is rent per person per accomodation type. It seems to me that Daft - and other sources - are referring to the rents being charged for all types of properties , lumping them all together and giving one figure , for example ,over €1000 per month for Dublin for April. They do not differentiate between , for example, between two and three bedroom houses, apartments suitable for one person, studios suitable for one person, studios suitable for two people. Etc.
the PRTB has all this information but has decided not to publish it to date.

Claw Hammer

Bob24 wrote: »

I don't fully agree with this: on one hand yes of course limited offer vs high demand is applying upwards pressure, but on he other hand renters' budgets have an upper limit as I don't think businesses are ready to increase salaries to whatever level it takes for their employees to be able to afford decent accommodation. So it has to stop at some point even if no new units are being added, and if this is the case lowering demand will be the reason (if it happens it will hurt the economy as it will mean potential jobs are going to other places due to a lack of affordable accommodation here).

People will pack in tighter and lease less space as rents climb. It does not require salary increases for this to happe. For quite some time people who could have rented a 1 bed on their own 4 years ago now have had to share a two bed with another. Their outlay is the same as previously. The 1 bed will have a couple in it to pay the higher rent. I remember the "double bedsit" which is now unknown.

Bob24

Claw Hammer wrote: »

People will pack in tighter and lease less space as rents climb. It does not require salary increases for this to happe. For quite some time people who could have rented a 1 bed on their own 4 years ago now have had to share a two bed with another. Their outlay is the same as previously. The 1 bed will have a couple in it to pay the higher rent. I remember the "double bedsit" which is now unknown.

Again, this is only possible to a point. Recent immigrants and graduates might accept to share a bedroom or have very long commutes even when they are employed (and even this is only up to a point, unless we want to rethink our society and decide it is acceptable for workers to be massively housed in dorm type of accommodation), but not everybody will be ok with that. Especially, qualified professionals whose jobs are related to the global economy and not specifically to the Irish one will not accept this as relocating to other countries is an option for them if the balance of the lifestyle they can get for their salary becomes unsatisfactory.

quadrifoglio verde

Perhaps it's time to extend the rent a room allowance to landlords
Rent a 1 bed 6000 is tax free
Rent a 2 bed 8000 is tax free

Anything over that and tax is liable on the entire amount.

The numbers I've just plucked from my arse, but it would be quite a strong incentive for landlords to keep rents low

Yes it is government interference which I despise but they've interfered so much that a little bit more won't hurt
Government coffers might fall slightly, but a good chunk of that should be picked up elsewhere through increased spending on VAT rated goods

KenjiOdo

Some landlords had big property portfolios before the recession.

• Took a hit on bad assets - Sold below cost to keep them afloat.

• Properties not let during recession - Commercial/Industrial particularly dented the books.

• Now they want to milk every residential letting they can get away with due to supply & demand - Nothing personal but retirement funds really took a hit during recession especially those without voluntary pension funds. Relying on property as a main source of income.

*NB I'm sure its not a very comprehensive list nor does it account for every landlord but you get the general picture..

The only way rents will come down is if bigger (much bigger) developments are built especially in the city centres (10+ storeys) around Ireland. Which probably won't happen very soon.

Bob24

quadrifoglio verde wrote: »

Perhaps it's time to extend the rent a room allowance to landlords
Rent a 1 bed 6000 is tax free
Rent a 2 bed 8000 is tax free

Anything over that and tax is liable on the entire amount.

The numbers I've just plucked from my arse, but it would be quite a strong incentive for landlords to keep rents low

Yes it is government interference which I despise but they've interfered so much that a little bit more won't hurt
Government coffers might fall slightly, but a good chunk of that should be picked up elsewhere through increased spending on VAT rated goods

As far as tax cuts are concerned, I tend to see the rental market the same as the purchasing one: high prices are caused by a lack of supply more than anything else, and tax cuts will likely just increase profits for landlords and EAs rather than reducing rents for tenants. Of course there is no problem saying profits are too tight, but then people need to be clear that tax cuts would be addressing mainly that point and not high rents which are driven by supply and demand rather than how much profit landlords are looking for.

yqtwqxqm

quadrifoglio verde wrote: »

Perhaps it's time to extend the rent a room allowance to landlords
Rent a 1 bed 6000 is tax free
Rent a 2 bed 8000 is tax free

Anything over that and tax is liable on the entire amount.

The numbers I've just plucked from my arse, but it would be quite a strong incentive for landlords to keep rents low

Yes it is government interference which I despise but they've interfered so much that a little bit more won't hurt
Government coffers might fall slightly, but a good chunk of that should be picked up elsewhere through increased spending on VAT rated goods

If I got an incentive like that I could rent two apartments happily.
As it is, those two apartments are airbnb. Purely because of the extra hassle that renting them would be.
But if i got a tax break or AT LEAST what you suggest, i could certainly swallow a bit of the extra hassle.

Sad to say though that the hassle of airbnb is far less than hassle of renting normally.

quadrifoglio verde

Bob24 wrote: »

As far as tax cuts are concerned, I tend to see the rental market the same as the purchasing one: high prices are caused by a lack of supply more than anything else, and tax cuts will likely just increase profits for landlords and EAs rather than reducing rents for tenants. Of course there is no problem saying profits are too tight, but then people need to be clear that tax cuts would be addressing mainly that point and not high rents which are driven by supply and demand rather than how much profit landlords are looking for.

Its not addressing that profits are too tight, its putting an artificial roof on rents without penalising the landlord. Yes in some cases it would make sense to go over the tax free allowance (a 4 bed in Ballsbridge for example) but at the lower end of the ladder, it would keep rents low for the lower earners and social welfare tenants, as well as wealthy people who are happy to live in that area.

it works excellently with the rent a room scheme. The tax free allowance for rooms rented out in a house is 12000, anything over that and the full amount is taxable. I don't see any reason why something similar couldn't be applied for buy to lets. If you keep the rent under x amount, you don't pay tax on it. The individual landlord is allowed decide whether they want to do this (market forces would also play a roll). Upswing is that for a lot of landlords, they'd have more money in their back pocket and at the same time tenants would pay lower rent.

Does it solve the problem of lack of housing. No it doesn't. Only building more houses would do that. They take time to build though and can't be plucked from thin air.
However it should slow rents rising because I know if I'm renting out a place tax free for 6000 and the market allows me to up that to 8000 but I'm liable for tax on all of it, Ill keep renting it out for 6000

yqtwqxqm

Only problem is that thw government want the tax revenue for rent. Its very handy to collect higher tax from rents while letting the landlords take the blame for rising rents. Suits the government perfectly.

quadrifoglio verde

yqtwqxqm wrote: »

Only problem is that thw government want the tax revenue for rent. Its very handy to collect higher tax from rents while letting the landlords take the blame for rising rents. Suits the government perfectly.

They'd suffer a minor reduction in tax revenue. The extra money in the landlords pocket would get spent on vat rated goods, likewise the extra money in the tenants would get spent on vat rated goods.
If I get a pay increase I don't spend it on potatoes. I spend it on my cars, expensive beers and stuff that I don't need. If the amount in my "me" account falls, the vat rated goods get the cull first.

All this money increases spending in the economy, which would the further increase spending in the economy. At the same time, it shows the government to be willing to do something that suits both sides of the table, both the renters and landlords

In the early 2000s, amateur landlords didn't invest in btls for rental yield they invested for capital appreciation. This was partly due to the favourable tax regime of 100% interest relief which incentivised them to invest and that capital appreciation. However the yield was shocking. 2% stuff. That isn't sustainable as they found out. Very few can manage to cover the interest from the rental income without dipping into other sources of income. In order for private market rental supply to increase, the tax side has to be looked at, as the only way they'll invest now is if the yield is good.
The tax man getting his grubby paws on a good chunk of it, isn't going to make too many run out and invest in btls

Arbie

We lived in a small 2-bed terrace in South Dublin in 2014 and were paying €1,200 per month. Those houses were selling for around €270,000 at that time.

Last year that little house sold for €410,000 and is now renting for €2,300 per month.

Friends bought a new build a few months ago and the next phase has just been priced at €30,000 more. There is already a long waiting list.

The_Conductor

Lets put a few myths to bed here.

1. There is a perverse incentive to keep debt on rental properties as high as possible. The interest on debt associated with rental properties- is the major cost that many people have that is deductible (at 75% of total) as an allowable cost.

2. A form 11 declaration (rental income) as an addendum to a tax return- is taxed at the declarants marginal rate of tax- and subject to full levies- i.e. potentially its subject to 53-54% tax.

3. Suggesting landlords will 'use the good times' to pay down loans on property- while paying up to 53-54% tax- and somehow stimulate the economy through increased local expenditure (by the landlord) just doesn't add up.

4. Most recent large scale landlords- think the REITs etc- are structured in such a manner that they maximise their rental income- and in many areas are the price determiners- while at the same time often pay no tax whatsoever- unlike your small scale landlord with their 53-54% tax. Many tenants prefer to rent units from the REITs- as the 'professional' landlords are often perceived as better for tenants. However- there is no human element there- while they follow the letter of the law- there is no give and take- its all black and white. These 'landlords' are very poor for the Irish economy- pay very little tax- and are no in things for the long term.

5. The issues in Dublin and the hinterland servicing Dublin (think Wicklow, Kildare, Meath, Louth etc) are well documented. Cork has recently been hitting the radar. Galway and other regional cities and towns- don't really feature in the national media- but things are just as bad there.

There has to be an equitable treatment of tenants- and landlords- by all parties- however, the elephant in the corner of the room that is keeping very very quiet- is of course the Revenue Commissioners. On the one hand- there is now a Division with 2 sections dealing specifically with Landlords and crucifying those who try their utmost to exercise their business in a prudent manner- on the other- the Irish public has been sold the idea of selling off thousands of units to REITS- as some sort of a panancea to our housing ills- when in fact they are driving up rents- and paying little or no tax at the same time.

If a landlord/tenant relationship is a business relationship- akin to any other relationship- it *needs* to be recognised as such- by all parties- and treated as such by all parties- including the Revenue Commissioners. The list of inequities in the tax code is startling- however- those who are being most unfairly treated- are tenants- and compliant landlords who try to prudently pay down their debts (alongside the PAYE employees in the country- who are being raped by the Revenue Commissioners on a daily basis).

The current legislation- is lopsided- and doesn't work. Safeguards designed to protect tenants are being abused by a small cohort- while disputes are adjudicated on in a reasonable timeframe- none of the judgements are enforceable- which is laughable- it doesn't protect tenants or landlords- property, reputation- or the right to a roof over people's heads.

The issue at the knux of all of this- from every possible perspective- is a lack of supply- where people want to live. Limited supply- is driving house prices and rental prices- and the tax regime- is driving many landlords out of the market. Meanwhile- several different categories of property have been removed from the market (with the best of intentions)- however nothing replaced them.........

Its a cascade effect- going back over the past 15 years- a portion of which relates to continuing bad debts on bank and lenders books- which is impeding their capital ratios (which have increased by more than double to 13%) so- other than on completely irrational lending loan rates (15% p.a. and higher) they refuse to lend to developers- which in turn feeds into the cycle of scarcity.

The property market- is a complete ecosystem in its own right- every section of it and the participants in each section- have an impact on one another- and on other sectors of the economy. Tinkering with one aspect of the equation- without looking at both the downstream and upstream segments- creates an imbalance. So- if we give tenants some sort of a rental tax credit- but don't do anything without supply- you simply have more spending capacity chasing the same limited stock of housing. If we don't treat all landlords in an equitable manner- you have one class of landlord actively doing their best to leave the market (admittedly the CAT exemptions have expired- however, even that is secondary when gross income is taxed at up to 53-54%). REITS- and their non-tax paying structures- don't help anyone- they want as much money out of the system asap- they view large scale developments as milk cows- to be milked to the fullest possible extent.

At the knux of all of this- has to be the question- should the rental of residential housing be treated as any other business- or should special rules apply- outside of those under which normal business operates (which I'd argue would have to include the abolition of the treatment of borrowing interest as an allowable cost- for absolutely all concerned- as its the ultimate perverse incentive to load up property with debt). Should tenants have some sort of a tax credit- perhaps- however- it has to be structured in such a way that it doesn't simply drive prices higher. Should the REITS be forced to pay tax- in a similar manner to any other landlords- hell yes, they should. Should banks be forced to recognise and deal with all delinquent loans- sigh, yes, they should.........

Someone, somewhere- needs a large wall- they need to map out the various elements of the market- in a visual manner- with linkages between the various causes and effects- properly identified- and if an entirely new regimen is not implemented- actions have to be targeted in such a manner to get maximum impact for effort- but with full cognisance of how those actions impact on all participants- and the broader economy as a whole.

Shawn Michaels

pc7 wrote: »

Local estate agent told me I can get 400 more than I was getting from them which sounds great but just means my tax bill will be even bigger!

An extra €400 in rent means around an extra €200 into your back pocket...not a bad thing in other words!

The Minister for Finance needs to make the system fairer for landlords. A reversal of the "75%" abomination in respect of interest would be a start.

The_Conductor

Shawn Michaels wrote: »

An extra €400 in rent means around an extra €200 into your back pocket...not a bad thing in other words!

The Minister for Finance needs to make the system fairer for landlords. A reversal of the "75%" abomination in respect of interest would be a start.

The reversal of the 75% abomination- is one thing.
I'd argue equally as ferociously- that interest on debt should never- for any business- regardless of the sector its in- be allowable as a cost before determination of taxable income. I'd argue that this should be to the fore in international tax negotiations- the global corporations have been manipulating transfer pricing- and intercompany lending for decades- to get around paying their fair tax share. The amount of corporate debt in Ireland- is staggering- if you factor it into our figures- the Irish are officially, per head of population- the second most indebted people on the planet (after the Japanese).

Alongside how it allows companies and businesses to manipulate their tax- it also gives bosses (and in the case the residential property sector- landlords) a perverse incentive to load up as much debt as possible on companies- sure why not- servicing it is entirely tax deductible.

Looking outside of the residential property sector for a prime example- we have the manner in which the Ontario Teachers Pension Fund- were allowed buy the Irish National Lottery- by lending the company they created to hold the Irish National Lottery funds at an annual coupon of >10%- when they were able to borrow the funds at what was seen as a price of 1.86% at the time. I.e. they were allowed to finance the purchase with debt- payable to themselves- to a company- which is structured in such a way that it'll never make a profit- but will provide a pension fund with an annual cash flow valued at over 9% on the money they invested in it.

I'm sorry- but that sounds criminal to me..........

Look at another Irish example- the Clery's closure- where all the assets were moved to a holding company which was loaded with debt- the actual trading company had no assets- and the holding company had its assets stripped bare- the final act being a decision to divest of the property itself for whatever they could get.........

Why do we imagine that the REITS are going to act any differently- when the average 14% return they are currently getting- declines to 'normal' levels (internationally 'normal' would be 7-8%- not a bad return in anyone's books- but well outside of what the REITs have come to expect as their entitlement in the Irish market).

The figures are stacked against a restructuring of the market- in a manner which is equitable to tenants- or landlords who try to pay down their debts- and its not unique to the residential property letting market- the same arrangements are mirrored in other sectors- and are considered the norm internationally- and indeed an entitlement by many of the multinationals.

The Economist have hosted a number of discussions on just how distorting the allowance of debt as a cost before taxation is- several times- but twice in the last 12 months- and dedicated one of their weekly magazines to a special report on it. The consensus is that it cannot be tackled in a particular sector- or a particular country- it has to be tackled internationally- and without exceptions for special interests...........

Just imagine it- people borrow money- with the expectation that they actually have to pay it back. It seems like common sense- however, logically- it doesn't make sense- why the hell would you repay your debts when you're dissipating your largest possible tax deduction- interest on that debt- by doing so?

As Ripley's 'Believe it or not' used open back in the 70s- sometimes fact is stranger than fiction.......... In the property sector- it certainly is.

Shawn Michaels

A good post. But it's unfair to compare arm's length debt from a bank and synthesised corporate debt.

The interest on the mortgage is a legitimate cost of having the property.

The_Conductor

Shawn Michaels wrote: »

A good post. But it's unfair to compare arm's length debt from a bank and synthesised corporate debt.

The interest on the mortgage is a legitimate cost of having the property.

Its not really unfair- the REITs- who are the largest purchasers of residential property in the country- and the largest landlords in the country- are financed over 98% with debt- and are the determinants of rental levels in the Dublin and Cork areas (and to a lesser extent Galway/Waterford/Portlaoise and a few other areas).

The largest owner of recently available rental property- is financed almost entirely with debt- and is determining rental levels- in the knowledge they can pretty much get whatever they want- thanks to scarcity in the market.

Shawn Michaels

The_Conductor wrote: »

Its not really unfair- the REITs- who are the largest purchasers of residential property in the country- and the largest landlords in the country- are financed over 98% with debt- and are the determinants of rental levels in the Dublin and Cork areas (and to a lesser extent Galway/Waterford/Portlaoise and a few other areas).

The largest owner of recently available rental property- is financed almost entirely with debt- and is determining rental levels- in the knowledge they can pretty much get whatever they want- thanks to scarcity in the market.

But the big difference is that iRes, as I understand it, does not pay Irish tax on its rental income, whereas I do.

April 73

The_Conductor wrote: »

Lets put a few myths to bed here.

1. There is a perverse incentive to keep debt on rental properties as high as possible. The interest on debt associated with rental properties- is the major cost that many people have that is deductible (at 75% of total) as an allowable cost.

2. A form 11 declaration (rental income) as an addendum to a tax return- is taxed at the declarants marginal rate of tax- and subject to full levies- i.e. potentially its subject to 53-54% tax.

3. Suggesting landlords will 'use the good times' to pay down loans on property- while paying up to 53-54% tax- and somehow stimulate the economy through increased local expenditure (by the landlord) just doesn't add up.

4. Most recent large scale landlords- think the REITs etc- are structured in such a manner that they maximise their rental income- and in many areas are the price determiners- while at the same time often pay no tax whatsoever- unlike your small scale landlord with their 53-54% tax. Many tenants prefer to rent units from the REITs- as the 'professional' landlords are often perceived as better for tenants. However- there is no human element there- while they follow the letter of the law- there is no give and take- its all black and white. These 'landlords' are very poor for the Irish economy- pay very little tax- and are no in things for the long term.

5. The issues in Dublin and the hinterland servicing Dublin (think Wicklow, Kildare, Meath, Louth etc) are well documented. Cork has recently been hitting the radar. Galway and other regional cities and towns- don't really feature in the national media- but things are just as bad there.

There has to be an equitable treatment of tenants- and landlords- by all parties- however, the elephant in the corner of the room that is keeping very very quiet- is of course the Revenue Commissioners. On the one hand- there is now a Division with 2 sections dealing specifically with Landlords and crucifying those who try their utmost to exercise their business in a prudent manner- on the other- the Irish public has been sold the idea of selling off thousands of units to REITS- as some sort of a panancea to our housing ills- when in fact they are driving up rents- and paying little or no tax at the same time.

If a landlord/tenant relationship is a business relationship- akin to any other relationship- it *needs* to be recognised as such- by all parties- and treated as such by all parties- including the Revenue Commissioners. The list of inequities in the tax code is startling- however- those who are being most unfairly treated- are tenants- and compliant landlords who try to prudently pay down their debts (alongside the PAYE employees in the country- who are being raped by the Revenue Commissioners on a daily basis).

The current legislation- is lopsided- and doesn't work. Safeguards designed to protect tenants are being abused by a small cohort- while disputes are adjudicated on in a reasonable timeframe- none of the judgements are enforceable- which is laughable- it doesn't protect tenants or landlords- property, reputation- or the right to a roof over people's heads.

The issue at the knux of all of this- from every possible perspective- is a lack of supply- where people want to live. Limited supply- is driving house prices and rental prices- and the tax regime- is driving many landlords out of the market. Meanwhile- several different categories of property have been removed from the market (with the best of intentions)- however nothing replaced them.........

Its a cascade effect- going back over the past 15 years- a portion of which relates to continuing bad debts on bank and lenders books- which is impeding their capital ratios (which have increased by more than double to 13%) so- other than on completely irrational lending loan rates (15% p.a. and higher) they refuse to lend to developers- which in turn feeds into the cycle of scarcity.

The property market- is a complete ecosystem in its own right- every section of it and the participants in each section- have an impact on one another- and on other sectors of the economy. Tinkering with one aspect of the equation- without looking at both the downstream and upstream segments- creates an imbalance. So- if we give tenants some sort of a rental tax credit- but don't do anything without supply- you simply have more spending capacity chasing the same limited stock of housing. If we don't treat all landlords in an equitable manner- you have one class of landlord actively doing their best to leave the market (admittedly the CAT exemptions have expired- however, even that is secondary when gross income is taxed at up to 53-54%). REITS- and their non-tax paying structures- don't help anyone- they want as much money out of the system asap- they view large scale developments as milk cows- to be milked to the fullest possible extent.

At the knux of all of this- has to be the question- should the rental of residential housing be treated as any other business- or should special rules apply- outside of those under which normal business operates (which I'd argue would have to include the abolition of the treatment of borrowing interest as an allowable cost- for absolutely all concerned- as its the ultimate perverse incentive to load up property with debt). Should tenants have some sort of a tax credit- perhaps- however- it has to be structured in such a way that it doesn't simply drive prices higher. Should the REITS be forced to pay tax- in a similar manner to any other landlords- hell yes, they should. Should banks be forced to recognise and deal with all delinquent loans- sigh, yes, they should.........

Someone, somewhere- needs a large wall- they need to map out the various elements of the market- in a visual manner- with linkages between the various causes and effects- properly identified- and if an entirely new regimen is not implemented- actions have to be targeted in such a manner to get maximum impact for effort- but with full cognisance of how those actions impact on all participants- and the broader economy as a whole.

There's a lot of good stuff in here. We use a whiteboard wall in work similar to the suggestion at the end of the post. It's a great visual help to see where we are & where we are going.

The entire post should be sent to Simon Coveney.

hytrogen

Field east wrote:

Daft.ie seems to be the official guide re levels of rent annual increases, regional differences, etc . But I am unclear as to what rent exactly is it talking about. I thought that the logical way of reporting rent is rent per person per accomodation type. It seems to me that Daft - and other sources - are referring to the rents being charged for all types of properties , lumping them all together and giving one figure , for example ,over €1000 per month for Dublin for April. They do not differentiate between , for example, between two and three bedroom houses, apartments suitable for one person, studios suitable for one person, studios suitable for two people. Etc. the PRTB has all this information but has decided not to publish it to date.

It's a bit daft how they've set themselves as bench markers and analysts recently.
I would air on the side of caution when reading any daft report as they're primary income is based on advertising. What drives advertising? Clickbait therefore I would say they are no more than spin doctors inflaming the whole situation. Equally myhome.ie and several other property advertising sites are no better judgement.
While they may be able to highlight trends there is always a limelight bulb in some corner of the media ready to be shown.

The_Conductor wrote:

Its not really unfair- the REITs- who are the largest purchasers of residential property in the country- and the largest landlords in the country- are financed over 98% with debt- and are the determinants of rental levels in the Dublin and Cork areas (and to a lesser extent Galway/Waterford/Portlaoise and a few other areas).

+1
And again going on my point above they probably love the spin doctoring media hype this situation is getting.
Any of their investors will see the good / bad situ here and dump all their savings on this foreign gamble after "doing their research" salivating at the allure out of pure greed and desperation after the last crash in the market.

The_Conductor

Shawn Michaels wrote: »

But the big difference is that iRes, as I understand it, does not pay Irish tax on its rental income, whereas I do.

Exactly.
The manner in which its structured- allow them to do just this.
And their debt is 100% deductible against their taxable income.
The fact that they are in the residential property letting market- is purely coincidental- and the debt is not associated with the property- its associated with the REIT itself- so come what may- you're not going to get a pound of flesh from them.

This is inherently unfair to other landlords- and indeed- of course- the Irish taxpayer.

Yet- the best manner of hoovering up this inequity- is not to turn to those who can't use an umbrella like this to shield their rental income- and up their allowable interest on debt to 100%- but I would argue to make it an imperative that every borrower- every single borrower in every single sector- should be better off paying back their debt. The current system is perversely incentivising companies, organisations, REITs and individuals- to load up as much debt as possible- and not pay it back.

This inalienable truth- seems to have escaped everyone's attention.

The solution is not to grant yet another group the financial right to manipulate chicanery to minimise their tax- while simultaneously crippling those who are both prudent and honest with their tax affairs- its to create a level playing field- in such a manner that all landlords (and indeed other businesses) pay reasonable levels of tax- and are not perversely rewarded for loading debt into companies and other vehicles (such as REITs).

The ultimate looser in all of this- is the poor Irish tax payer- who is lumbered with picking up the slack because our tax code makes them far easier a target than it does the REITs and other parties..........

Tenants cannot afford current rents (never mind higher rents). Multinationals cannot afford to financially compensate employees. This factor alone is already driving jobs from our shores- and this is as an aside from the lack of supply in the market (there are ways around the lack of supply- such as the houseshares that Twitter and Intel are currently trying to get employees to consider).

Meddling in the market- is always fraught with unintended consequences- hell, thats why its called the law of unintended consequences. This is why we need people who can accurately do the physical equivalent of a mind map to depict how the various aspects of the market and various interventions on them- impact on one another.

Picture a wall- featuring all the vested parties- tenants, landlords, local authorites, the Revenue Commissioners, the Irish tax payer, developers etc- and how they interact with one another. Map how possible interventions will affect each of these in turn. Go downstream- what are their responses to various scenarios. Can you choose the more favourable scenarios- and encourage those at the outset. Can you try to figure what the worse possible outcomes might be- of particular courses of actions- put them down- worse case scenarios- can you mitigate against them- can you build in a response at the outset. You need a complex interaction map of the whole sector- along a good indicator of what tools are in your arsenal- how you can deploy them- and how you can shield from the downsides associated with them (and every action will most certainly have a downside).

Alongside all of this- you do not want to get bogged down in consultations with the various interest groups- you need to know what their opinions are- but you do not want the tail to wag the dog.

Are there sacred cows that you cannot sacrifice- no matter how stupid they are- for whatever reason, political or otherwise? Are there parties to whom you are subordinate- despite your remit (such as the Revenue Commissioners)? Are there goals that cannot be forfeit for the greater good- deliverables that may impede longer term aspirations?

The time for fluffy woolly words rather than action or deeds- passed a long time ago.

The time has come to look at what the greater good is- and to communicate what is happening, factually- without spinning a yarn- as various actions are implemented.

There are going to have to be decisions made that will make some people unhappy. Thats life. We can't be Mr. Nice to everyone- we *need* to get a job done- and if that job is done- at the end of the day- perhaps those whose noses are put out of joint as part of the journey- may be more forgiving in reflection when the bigger picture becomes apparent.