Media: Rents at all-time high, supply all-time low - RTE

The_Conductor

https://www.rte.ie/news/2017/0822/899045-daft_rents/

First of all- to clarify- the report is a DAFT report, by Ronan Lyons, which is specifically dealing with properties available to rent- and the rent levels sought for these properties- it is not about the rent being paid by tenants in pre-existing tenancies, or the absolute number of pre-existing tenancies.

Also- despite it highlighting that only 3,000 properties are available to rent nationally- an all-time low- it doesn't reference the fact that the actual number of properties let- is at an all-time high (as per registered tenancies with the RTB).

The major issue highlighted in the report- and in the interview Ronan gave on Morning Ireland this morning- is the appalling failure of the government to deliver on supply.

Ronan reckons we need 18,000 units annually in Dublin- of which 5-6,000 units should be social housing housing units. This seems like a fair and reasonable assessment.

The government is in the corner on a soapbox- preaching how they have spent 3.6 billion on housing from an earmarked fund of 5.8 billion- which while its true- is missing the point entirely- we have a supply issue- the government- while throwing money at the issue- is, through its policies, exacerbating the supply issue- and is not going to acknowledge this under any circumstance.

beauf

They have outsourced the blame for it to everyone else.

jamesthepeach

The_Conductor wrote: »

https://www.rte.ie/news/2017/0822/899045-daft_rents/

First of all- to clarify- the report is a DAFT report, by Ronan Lyons, which is specifically dealing with properties available to rent- and the rent levels sought for these properties- it is not about the rent being paid by tenants in pre-existing tenancies, or the absolute number of pre-existing tenancies.

Also- despite it highlighting that only 3,000 properties are available to rent nationally- an all-time low- it doesn't reference the fact that the actual number of properties let- is at an all-time high (as per registered tenancies with the RTB).

The major issue highlighted in the report- and in the interview Ronan gave on Morning Ireland this morning- is the appalling failure of the government to deliver on supply.

Ronan reckons we need 18,000 units annually in Dublin- of which 5-6,000 units should be social housing housing units. This seems like a fair and reasonable assessment.

The government is in the corner on a soapbox- preaching how they have spent 3.6 billion on housing from an earmarked fund of 5.8 billion- which while its true- is missing the point entirely- we have a supply issue- the government- while throwing money at the issue- is, through its policies, exacerbating the supply issue- and is not going to acknowledge this under any circumstance.

Who is going to buy these properties now to rent them out?
Any investor would be mad now to invest in the current pro tenant, anti landlord legislation ridden Ireland of today.
Possibly REITs if they don't have to pay tax I suppose.
But while landlords are being forced out, the other side of that is that no more will be attracted in.

So unless the government is going to buy all the houses and rent them out to people nice and cheap, I don't know how rental supply will increase no matter how many you build. Oh yes, they will probably just make the pensioners give over their houses to the rental market instead.

The_Conductor

beauf wrote: »

They have outsourced the blame for it to everyone else.

That's what politicians do- blame someone else- and when that doesn't work- use the old Roman idiom of divide and conquer. Hell, if works, why change their gameplay..........

It suits the government to have a bogeyman in the corner- who they can heap whatever manure that needs to be dolloped at..........

In related news- Dublin City Council, Dunlaoghaire Rathdown, South Dublin Co. Co. and Fingal Co. Co. - turned down planning applications for over 200 multi unit developments this year thus far, featuring over 7000 dwellings. Over 20 of the refused applications were for student halls- in the immediate vicinities of the major universities.

Sigh........ I'm getting old. Why does all of this sound so damn familiar..........

angiogoir

Allow high rises. In all areas. Especially in leafy south Dublin. Problem solved.

Den14

jamesthepeach wrote:

So unless the government is going to buy all the houses and rent them out to people nice and cheap, I don't know how rental supply will increase no matter how many you build. Oh yes, they will probably just make the pensioners give over their houses to the rental market instead.

jamesthepeach wrote:

Who is going to buy these properties now to rent them out? Any investor would be mad now to invest in the current pro tenant, anti landlord legislation ridden Ireland of today. Possibly REITs if they don't have to pay tax I suppose. But while landlords are being forced out, the other side of that is that no more will be attracted in.

You are spot on there. I think it's just amazing how what you've just said never seems to be raised in the media. Typical one sided rubbish from them!

Dravokivich

angiogoir wrote: »

Allow high rises. In all areas. Especially in leafy south Dublin. Problem solved.

High rise isn't the answer if it's gonna be high rise shoe boxes.

jamesthepeach

angiogoir wrote: »

Allow high rises. In all areas. Especially in leafy south Dublin. Problem solved.

How will they reach the rental market?
I'd say builders are sh1tting themselves now.
All these plans to build and Noone to buy them.
You have to reduce the price significantly to a significant number of owner occupiers into the affordability range.

Anyone with money to spend for investment on rentals won't be spending it on Irish properties for sure. Squeeky bum time for the builders again.

Sierra Oscar

I don't see rent prices stabilising, let alone dropping, any time soon. We simply aren't seeing the supply of housing needed to bring us back to a properly functioning market. 2,076 homes were built in 2016 and the Government itself admitted that at least 15,000 needed to be delivered. The situation hasn't exactly improved all that much this year either.

I reckon there will be a big increase in rents next year as we approach the end of the two year window for rent freezes. The Government had hoped that the supply of houses would have increased significantly by the time the rent's were up for review hence negating the impact of rent rises. That hasn't happened. Danger here.

Dravokivich wrote: »

High rise isn't the answer if it's gonna be high rise shoe boxes.

There's also the problem of infrastructure - you can't just start approving high rise developments over night. You need the supporting infrastructure in place to allow high rise - water, sewage, electricity, broadband, public transport etc all need to be factored into planning.

Mrs Shuttleworth

jamesthepeach wrote: »

Oh yes, they will probably just make the pensioners give over their houses to the rental market instead.

I know there's another thread running on this, but it's completely impracticable and I know from first hand experience and the following has not been noted.

An elderly person going into a nursing home - that is not merely the end of the matter. They veer in and out of hospitals and their own home in spite of being formally admitted under Fair Deal and often can pass away quite quickly - literally a few months - after going into long term care. The house then becomes the subject of probate/sale so there isn't any real long term security of tenure for a tenant going in. Unless the Government plans that executors of elderly persons estates will also get screwed.

Michael D Not Higgins

With such limited supply and surging demand, the only thing that will happen is more overcrowding. We're going to see more ads with bunk beds and sharing rooms in order to cope.

beauf

jamesthepeach wrote: »

Who is going to buy these properties now to rent them out?
Any investor would be mad now to invest in the current pro tenant, anti landlord legislation ridden Ireland of today.
Possibly REITs if they don't have to pay tax I suppose.
But while landlords are being forced out, the other side of that is that no more will be attracted in.

So unless the government is going to buy all the houses and rent them out to people nice and cheap, I don't know how rental supply will increase no matter how many you build. Oh yes, they will probably just make the pensioners give over their houses to the rental market instead.

I expect more LL will try to get out of it now before the Govt locks them into it.

Askthe EA

beauf wrote: »

They have outsourced the blame for it to everyone else.

They were also warned. They didnt listen. We now have to pay for their incompetence and pig headedness.

The_Conductor

jamesthepeach wrote: »

Who is going to buy these properties now to rent them out?
Any investor would be mad now to invest in the current pro tenant, anti landlord legislation ridden Ireland of today.
Possibly REITs if they don't have to pay tax I suppose.
But while landlords are being forced out, the other side of that is that no more will be attracted in.

So unless the government is going to buy all the houses and rent them outto people no e and cheap, I don't know how rental supply will increase no matter how many you build.

Obviously this argument hasn't occurred to the Minister.
The whole system is a series of knee-jerk reactions- rather than a coordinated response, cognisant of the bigger picture. Occasionally- the baying hordes at kept away- by sacrificing a few more landlords to the media- however, this cannot be viewed by anyone as a manner of dealing with what is a national crisis.

Wholly aside from the homeless issue- our housing problems have been cited by 7 different financial institutions as the reason they moved units to Amsterdam, Luxembourg or elsewhere- rather than Dublin- and yet, even with multinational companies screaming at us- the various Ministers very obviously aren't talking to one another............

Sigh.

sk8board

One important point regarding the tenancies being at an all time high - this is only a measure of the tenancies registered with the RTB, who are finding and registering 20-25k unregistered landlords annually, according to their annual reports (25k solicitors letters sent out last year alone).
It's not necessarily a reflection of there being more actual houses being rented than before.

jamesthepeach

One of the predicted effects of rent control was that people stay put reducing supply even more.
That's happening too.
Rent control never works. Ever.

beauf

I think its to force up the price of housing to encourage funds to invest in Ireland. Likewise the squeezing for small LL out of the market for large scale LLs.

Everything else is smoke and mirrors to deflect attention from this. Its been going on for over a decade.

jamesthepeach

sk8board wrote: »

One important point regarding the tenancies being at an all time high - this is only a measure of the tenancies registered with the RTB, who are finding and registering 20-25k unregistered landlords annually, according to their annual reports (25k solicitors letters sent out last year alone).
It's not necessarily a reflection of there being more actual houses being rented than before.

I got a letter from them last month. But the property is short term now, so I just ignored it.
They'll probably send me another one.

Mrs Shuttleworth

jamesthepeach wrote: »

One of the predicted effects of rent control was that people stay put reducing supply even more.
That's happening too.
Rent control never works. Ever.

You are correct. My tenant is leaving end September and I've decided having considered all options to formally exit the market for two years. I may move back in as my PPR as I'm currently living with someone else in their solely owned house.

sk8board

jamesthepeach wrote: »

I got a letter from them last month. But the property is short term now, so I just ignored it.
They'll probably send me another one.

Very good point - I'd forgotten about previously registered tenancies

The_Conductor

Sierra Oscar wrote: »

I don't see rent prices stabilising, let alone dropping, any time soon. We simply aren't seeing the supply of housing needed to bring us back to a properly functioning market. 2,076 homes were built in 2016 and the Government itself admitted that at least 15,000 needed to be delivered. The situation hasn't exactly improved all that much this year either.

We *need* 18,000 residential dwellings in the greater Dublin area per annum- of which 5-6,000 should be social housing units. We also need a net increase of 7-8,000 additional units nationally. This is to stand still. In 2016- we delivered 16,200 units- which while its a massive ramp-up in the right direction- we now simply don't have the construction workers to build more units- or local authorities willing to countenance solutions such as high density units and height restrictions. We have to get over this preciousness.

Sierra Oscar wrote: »

I reckon there will be a big increase in rents next year as we approach the end of the two year window for rent freezes. The Government had hoped that the supply of houses would have increased significantly by the time the rent's were up for review hence negating the impact of rent rises. That hasn't happened. Danger here.

Almost 70% of all residential tenancies are in RPZs- presuming these are all increased next year on the elapse of the 2 year standstill- the max increase is 4% initially- and 4% per annum thereafter. This is not the massive increases that the DAFT report is featuring- which is rent on new tenancies. The feature of the market that they are not reporting on- is the manner in which tenancies are lengthening the whole time- so while the average tenancy was 3.2 years in 2010- in 2016 this had increased to 5.8 years. I.e. tenants are not moving in the manner they once used to.

Yes- there will be increases- however, the RPZs will negate a lot of the increases people are expecting- and the DAFT report- which is being latched onto by Threshold and other bodies- is a bit of a red herring- as it only relates to new tenancies, and not pre-existing tenancies.

Sierra Oscar wrote: »

There's also the problem of infrastructure - you can't just start approving high rise developments over night. You need the supporting infrastructure in place to allow high rise - water, sewage, electricity, broadband, public transport etc all need to be factored into planning.

We have some councils gone giddy on issuing planning permissions- which have in the name of sanity, had to be shot down by the Minister- Kildare Co. Co. immediately comes to mind in this respect.

Its all well and good pointing to access to critical infrastructure- which is obviously necessary- however, you also have to look at specific areas and how they would be affected by massive development. I'll be the first person to call for a massive increase in supply- however, sticking another 800 low density houses in Sallins- for example- who on earth came up with that nutty notion?

There is *no* joined up thinking happening- period.

DubCount

The_Conductor wrote: »

There is *no* joined up thinking happening- period.

This one line sums up why we have a problem with housing. There is no point addressing one piece of the jigsaw and doing noting about the other pieces. All we are going to get is more media/politician rambling about getting more rent controls, more tenants rights and more government market interference which is doing nothing to help.

Why does anyone think that 10% growth in the asking prices for new properties is not attracting in more investors? Does nobody want improving yields? Its time to wake up and understand that we have a choice between making the business of residential letting more attractive to landlords, or we have a lot more rental inflation to see yet.

My views, for what they are worth are:
1) we need to address the time and cost involved in evicting a non-paying or overholding tenant. The private rental market will never function properly until this is addressed.
2) The government should look to provide social housing directly, in stead of expecting the private rental market to provide it. The government should build and manage their own social housing stock - like the good old days.
3) The entire property market is over-regulated. Building regulations make building reasonably priced housing impossible. Red tape delays and stops supply to the market and pushes up the cost of units which do make it to the market.

I'm struck by the media coverage of the last 2 days. Yesterday we had FLAC on the news gloating about taking a private landlord for 40k plus costs for discriminating against HAP tenants. Today we have tears because we have a shortage of rental supply and prices going up because of of a lack of supply. Does nobody get the fact these are related? In the next year, how many landlords will have a vacant property that they can only advertise for well below market rate. when the 200+ expressions of interest come in and they can only choose 1 to be a tenant, how may discrimination cases will they face because they didn't choose tenant A who is black, or tenant B who is gay or tenant C who is Jewish, or tenant D who is on HAP or....... Sure its easier to just sell up or move to AirBnB letting. There are just easier ways to make money.

yosser hughes

angiogoir wrote: »

Allow high rises. In all areas. Especially in leafy south Dublin. Problem solved.

You're assuming the government see this as a problem.
They really don't.

quadrifoglio verde

We've undeveloped land from adamstown as far back as hazelhatch. It is ideal for building new towns of the future.
Plenty of space either side of the tracks for infrastructure such as roads as well as plenty of room for housing.
The only problem is a developer would need his head examined to go in there. The investment in infrastructure that is needed before you could sell one house would be astronomical.
Probably why most of the developments appear to be infill.

The biggest issue is that we've had what 8 years of very little infrastructure investment. Everything from social housing to water to public transport has been ignored. There was no option but to ignore it and get the books balanced but the consequences of that now have to be dealt with.

Wanderer78

Askthe EA wrote:

They were also warned. They didnt listen. We now have to pay for their incompetence and pig headedness.

They were indeed warned, people like Ronan and Tom Lyons have been writing about this for almost 10 years now. I now class this as a morality issue, we have decided it's morally ok to allow thousands to become homeless and possible thousands more to follow over the coming years, all while we call ourselves a 'wealthy' nation. It's time for us to do some deep sole searching as a country!

quadrifoglio verde wrote:

The biggest issue is that we've had what 8 years of very little infrastructure investment. Everything from social housing to water to public transport has been ignored. There was no option but to ignore it and get the books balanced but the consequences of that now have to be dealt with.

I'd have to agree with Australian economist Steve keen in that, we really need to get over this idea of balancing the books, it's doing great harm to our country's when there's no clear benefits by doing so. I'd also agree with Joe stiglitz, in that, 'contractionary policies such as austerity, are indeed contractionary'! Our politicians and their advisers are clueless, dangerous in fact.

Askthe EA

Wanderer78 wrote: »

Our politicians and their advisers are clueless, dangerous in fact.

Something we can all agree on!!

MayoSalmon

Wanderer78 wrote:

I'd have to agree with Australian economist Steve keen in that, we really need to get over this idea of balancing the books, it's doing great harm to our country's when there's no clear benefits by doing so. I'd also agree with Joe stiglitz, in that, 'contractionary policies such as austerity, are indeed contractionary'! Our politicians and their advisers are clueless, dangerous in fact.

No clear benefits? Greece have virtually been in a recession for 10 years now and who knows for how much longer.

The_Conductor

MayoSalmon wrote: »

No clear benefits? Greece have virtually been in a recession for 10 years now and who knows for how much longer.

For the record- Greece's economy grew in each of the last 2 quarters- and only yesterday, their sovereign debt rating was increased to 'B'- firmly away from the junk status at which it has traded in the not so distant past........

Askthe EA

The_Conductor wrote: »

For the record- Greece's economy grew in each of the last 2 quarters- and only yesterday, their sovereign debt rating was increased to 'B'- firmly away from the junk status at which it has traded in the not so distant past........

I sense a major swerve off topic!!! ;-)

The_Conductor

Askthe EA wrote: »

I sense a major swerve off topic!!! ;-)

+1 - and no prizes to anyone who guesses what my day job is........

Back on topic please (myself included!)

quadrifoglio verde

Wanderer78 wrote: »

I'd have to agree with Australian economist Steve keen in that, we really need to get over this idea of balancing the books, it's doing great harm to our country's when there's no clear benefits by doing so. I'd also agree with Joe stiglitz, in that, 'contractionary policies such as austerity, are indeed contractionary'! Our politicians and their advisers are clueless, dangerous in fact.

Ah yes the money tree argument