Property Market 2018

mkdon

Wheres Me Jumper? wrote: »

all we do know for certain is that there is great uncertainty, which is bad for business.

true but what business? all will surely be affected in some way

Wheres Me Jumper?

mkdon wrote: »

true but what business? all will surely be affected in some way

i'm talking in general terms, but of course, there will be some people who do well out of it. that's the nature of entrepreneurialism after all.

Villa05

myshirt wrote:

A lot of money is going in to build to rent at the moment, the fabric of our housing market is changing and the persistent paying of 40-60% of take home is possible, and we could hit the ratio of 1 person per room needing to work. That f*cks over our average family unit now where there is circa 0.50 to 0.75 average industrial incomes per room, never mind those on low incomes who are plainly in a black hole it's near on impossible to get out of.

What you describe is a classic unsustainable bubble. Logic would suggest that it eventually bursts

sightband wrote:

The real effects of Brexit will take years to manifest, at least a decade in my opinion.

If it is a hard Brexit as appears to be the case at present, with the political impasse, There will be significant negative impact and you will know all about it by this time next year

LotharIngum

Should be lots (maybe thousands) of ex rental properties coming on the market next year. I wonder will that be enough to make a dent in prices.

mkdon

LotharIngum wrote: »

Should be lots (maybe thousands) of ex rental properties coming on the market next year. I wonder will that be enough to make a dent in prices.

thousands? do you have a source?

Moonjet

LotharIngum wrote: »

Should be lots (maybe thousands) of ex rental properties coming on the market next year. I wonder will that be enough to make a dent in prices.

I don't know what impact it would have on sale prices as all the tenants currently living in those rentals will still need somewhere to live.
It would probably however drive rental prices to even more insane levels than now, making buying a yet even more attractive option. My guess is it would stimulate price growth in the <400k market.

dor843088

Where are all these thousands of ex rentals coming from ?

mkdon

Moonjet wrote: »

I don't know what impact it would have on sale prices as all the tenants currently living in those rentals will still need somewhere to live.
It would probably however drive rental prices to even more insane levels than now, making buying a yet even more attractive option. My guess is it would stimulate price growth in the <400k market.

which could also cause emigration as cost of living is too high

The_Conductor

dor843088 wrote: »

Where are all these thousands of ex rentals coming from ?

New laws making it exceptionally difficult to evict a tenant under any circumstances and proposing to make a landlord pay any departing tenant a 6 month rent lumpsum as compensation for disrupting their family life............

Any landlords that I know (and I do know a few) are rushing to clear properties- asap before they get caught up in the new legislation.

Whether it comes to pass or not- remains to be seen- however, as it stands- the proposed legislation is unique in the manner in which it imparts rights on tenants and removes property rights from landlords.

A few people in this forum who wish to maintain an exposure to the sector- are selling up any units they hold- and buying shares in REITs instead.

L1011

I personally can't see the outflow being quite as high as expected. Not every tenancy will be in a state to end at the same time; rentals are often fairly clustered and frequently not the best maintained (either due to the tenant or the LL) and you could end up with multiple poorer condition properties suddenly appearing in a small area. There are only certain types of buyer who are willing to do up those type of properties. If you can't sell it quickly or for a suitable value some LLs will just hang on.

I'd know which houses in my estate are rented and which aren't (residents association) and there has been a very minimal number of sales of them over the past few years; the bulk of those that were sold were student 9/10 month lets which are being hammered by mass student accomodation being built. About 20% of the development are rentals; so I'll see quite quickly if I'm wrong!

Wheres Me Jumper?

The_Conductor wrote: »

New laws making it exceptionally difficult to evict a tenant under any circumstances and proposing to make a landlord pay any departing tenant a 6 month rent lumpsum as compensation for disrupting their family life............

Any landlords that I know (and I do know a few) are rushing to clear properties- asap before they get caught up in the new legislation.

Whether it comes to pass or not- remains to be seen- however, as it stands- the proposed legislation is unique in the manner in which it imparts rights on tenants and removes property rights from landlords.

A few people in this forum who wish to maintain an exposure to the sector- are selling up any units they hold- and buying shares in REITs instead.

don't forget this bill was proposed by Paul Murphy. Hardly a champion of the "landlord classes" as he refers to them.
personally, i dont see the Dail ever passing it, as apart from the bill being a People Before Profit bill too many FG/FF TDs own rentals themselves.
the Govt. is due to propose its own legislation in the New Year, so personally i will be paying more attention to that than to Murphy's leftie lunacy.

The_Conductor

Wheres Me Jumper? wrote: »

don't forget this bill was proposed by Paul Murphy. Hardly a champion of the "landlord classes" as he refers to them.
personally, i dont see the Dail ever passing it, as apart from the bill being a People Before Profit bill too many FG/FF TDs own rentals themselves.
the Govt. is due to propose its own legislation in the New Year, so personally i will be paying more attention to that than to Murphy's leftie lunacy.

The 'landlord classes'........ sigh.........
Its estimated that over 40% of all units on the market are the sole property owned by a person- who in turn is renting elsewhere.......... (RTB spokesperson on Morning Ireland). If this is the case- perhaps a significant number of people might simply move back into their own property?

Once upon a time you could offset rental income against rental outgoings. There were a number of representations to the Minister to reinstate this scheme- however, thus far, its come to nought.

The fact of the matter is the pace of landlords abandoning the sector is increasing- and they are not being offset by new landlords entering the sector. The 2018 RTB annual report (due next July) should make interesting reading- I suspect the pace is even higher than reported in the media- given recent off-the-cuff comments by both the RTB and the Minister.

Cuddlesworth

L1011 wrote: »

I personally can't see the outflow being quite as high as expected. Not every tenancy will be in a state to end at the same time; rentals are often fairly clustered and frequently not the best maintained (either due to the tenant or the LL) and you could end up with multiple poorer condition properties suddenly appearing in a small area. There are only certain types of buyer who are willing to do up those type of properties. If you can't sell it quickly or for a suitable value some LLs will just hang on.

I'd know which houses in my estate are rented and which aren't (residents association) and there has been a very minimal number of sales of them over the past few years; the bulk of those that were sold were student 9/10 month lets which are being hammered by mass student accomodation being built. About 20% of the development are rentals; so I'll see quite quickly if I'm wrong!

We have the highest rents ever nationwide, so highest demand.
We have a roughly 35:65 split in the state for rentals/owners.
We added roughly 20k houses this year.
So we should see around 7k additional RTB tenancy's registered this year in a functioning market.

The_Conductor

Cuddlesworth wrote: »

We have the highest rents ever nationwide, so highest demand.
We have a roughly 35:65 split in the state for rentals/owners.
We added roughly 20k houses this year.
So we should see around 7k additional RTB tenancy's registered this year in a functioning market.

We don't have a functioning market- and the more the government intervene the less functional the market is........ The REITs are adding units in the sector, yes, however- where formally BTL purchasers comprised up to 40-45% of the market- now, they're a smidgen over 7%.

Stock is moving from the BTL market- to the owner occupier market- and is not being replenished. This is a structural change- proportionally, the rental market is moving away from landlords who own 1-2-3 units- towards multi-unit landlords, more often than not of the REIT flavour- while simultaneously units are moving from the rental to the owner sector.

In an environment where rental units are not being satisfied- but we're heading ever closer towards normal supply levels in the owner occupier market- this is represented by increasing rents- but a leveling off in achieved prices in the market for selling prices. This is happening. If we had a normal sector- people would pile into the sector- to leverage the rental yield- however, the current regulatory regime is such that far from people piling in to leverage rental yields- the exodus to the door is increasing- despite the undeniably high yields out there.

Into this mess- the proposals are to further hamstring landlords and act in such a manner that property rights are further reduced- and the regulatory regime is stacked further in favour of tenants and against landlords.

There needs to be some equilibrium- even a policy where delinquent tenants were expeditiously evicted- would help- however, and despite claims to the contrary- regaining a property from a tenant who either destroys the property or overholds without paying rent- has increased to average 26 months- where 3 years ago it averaged 22 months (according to the RTB).

I'm asking the question, somewhat in cheek, why anyone would want to be a landlord- the answer is- even now- if a good tenant finds a good landlord- there is absolutely no reason for them not to have a nice business relationship with one another that suits both parties- however, if the situation deteriorates for any reason- the regulatory regime should be there to support whichever party finds itself more sinned against than sinning- however, that is not the system we have............. Aka- all is good- until its not good- then you're screwed.

dor843088

Would it be fair to say that houses are disappearing from the rental sector ( small time single property ll etc ) and being replaced by apartments ( reits etc ) ? Anyone see this as having any significance?

Wheres Me Jumper?

dor843088 wrote: »

Would it be fair to say that houses are disappearing from the rental sector ( small time single property ll etc ) and being replaced by apartments ( reits etc ) ? Anyone see this as having any significance?

for years (pre Celtic tiger) all i heard from some quarters was "if only we could get shut of domestic amateur LLs and replace them with foreign professionals"

well that is happening. perhaps tenants prefer handing their money over to foreign vulture funds. i dunno but part of me thinks they do. maybe it's Irish begrudgery at work.

now we've got 1,000s of homeless people and expect many more in 2019.

Be careful what you wish for...

The_Conductor

dor843088 wrote: »

Would it be fair to say that houses are disappearing from the rental sector ( small time single property ll etc ) and being replaced by apartments ( reits etc ) ? Anyone see this as having any significance?

The only thing which kept the RTB figures on an even keel at least in their 2017 annual figures- was the fact that they were including the Housing Associations and Local Authority figures in their stats for the first time. Nonetheless- this one-off exercise only had a very temporary effect on the RTB figures- to the extent that both the RTB and the Minister have both come out recently suggesting that future legislation should try to halt the exodus from the sector. For now- we're going to have to wait until the 2018 stats are published (6 months in arrears- in July 2019).

engiweirdo

Wheres Me Jumper? wrote: »

dor843088 wrote: »

Would it be fair to say that houses are disappearing from the rental sector ( small time single property ll etc ) and being replaced by apartments ( reits etc ) ? Anyone see this as having any significance?

for years (pre Celtic tiger) all i heard from some quarters was "if only we could get shut of domestic amateur LLs and replace them with foreign professionals"

well that is happening. perhaps tenants prefer handing their money over to foreign vulture funds. i dunno but part of me thinks they do. maybe it's Irish begrudgery at work.

now we've got 1,000s of homeless people and expect many more in 2019.

Be careful what you wish for...

We've had the Irish "get rich off your less well off compatriot" type LL's forever ow and they havent exactly worked a treat.

Vulture funds are their own kind of evil but people could at least see the advantages of not dealing with the crooked local garda/publican/teacher/accountant and their "investment property" :
Property kept up to correct standards and repairs carried out in a timely manner.

Rent as agreed in contract, no under the table surplus payments.

In keeping with previous point,annual increases only in line with what legislation allows.

Deposits placed in an escrow account and returned if property in suitable condition(seems to be a major issue with the local LL types).

dor843088

engiweirdo wrote: »

We've had the Irish "get rich off your less well off compatriot" type LL's forever ow and they havent exactly worked a treat.

Vulture funds are their own kind of evil but people could at least see the advantages of not dealing with the crooked local garda/publican/teacher/accountant and their "investment property" :
Property kept up to correct standards and repairs carried out in a timely manner.

Rent as agreed in contract, no under the table surplus payments.

In keeping with previous point,annual increases only in line with what legislation allows.

Deposits placed in an escrow account and returned if property in suitable condition(seems to be a major issue with the local LL types).

I'm not a LL but I would just say that for every crooked LL as you put it there is a crooked tenant. I'd prefer to have the opinion there are idiots on both sides but on the whole the vast majority of people just want a decent place to live / decent return on their investment and neither wants any hassle from the other. And what chance you have of a local LL having some compassion I'm certain a REIT will give zero f**s whatever the situation.

engiweirdo

dor843088 wrote: »

engiweirdo wrote: »

We've had the Irish "get rich off your less well off compatriot" type LL's forever ow and they havent exactly worked a treat.

Vulture funds are their own kind of evil but people could at least see the advantages of not dealing with the crooked local garda/publican/teacher/accountant and their "investment property" :
Property kept up to correct standards and repairs carried out in a timely manner.

Rent as agreed in contract, no under the table surplus payments.

In keeping with previous point,annual increases only in line with what legislation allows.

Deposits placed in an escrow account and returned if property in suitable condition(seems to be a major issue with the local LL types).

I'm not a LL but I would just say that for every crooked LL as you put it there is a crooked tenant. I'd prefer to have the opinion there are idiots on both sides but on the whole the vast majority of people just want a decent place to live / decent return on their investment and neither wants any hassle from the other. And what chance you have of a local LL having some compassion I'm certain a REIT will give zero f**s whatever the situation.

On the tenant side, the Irish Landlords I have encountered who were not greedy idiots have been by far in the minority. Bit of competition is no harm whatsoever.

DubCount

engiweirdo wrote: »

Bit of competition is no harm whatsoever.

We are light years away from a bit of competition in the Irish Rental market, and getting further from it by the day.

L1011

Cuddlesworth wrote: »

We have the highest rents ever nationwide, so highest demand.
We have a roughly 35:65 split in the state for rentals/owners.
We added roughly 20k houses this year.
So we should see around 7k additional RTB tenancy's registered this year in a functioning market.

Its quite likely that the majority of stock added to rentals will be REIT-owned apartments or other MUD (ground floor flat+walk up duplex townhouse-style for instance) though. There aren't going to be many semi-Ds coming on-stream from that source!

In the longer-term its unlikely that semi-Ds with gardens will be commonly built in city suburbs at all for land value reasons but they are still being built in large numbers and not being bought as BTL anymore really.

Topgear on Dave

In all my years renting I never came across "under the table surplus payments", but that was before rent controls etc and what ya seen on daft was what ya got generally.

Cuddlesworth

L1011 wrote: »

Its quite likely that the majority of stock added to rentals will be REIT-owned apartments or other MUD (ground floor flat+walk up duplex townhouse-style for instance) though. There aren't going to be many semi-Ds coming on-stream from that source!

In the longer-term its unlikely that semi-Ds with gardens will be commonly built in city suburbs at all for land value reasons but they are still being built in large numbers and not being bought as BTL anymore really.

I am only pointing that if the rental market as a whole was simply static or decreases slowly as implied by the government, rentals would be increasing roughly inline with the number of units hitting the market.

So when the RTB says that there was a 1800 loss in rental property's in 2017(I think), what is not being said is that with 14,500 new property's in 2017 there is really a loss to the rental market of roughly 6600 units. And its going to be worse in 2018.

There is clearly a serious exodus of landlords in the market(far more then being reported on) and the reasons are pretty obvious.

Zenify

https://www.thejournal.ie/irish-house-prices-2018-4416914-Dec2018/

New draft report is out.

Year on year increases but slowing down for Dublin. Dublin prices are down for last quarter as most people here have commented. One major point was that there is an increase of 40% in the housing stock in Dublin compared to this time last year, that's a very positive sign for the supply in the capital.

You can see the full report at the bottom of thejournal article.

mkdon

Zenify wrote: »

https://www.thejournal.ie/irish-house-prices-2018-4416914-Dec2018/

New draft report is out.

Year on year increases but slowing down for Dublin. Dublin prices are down for last quarter as most people here have commented. One major point was that there is an increase of 40% in the housing stock in Dublin compared to this time last year, that's a very positive sign for the supply in the capital.

You can see the full report at the bottom of thejournal article.

so your saying daft are saying prices increasing but at a lesser rate?

Sarn

It’s a good sign that the rate of increase in asking prices is slowing in some areas. How this is reflected in sale price is another thing. It’ll be interesting to see what effect new exemptions will have.

Zenify

mkdon wrote: »

so your saying daft are saying prices increasing but at a lesser rate?

They increased year on year, but if you look at it in quarters they rose for the first 3 quarters and dropped for the last. The last quarter is usually slower but not usually a drop. Sorry was probably not clear enough for you in my first post.

I Think it was TheConductor who mentioned it a long time ago that west Dublin had slowed down and he/she was spot on. West Dublin saw a decline for the whole year, not just the last quarter.

Rothmans

Zenify wrote: »

They increased year on year, but if you look at it in quarters they rose for the first 3 quarters and dropped for the last. The last quarter is usually slower but not usually a drop. Sorry was probably not clear enough for you in my first post.

I Think it was TheConductor who mentioned it a long time ago that west Dublin had slowed down and he/she was spot on. West Dublin saw a decline for the whole year, not just the last quarter.

I read an interesting article in the Sunday Independent which put forward the suggestion that this time around people are having the good sense not to buy in mass sprawling housing estates with poor transport and other infrastructure. However, it's problematic that much of the new housing in going in areas with the lack of such infrastructure, and as such it was suggested that much of the supply is being built in the wrong locations in Dublin. I think this point does have a lot of merit when you consider the fact West Dublin isn't seeing anywhere near the same growth in prices as the rest if Dublin. If i recall correctly average prices in south county Dublin are not too far off double West Dublin.
Furthermore, as has been said many times on this forum, price growth seems to be slowing in Dublin due to the lending rules of the central bank kicking in, which is no bad thing.
It's also interesting to see that price growth in other urban centres still seems strong, with Limerick city on almost 10% price growth, and Waterford not too far behind.

Mad_maxx

Rothmans wrote: »

I read an interesting article in the Sunday Independent which put forward the suggestion that this time around people are having the good sense not to buy in mass sprawling housing estates with poor transport and other infrastructure. However, it's problematic that much of the new housing in going in areas with the lack of such infrastructure, and as such it was suggested that much of the supply is being built in the wrong locations in Dublin. I think this point does have a lot of merit when you consider the fact West Dublin isn't seeing anywhere near the same growth in prices as the rest if Dublin. If i recall correctly average prices in south county Dublin are not too far off double West Dublin.
Furthermore, as has been said many times on this forum, price growth seems to be slowing in Dublin due to the lending rules of the central bank kicking in, which is no bad thing.
It's also interesting to see that price growth in other urban centres still seems strong, with Limerick city on almost 10% price growth, and Waterford not too far behind.

Limerick was still falling as late as early 2015 and is still nearly a third cheaper for a three bed semi than Galway city

It's all relative