RTE report- pace of rent inflation slowing- but landlords leaving sector

The_Conductor

https://www.rte.ie/news/2018/1213/1016879-rent_index/

Synopsis:

Pace of rent increases is slowing from an annual increase of 3.6% in Q2 to 1.9% in Q3- with the bulk of the increase focused on certain property types (notably apartments in Dublin, Cork and Galway).

Number of landlords and the overall number of verifiable tenancies- are both falling- with an absolute fall in the number of landlords of about 1,700- representing a little over 9,000 properties (which it appears were almost exclusively sold as PPRs to owner occupiers- rather than to other landlords).

Concentration in new properties is apartments- numbers of other property types in freefall.

The exodus of landlords from the sector seems to be further gathering pace.

The Student

The_Conductor wrote: »

https://www.rte.ie/news/2018/1213/1016879-rent_index/

Synopsis:

Pace of rent increases is slowing from an annual increase of 3.6% in Q2 to 1.9% in Q3- with the bulk of the increase focused on certain property types (notably apartments in Dublin, Cork and Galway).

Number of landlords and the overall number of verifiable tenancies- are both falling- with an absolute fall in the number of landlords of about 1,700- representing a little over 9,000 properties (which it appears were almost exclusively sold as PPRs to owner occupiers- rather than to other landlords).

Concentration in new properties is apartments- numbers of other property types in freefall.

The exodus of landlords from the sector seems to be further gathering pace.

And the exodus will continue until a more balanced approach to landlords and tenants is taken.

Assetbacked

Renting workers need respite; the last 6 years their pockets have been hit harder and harder. If we lost 50% of the gains the past 4 years in rent that would be a significant boost to the morale of those working. Hopefully we will now see a shift back in favour of renters the next few years.

zl1whqvjs75cdy

Assetbacked wrote: »

Renting workers need respite; the last 6 years their pockets have been hit harder and harder. If we lost 50% of the gains the past 4 years in rent that would be a significant boost to the morale of those working. Hopefully we will now see a shift back in favour of renters the next few years.

With less supply how do you figure thats going to happen. The government are now starting to reap what they sowed. There's a drive to remove the small time landlord from the market and replace them with large institutional investors. You can bet your last euro that these companies will never let the rent go below market value. All possible rent hikes will be passed on tenants from now on. More grim times in the city I think

Hack12

I'm an accidental landlord and also a renter. Honestly I can see why people are leaving the sector and personally I cannot wait not to be a landlord anymore. Between regulation and taxation it just simple isn't worth it.

There is also an issue that it's near impossible to get rid of bad tenants. It's the only business (and it is business whether you agree or not) where someone can rob you (not paying rent) and the State agrees this is ok until certain parameters are met.

People also need to realise that renting shouldn't be cheaper than buying as the landlord has to upkeep of the property to take into account.

As a tenant yes it is annoying rents going up, frustration over will I ever own a home again and all that goes with that but there is a bigger issue here and it's down to Government policy. The cost has sky rocketed as a landlord with income tax, PRSI, LPT (which is not tax deductable) etc. The only real winners of all of this has been the Revenue Commissioners.

runawaybishop

Assetbacked wrote: »

Renting workers need respite; the last 6 years their pockets have been hit harder and harder. If we lost 50% of the gains the past 4 years in rent that would be a significant boost to the morale of those working. Hopefully we will now see a shift back in favour of renters the next few years.

How do you see that happening. Previous government policy has only forced rents up. This one will do the same.

Claw Hammer

Assetbacked wrote: »

Renting workers need respite; the last 6 years their pockets have been hit harder and harder. If we lost 50% of the gains the past 4 years in rent that would be a significant boost to the morale of those working. Hopefully we will now see a shift back in favour of renters the next few years.

Renting workers need lower rent. More landlords offering more properties to rent would help that to come about. The carry-on that is now happening with a focus on rent freezes and rent registers is lunacy.

Moonjet

donkeyoaty0099 wrote: »

With less supply how do you figure thats going to happen. The government are now starting to reap what they sowed. There's a drive to remove the small time landlord from the market and replace them with large institutional investors. You can bet your last euro that these companies will never let the rent go below market value. All possible rent hikes will be passed on tenants from now on. More grim times in the city I think

Exactly, our new landlords are the likes of Hines (who have $116 billion of assets on their books) and who are building 1,269 apartments as part of the Cherrywood town centre development.



If a small Irish landlord with 1 or 2 properties gets a problem tenant, who stops paying rent for a few years it can cripple the landlord financially.



For the likes of Hines, it's just a trivial annoyance they pass on to their legal department to resolve.

Increased supply lowering rents doesn't work when most of the supply is controlled by a small group of international REITs, which is the direction we're heading.

the_syco

Assetbacked wrote: »

Hopefully we will now see a shift back in favour of renters the next few years.

Due to government policy, rents will only go up, and never down, because if a landlord is nice to a tenant (and doesn't raise the rent), he's shooting themselves in the foot as they can't up the rent to market levels should the nice tenant ever leave.

[Url=https://www.rte.ie/news/2018/1213/1016879-rent_index/]RTE Article[/url] wrote:

However, the Institute of Professional Auctioneers and Valuers (IPAV) said a report commissioned by the RTB in 2014 had predicted that rent controls would force landlords from the market and it had been entirely predictable that this would happen.

"That study said rent regulations would see the impact falling disproportionately hard on the very people they are intended to assist," said Pat Davitt, IPAV Chief Executive.

"In addition, the European Commission warned that rent controls have had a destabilising impact on housing markets in other EU countries."

"Yet we seem hell bent on further regulating the market."

The irony; the politicians who wanted to cap the rent are the cause for there being less places to rent.

Ray Palmer

They are also calling for TDs that are landlords to not be allowed vote in matters relating to housing now. Government policy has been particularly bad on landlords and somehow it is still felt the government have a vested interest for landlords. It is so weird that the public believe the exact opposite of what has happened.

No such calls for the the pub owners when the minimum pricing bill was being voted on and that is completely protectionary for them.

The Student

Assetbacked wrote: »

Renting workers need respite; the last 6 years their pockets have been hit harder and harder. If we lost 50% of the gains the past 4 years in rent that would be a significant boost to the morale of those working. Hopefully we will now see a shift back in favour of renters the next few years.

A simple fix is to extend the rent a room scheme to landlords. That way tenants rent decreases, a landlords income remains the same and the tenant can save a deposit for a house purchase.

You do understand that with the problem of evicting non paying tenants is the single biggest problem we have and the greatest power a tenant has with no recourse against them.

Lux23

I can understand that landlords may feel hard done by, but why invest in the sector if you're not prepared to provide a safe and secure home to someone? It's not just about making money; you do it because you might want to provide a service that benefits society as a whole. If you just want to make money, invest in something else.

The Student

Lux23 wrote: »

I can understand that landlords may feel hard done by, but why invest in the sector if you're not prepared to provide a safe and secure home to someone? It's not just about making money; you do it because you might want to provide a service that benefits society as a whole. If you just want to make money, invest in something else.

The longterm provision of a home is the State's responsibility. There is a demand for lets of a couple of years at a time which is exactly where the private landlord should be.

Currently property is providing the best returns assuming you don't get a rogue tenant.

With all of the Govt's meddling the sector is just to volatile. What other business is forced to continue providing a service knowing full well it will not be paid for?

10pennymixup

Lux23 wrote: »

I can understand that landlords may feel hard done by, but why invest in the sector if you're not prepared to provide a safe and secure home to someone? It's not just about making money; you do it because you might want to provide a service that benefits society as a whole. If you just want to make money, invest in something else.

That is exactly whats happening, LL's are getting out and investing elsewhere.

JimmyMW

Lux23 wrote: »

I can understand that landlords may feel hard done by, but why invest in the sector if you're not prepared to provide a safe and secure home to someone? It's not just about making money; you do it because you might want to provide a service that benefits society as a whole. If you just want to make money, invest in something else.

Total BS, Money is always the bottom line, in fact that where the phrase "the bottom line" comes from, money is always No1 with investments

The_Conductor

Lux23 wrote: »

I can understand that landlords may feel hard done by, but why invest in the sector if you're not prepared to provide a safe and secure home to someone? It's not just about making money; you do it because you might want to provide a service that benefits society as a whole. If you just want to make money, invest in something else.

Most landlords (with the exception of accidental landlords) are in it purely as a business. The current environment- is not conducive to running letting residential property- as a business- which is why so many are abandoning the sector.

Landlords are not in it for the good of society- they are in it to run a business- and when you try to argue that they have to want to provide a service that benefits society- you're misrepresenting the motivation behind operating in the sector.

It is a business- pure and simple. Once you move away from this business relationship- you end up mired in controversy- and in a situation where the absolute numbers of landlords and properties let in the sector- are falling.

Even allowing for all the new apartment complexes that are only available for renting- the absolute numbers of properties in the rental sector in Ireland- are falling. Surely this should be raising red flags? Instead- its not- for whatever reason- and the Minister is insistent on getting the boot in again.

It suits the politicians to view landlords as whipping boys- because any blame for politicians failure to fulfil *their* obligations- which are societal obligations- can be shoved onto someone who has no such societal obligations.

Private sector landlords should not be involved in social housing- the government and local authorities- alone- should be tasked with fulfilling any social housing obligations or needs in Irish society. Trying to privatise this obligation- because the government stopped building social housing units in the early 80s- and actually encouraged local authorities to sell off their housing stocks- has been shown to quite simply not work- yet- they continue to flog this dead horse.

We need a much greater social housing requirement- ideally delivered by the public sector- and the rules changed such that public sector residential property remains public sector rental property- in perpetuity. Selling council housing- is nuts- and must stop.

At the moment- the societal argument- that landlords owe society- rather than viewing the transaction as a business transaction- is at least in part- what is driving the current regulatory environment- and driving small scale landlords to abandon the sector. It is accelerating- yet all the Minister plans- are further onerous regulations that will simply further accelerate departures from the sector.

On the Brightside- it does mean there are secondhand properties hitting the market for those who wish to buy property and have access to funds. However- that doesn't help all those who are trying to find somewhere to live- just the small subsector who are in a position to buy...........

The current system is a mess. The proposals are to deepen the mess.

amcalester

Lux23 wrote: »

I can understand that landlords may feel hard done by, but why invest in the sector if you're not prepared to provide a safe and secure home to someone? It's not just about making money; you do it because you might want to provide a service that benefits society as a whole. If you just want to make money, invest in something else.

In a functioning market only the landlords who provide a safe and secure home would survive but we don’t have a functioning market. That’s the first issue.

Second issue is that if you want the private sector to provide an essential public service then the government needs to make it attractive to investors.

listermint

Ive yet to see a 'real' landlord on this forum indicate they are leaving the sector. By real i mean not accidental and more than 1 property.

I have seen many (you know who you are) complain and complain, but none seem to have left the sector and 'make investments elsewhere' and 'bottom line is bottom line'


Why is that.....

Moonjet

listermint wrote: »

Ive yet to see a 'real' landlord on this forum indicate they are leaving the sector. By real i mean not accidental and more than 1 property.

The stats are in the article OP posted:

Today there are 1,778 fewer landlords than there were three years ago

Just because they aren't posting on boards doesn't mean it's not happening.

10pennymixup

listermint wrote: »

Ive yet to see a 'real' landlord on this forum indicate they are leaving the sector. By real i mean not accidental and more than 1 property.

I have seen many (you know who you are) complain and complain, but none seem to have left the sector and 'make investments elsewhere' and 'bottom line is bottom line'


Why is that.....

I have.

2nd last one goes on the market next year.

Franz Von Peppercorn

donkeyoaty0099 wrote: »

With less supply how do you figure thats going to happen. The government are now starting to reap what they sowed. There's a drive to remove the small time landlord from the market and replace them with large institutional investors. You can bet your last euro that these companies will never let the rent go below market value. All possible rent hikes will be passed on tenants from now on. More grim times in the city I think

Ive rented below market from a large institutional landlord before.

Graces7

The Student wrote: »

The longterm provision of a home is the State's responsibility.

There is a demand for lets of a couple of years at a time which is exactly where the private landlord should be.

Currently property is providing the best returns assuming you don't get a rogue tenant.

With all of the Govt's meddling the sector is just to volatile. What other business is forced to continue providing a service knowing full well it will not be paid for?

could you expand on and qualify that please?

Gumbo

listermint wrote: »

Ive yet to see a 'real' landlord on this forum indicate they are leaving the sector. By real i mean not accidental and more than 1 property.

I have seen many (you know who you are) complain and complain, but none seem to have left the sector and 'make investments elsewhere' and 'bottom line is bottom line'


Why is that.....

Some real landlords may only have one property too......

The Student

Graces7 wrote: »

could you expand on and qualify that please?

The long term provision of a home for those who can't afford a home is the States responsibility.

The Student

listermint wrote: »

Ive yet to see a 'real' landlord on this forum indicate they are leaving the sector. By real i mean not accidental and more than 1 property.

I have seen many (you know who you are) complain and complain, but none seem to have left the sector and 'make investments elsewhere' and 'bottom line is bottom line'


Why is that.....

So the official figs released indicate a drop in both landlords and available properties. Are you suggesting that the drop is down solely to individual/accidental landlords.

If the return is so attractive why would anybody leave a sector with such good returns. Surely the time to get out would have been when the returns where not so good.

Perhaps landlords are leaving the market because of the anti landlord stance, the inability to evict non paying tenants, the risk involved does not reflect the reward if you are a small landlord and you get a rogue tenant.

Lux23

JimmyMW wrote: »

Total BS, Money is always the bottom line, in fact that where the phrase "the bottom line" comes from, money is always No1 with investments

Then why become a landlord? It must be more profitable than the poor-mouthers of A&P let on.

Lux23

amcalester wrote: »

In a functioning market only the landlords who provide a safe and secure home would survive but we don’t have a functioning market. That’s the first issue.

Second issue is that if you want the private sector to provide an essential public service then the government needs to make it attractive to investors.

I understand both of these things, I agree that the State shouldn't be relying on the private sector to provide housing to thousands of families, but there would be an awful lot of single property landlords out of pocket if the country suddenly started building homes for everyone that wanted to rent one.

noodler

I've had better experiences with large landlords tbh.

Ray Palmer

listermint wrote: »

I have seen many (you know who you are) complain and complain, but none seem to have left the sector and 'make investments elsewhere' and 'bottom line is bottom line'

I am selling one of my properties and said so before. Will sell another close to it too if it works out.

the_syco

Lux23 wrote: »

Then why become a landlord? It must be more profitable than the poor-mouthers of A&P let on.

It was. But now, due to increased regulations, and making it illegal not to accept those that receive HAP, means that landlords have to upgrade their houses but not make said money back.

runawaybishop

Lux23 wrote: »

Then why become a landlord? It must be more profitable than the poor-mouthers of A&P let on.

People aren't becoming landlords, that's the problem. Rents are massively increased and yet landlords aren't signing up in their thousands due to the overregulation in the market. Honestly, you'd want to be mental or a huge corp to become a landlord these days