Property Market 2020

Ush1

Assetbacked wrote: »

Capital Dock, the newly built apartment block was reported this week to have over a hundred vacant since they completed a year ago. Cheapest two bed is €3.5k. Kennedy Wilson own the block.

I understand the Opus apartments have been struggling to let in Grand Canal Dock. Again, presumably the extortionate rent would be the problem. There is a perception that there is a queue of corporate executives to take on short term luxury lets but I don't think it could be as high as the institutionals expected it to be. The pick up in hotel renovations and building wouldn't have helped in that regard as well.

If they are available to rent but expensive, it's not really the same as "vacant".

Assetbacked

Ush1 wrote: »

If they are available to rent but expensive, it's not really the same as "vacant".

Do you not realise that the pricing is a method to ensure they remain available but unaffordable for people in order to control the supply of rentals on the market and keep the rental crisis going (for them it's about ensuring enhanced yields are achieved)?

Kennedy Wilson kept North Bank vacant for nearly a year when they purchased it in 2016 and the development behind Heuston Station is being drip fed into the rental market the past three years.

Ush1

Assetbacked wrote: »

Do you not realise that the pricing is a method to ensure they remain available but unaffordable for people in order to control the supply of rentals on the market and keep the rental crisis going (for them it's about ensuring enhanced yields are achieved)?

Kennedy Wilson kept North Bank vacant for nearly a year when they purchased it in 2016 and the development behind Heuston Station is being drip fed into the rental market the past three years.

Whilst I'm not sure I agree with that, that's very different to Russian billionaires having a pied a terre in New York that they've never been in and have no intention of renting out.

car_radio19834

Assetbacked wrote: »

Do you not realise that the pricing is a method to ensure they remain available but unaffordable for people in order to control the supply of rentals on the market and keep the rental crisis going (for them it's about ensuring enhanced yields are achieved)?

Kennedy Wilson kept North Bank vacant for nearly a year when they purchased it in 2016 and the development behind Heuston Station is being drip fed into the rental market the past three years.

This is what I said a year or so ago about all these vulture funds.

If an individual has a property, he needs income so if he's not getting 1k a month, he'll have to drop the price.

But when these vulture funds have them, they'll happily keep the asking price at 1k a month until someone does pay it because they have the finance to take the month or so hit.

And the government love these arrangements because the vulture funds take all the risk from the banks as they don't need loans from Irish banks, and then they get income from the tax these funds pay.

Whereas if people were buying these houses, the risk of a downturn would be on the bank and there is no regular income from someone who owns the house. So the government have bent over for these funds.

Tazz T

This^

They do the exact same thing with commercial property. There are several retail units across the street from me that have never been rented out since they were built more than ten years ago because the rental is just too high. Two businesses that did rent there went under. The vulture funds are happy to do this and make their profit on capital increases. If it gets rented for a while it's a bonus.

And literally next door where a hundred apartments are currently being built most have already be sold to this crowd http://www.uliving.ie/ a front for Hibernia REIT. To make matter more cringeworthy, one of the partners is Felix McKenna - a former NAMM exec.

Guarantee that these much needed homes will be priced way above market rates around here (D15) and cause private landlords to increase their own rents. This is the biggest issue, these corporations play a big role in market pricing.

They should be taxed out of it.

AlmightyCushion

Tazz T wrote: »

This^

They do the exact same thing with commercial property. There are several retail units across the street from me that have never been rented out since they were built more than ten years ago because the rental is just too high. Two businesses that did rent there went under. The vulture funds are happy to do this and make their profit on capital increases. If it gets rented for a while it's a bonus.

And literally next door where a hundred apartments are currently being built most have already be sold to this crowd http://www.uliving.ie/ a front for Hibernia REIT. To make matter more cringeworthy, one of the partners is Felix McKenna - a former NAMM exec.

Guarantee that these much needed homes will be priced way above market rates around here (D15) and cause private landlords to increase their own rents. This is the biggest issue, these corporations play a big role in market pricing.

They should be taxed out of it.

Individuals do this too not just 'vulture funds'. It's happening with plenty of retail real estate in Sligo and it's not vulture funds that own them.

lastusername

Tazz T wrote: »

This^

They do the exact same thing with commercial property. There are several retail units across the street from me that have never been rented out since they were built more than ten years ago because the rental is just too high. Two businesses that did rent there went under. The vulture funds are happy to do this and make their profit on capital increases. If it gets rented for a while it's a bonus.

And literally next door where a hundred apartments are currently being built most have already be sold to this crowd http://www.uliving.ie/ a front for Hibernia REIT. To make matter more cringeworthy, one of the partners is Felix McKenna - a former NAMM exec.

Guarantee that these much needed homes will be priced way above market rates around here (D15) and cause private landlords to increase their own rents. This is the biggest issue, these corporations play a big role in market pricing.

They should be taxed out of it.

Guess this just shows FG care more about keeping the banks and vulture funds happy than actually getting properties on the market for the people who elected them (and those who didn't).

Assetbacked

lastusername wrote: »

Guess this just shows FG care more about keeping the banks and vulture funds happy than actually getting properties on the market for the people who elected them (and those who didn't).

All measures of FG have been to help faceless corporates over the individuals. The 4% RPZ rent increase restrictions did absolutely nothing to the institutionals; it just punished individual landlords who did not raise their rent for years and got punished for it. It also justified another 4% increase to rent each year for tenants.

Assetbacked

Ush1 wrote: »

Whilst I'm not sure I agree with that, that's very different to Russian billionaires having a pied a terre in New York that they've never been in and have no intention of renting out.

But that's comparing apples with oranges. Russian billionaires are trying to keep money away from authorities by using it to buy these properties or else are looking for a place to park their cash. The higher the value of these luxury lets, the more money they can lock up in these properties.

Mad_maxx

AlmightyCushion wrote: »

Individuals do this too not just 'vulture funds'. It's happening with plenty of retail real estate in Sligo and it's not vulture funds that own them.

This surprises me, commercial property has increased in value far less than residential in the majority of the country as there is not close to the same supply shortage.

Commercial property is bought for yield more than capital appreciation

nerrad01

i think whats being discussed shows how inept the FG housing policy is. ive no idea how anyone caught in the housing trap (which a lot of people are) could possibly vote for them. Major change needed

PommieBast

nerrad01 wrote: »

i think whats being discussed shows how inept the FG housing policy is. ive no idea how anyone caught in the housing trap (which a lot of people are) could possibly vote for them. Major change needed

The alternatives look like they want to double-down on many of the mistakes.

nerrad01

PommieBast wrote: »

The alternatives look like they want to double-down on many of the mistakes.

out of interest what would they be doubling down on? fair enough the targets are un-achievable but they are a step in the right direction. I highly doubt they would be doubling down on supporting institutional landlords

ittakestwo

Assetbacked wrote: »

Capital Dock, the newly built apartment block was reported this week to have over a hundred vacant since they completed a year ago. Cheapest two bed is €3.5k. Kennedy Wilson own the block.

I understand the Opus apartments have been struggling to let in Grand Canal Dock. Again, presumably the extortionate rent would be the problem. There is a perception that there is a queue of corporate executives to take on short term luxury lets but I don't think it could be as high as the institutionals expected it to be. The pick up in hotel renovations and building wouldn't have helped in that regard as well.

Could it be that they are a bit slow off the mark between buying them and getting them rented out.
A new housing estate near me was completed about 2 years ago. I believe they were all bought buy a pharma company and are all occupied now. But I do remember a period of possibly a year when they were finished and unoccupied for no apparent reason.

I doubt it's a longterm plan by the buyer's to leave them unoccupied. I guess this time next year those apartments in GCD will be occupied

Assetbacked

ittakestwo wrote: »

Could it be that they are a bit slow off the mark between buying them and getting them rented out.
A new housing estate near me was completed about 2 years ago. I believe they were all bought buy a pharma company and are all occupied now. But I do remember a period of possibly a year when they were finished and unoccupied for no apparent reason.

I doubt it's a longterm plan by the buyer's to leave them unoccupied. I guess this time next year those apartments in GCD will be occupied

If institutional investors did not buy up whole apartment blocks being built, these would be sold off to (most likely) people that are currently renting. This would decrease demand for rental properties.

Perhaps I am being cynical but when I see 1 beds being offered for rent at €2.5k and 2 beds for €3.5k+, I do not see many people taking up the leases as the salaries required are astronomical even by Facebook's and Google's salary standards.

ittakestwo

nerrad01 wrote: »

i think whats being discussed shows how inept the FG housing policy is. ive no idea how anyone caught in the housing trap (which a lot of people are) could possibly vote for them. Major change needed

But what is the solution and what can a government do. The housing problem resulted in the crash in housing during the recession. many builders hit the wall and people in trade emigrated. Economy then recovers very quickly thanks to being a tax heaven for multinational companies and creates a lot of jobs and demand for housing, but a dead construction industry and banking system does not build houses... let's just blame the current government for a problem we know manifested from the previous crash.



People in the trade will not want to come back here from Australia when they hear the government that caused them to leave are back in.

ittakestwo

Assetbacked wrote: »

If institutional investors did not buy up whole apartment blocks being built, these would be sold off to (most likely) people that are currently renting. This would decrease demand for rental properties.

Perhaps I am being cynical but when I see 1 beds being offered for rent at €2.5k and 2 beds for €3.5k+, I do not see many people taking up the leases as the salaries required are astronomical even by Facebook's and Google's salary standards.

It makes no difference to rent as long as all the apartments are rented out. If you sell these on the private market or let them all out it will make no difference to rent. Arguably letting them all out by institutional investors would bring down rent slightly more if anything.

PommieBast

nerrad01 wrote: »

out of interest what would they be doubling down on? fair enough the targets are un-achievable but they are a step in the right direction. I highly doubt they would be doubling down on supporting institutional landlords

Replacing the current rent controls with rent freezes springs to mind.



FG being cosy with institutional landlords is a problem, but I have yet to see any proposals from anyone that address why small-fry landlords such as my own are selling up in droves.

l5auim2pjnt8qx

Assetbacked wrote: »

If institutional investors did not buy up whole apartment blocks being built, these would be sold off to (most likely) people that are currently renting. This would decrease demand for rental properties.

Perhaps I am being cynical but when I see 1 beds being offered for rent at €2.5k and 2 beds for €3.5k+, I do not see many people taking up the leases as the salaries required are astronomical even by Facebook's and Google's salary standards.

I somewhat doubt many individuals are taking up these leases ,at least not 100%, I'm sure there employer play a big part on all or 50% per cent of the least, this could be claimed back through tax reliefs or possibly through loop holes.

Another head scratcher would be if they are twinned with another Corporate giant, they would be simply paying rent to themselves , and if there employees are paying 50% of the rental the employee is paying 50% of the rental to the company who is paying them.A Win Win situation for Multinationals & Corporate Investment Companies.

All in All this is showing Government & Central Banks lack of interest in 1st time Buyer's purchasing in Dublin for the forseeable future in leaving the 3.5 ×salary on table .

Cuddlesworth

Assetbacked wrote: »

Perhaps I am being cynical but when I see 1 beds being offered for rent at €2.5k and 2 beds for €3.5k+, I do not see many people taking up the leases as the salaries required are astronomical even by Facebook's and Google's salary standards.

1 bed = 2.5k

Couple, both earning circa 70k a year. Combined income circa 8k after tax. 31% post tax income, its doable.

Same for the 2 beds, take 2 high earners or a couple and high earner.

When you remove the cost of commuting and cars from your life, it's pretty affordable to a lot of people to be in a central location near work.

coolshannagh28

ittakestwo wrote: »

But what is the solution and what can a government do. The housing problem resulted in the crash in housing during the recession. many builders hit the wall and people in trade emigrated. Economy then recovers very quickly thanks to being a tax heaven for multinational companies and creates a lot of jobs and demand for housing, but a dead construction industry and banking system does not build houses... let's just blame the current government for a problem we know manifested from the previous crash.



People in the trade will not want to come back here from Australia when they hear the government that caused them to leave are back in.

FG and Michael Noonan created this problem when the went to the US after the crash seeking property investment on very favourable tax terms . Since that our corporate tax status has become a two edged sword ; on one side we gain from corporate tax and trickle down but on the other side big money has gained a monopolistic position in the housing and rental market and are squeezing every last cent out of it.
Incidentally the Troika encouraged the government to become less dependent on small landlords and this was an easy way to placate that demand.

Assetbacked

Cuddlesworth wrote: »

1 bed = 2.5k

Couple, both earning circa 70k a year. Combined income circa 8k after tax. 31% post tax income, its doable.

Same for the 2 beds, take 2 high earners or a couple and high earner.

When you remove the cost of commuting and cars from your life, it's pretty affordable to a lot of people to be in a central location near work.

So you need to he a couple or else be a high earner and not mind sharing with another high earner. I don't think a high earner wants a place to share with a housemate.

While it may be doable, it takes high earners and even at that it is right on the cusp of affordability.

ittakestwo

coolshannagh28 wrote: »

FG and Michael Noonan created this problem when the went to the US after the crash seeking property investment on very favourable tax terms . Since that our corporate tax status has become a two edged sword ; on one side we gain from corporate tax and trickle down but on the other side big money has gained a monopolistic position in the housing and rental market and are squeezing every last cent out of it.
Incidentally the Troika encouraged the government to become less dependent on small landlords and this was an easy way to placate that demand.

But if we had not got this investment there would have been even less built and therefore a bigger crisis over the last few years?

Take Hines building 2.5k homes in Cheerywood at the moment. If they only invested here because of a tax credit (which is probable) then it must be helping supply of houses. We actually want more foreign companies coming here to build. Banks here dont have money to lend developers which was the way up to 10 years ago. So we are going to need these foreign companies that have cash.

coolshannagh28

ittakestwo wrote: »

But if we had not got this investment there would have been even less built and therefore a bigger crisis over the last few years?

Take Hines building 2.5k homes in Cheerywood at the moment. If they only invested here because of a tax credit (which is probable) then it must be helping supply of houses. We actually want more foreign companies coming here to build. Banks here dont have money to lend developers which was the way up to 10 years ago. So we are going to need these foreign companies that have cash.

This is true , but allowing a few big funds a monopoly drives up prices and rents to the point of unaffordability and feeds into the homeless problem , there is a strong analogy between Dublin and San Francisco where the city becomes unaffordable to all except the rich .

ittakestwo

coolshannagh28 wrote: »

This is true , but allowing a few big funds a monopoly drives up prices and rents to the point of unaffordability and feeds into the homeless problem , there is a strong analogy between Dublin and San Francisco where the city becomes unaffordable to all except the rich .

But they have a monopoly at the moment because they're the only people in town who have the cash to build. If we discourage them the crises will get worse. They are making a fortune from rents but rents would even be higher if they were not here. Remember landlords are price takers not price makers.

Over the election campaign politicians have been giving out about them but in reality we need them and the housing crisis would be worse if they were not here. Very easy to criticize people who are making a fortune from a housing crises.

Bottom line is we need all the supply we can get, whether its built by foreign investment companies or not. Only supply will bring down rents and prices down when there is do much demand.

Assetbacked

The rent is too damn high — even for middle-income Americans: https://on.mktw.net/2OsgroT

Why low rates are raising questions about the next commercial real estate unwind: https://on.mktw.net/2t9hpPv

The American situation matching Ireland. Watch that space.

coolshannagh28

ittakestwo wrote: »

But they have a monopoly at the moment because they're the only people in town who have the cash to build. If we discourage them the crises will get worse. They are making a fortune from rents but rents would even be higher if they were not here. Remember landlords are price takers not price makers.

Over the election campaign politicians have been giving out about them but in reality we need them and the housing crisis would be worse if they were not here. Very easy to criticize people who are making a fortune from a housing crises.

Bottom line is we need all the supply we can get, whether its built by foreign investment companies or not. Only supply will bring down rents and prices down when there is do much demand.

Logical enough , there was and is a balancing act on the impact of imported big capital and now the Irish market is tied very closely to the outside and its hard to see how the rental market particularly in Dublin is sane and can remain balanced.

lastusername

How do you all see the market changing and evolving if we have a motley crew of Independents, SF, Greens and others in power for the coming years?

Cuddlesworth

Assetbacked wrote: »

So you need to he a couple or else be a high earner and not mind sharing with another high earner. I don't think a high earner wants a place to share with a housemate.

While it may be doable, it takes high earners and even at that it is right on the cusp of affordability.

There are plenty of people in the city who earn more than that. Especially workers in the tech firms you mentioned who want to live close by.

Your argument is that they are unaffordable for everybody, which they are not. They are affordable for a small subnet of the population and that's what they are aimed towards.

19233974

Cuddlesworth wrote: »

There are plenty of people in the city who earn more than that. Especially workers in the tech firms you mentioned who want to live close by.

Your argument is that they are unaffordable for everybody, which they are not. They are affordable for a small subnet of the population and that's what they are aimed towards.

the problem is that its not just city centre apartments aimed at high earning workers that are achieving these prices.

Even sh*thole 1 bed apartements are going for 1.5k per month plus, and you would be hard pushed to get a room in a shared house for less than €800 pm.

its kind of mind boggling that you can think that is sustainable and affordable. A salary over 50K puts you in the top 18% of earners. Its clear to see these rents are beyond afforable for the vast majority and at the limit of affordability for even the high earners.